Which of the Following Is a Red Flag of Fraud

question 5

Multiple Choice

Which of the following is a red flag of fraud?

• A)High turnover of key employees
• B)High inventory turnover rate
• C)High current ratios
• D)High quick ratios

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Definitions:

Economic Entity

A unit in the economy that is capable of control over resources, incurring liabilities, and engaging in business activities.

Combined Financial Statements

Financial statements that present the assets, liabilities, and operating results of two or more affiliated companies as if they were a single economic entity.

Consolidated Financial Statements

Combined financial statements of a parent company and its subsidiaries, presenting the financial position and results of operations as one entity.

Consolidated Financial Statements

Financial statements that aggregate the financials of a parent company with those of its subsidiaries.