Which of the Following Circumstances Most Likely Would Cause an Auditor

question 807

Multiple Choice

Which of the following circumstances most likely would cause an auditor to suspect that there are material misstatements in an entity's financial statements?

• A) Senior financial management participates in the selection of accounting principles and the determination of significant estimates.
• B) Supporting accounting records and files that should be readily available are not produced promptly when requested.
• C) Related party transactions take place in the ordinary course of business with an entity that is audited by another CPA firm.
• D) Senior management has an excessive interest in upgrading the entity's information technology capabilities.

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Definitions:

Smiling Face

A facial expression featuring an upward curving of the mouth, often signaling happiness or friendliness.

False Consensus

A general tendency to assume that other people share our own attitudes, opinions, and preferences.

Candidate's Platform

A formal set of principal goals which are supported by a political candidate or party, in order to appeal to the general public for the purpose of having said peoples’ support in votes.

Shocked

A sudden, intense surprise or disturbance of the mind or emotions, often caused by an unexpected event.