While Performing an Audit of the Financial Statements of a Company

question 58

Multiple Choice

While performing an audit of the financial statements of a company for the year ended December 31, year 1, the auditor notes that the company's sales increased substantially in December, year 1, with a corresponding decrease in January, year 2. In assessing the risk of fraudulent financial reporting or misappropriation of assets, what should be the auditor's initial indication about the potential for fraud in sales revenue?

• A)There is a broad indication of misappropriation of assets.
• B)There is an indication of theft of the entity's assets.
• C)There is an indication of embezzling receipts.
• D)There is a broad indication of financial reporting fraud.

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Definitions:

Employer Liability

The legal responsibility of employers for the actions of their employees and the conditions at their workplace, especially regarding accidents or misconduct.

Job Application Forms

Documents used by employers for candidates to provide their background, experience, and skills as part of the hiring process.

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