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:

Cross-Sectional

A research method that involves observations of all of a population, or a representative subset, at one specific point in time.

Education Levels

Education levels are the degrees or stages of formal learning that an individual has completed, ranging from elementary to secondary, and further to tertiary education.

Extended Length

An increase in duration or size beyond the usual or expected amount.

Down Syndrome

A genetic disorder caused by the presence of an extra 21st chromosome, characterized by physical growth delays and intellectual disabilities.