Which One of the Following Discoveries by the Auditor Would

question 48

Multiple Choice

Which one of the following discoveries by the auditor would NOT raise the red flag of increased inherent risk?

• A) Review of the results of the previous year's audit shows there were significant misstatements in accounts payable.
• B) This is the fourth consecutive year that the firm has audited this client.
• C) The client is an electronics manufacturer that is holding extensive inventory.
• D) Client is a parent company with a subsidiary.

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Definitions:

Apple

A technology company known for creating products such as iPhones, Mac computers, iPads, and software.

Windows File Explorer

A graphical file management utility included with the Microsoft Windows operating system, allowing users to manage files, folders, and network connections.

View

A particular way of considering or regarding something; in computing, it often refers to a specific presentation of information, often in a database context.

File Path

The exact location of a file, starting with the drive in which the file is located and including all folders, subfolders (if any), the file name, and the extension (e.g., C:\Users\username\Documents\Illustrations\EBronte.jpg).