Which of the Following Circumstances Would an Auditor Most Likely

question 45

Multiple Choice

Which of the following circumstances would an auditor most likely consider a risk factor relating to misstatements arising from fraudulent financial reporting?

• A) Several members of management have recently purchased additional shares of the entity's stock.
• B) Several members of the board of directors have recently sold shares of the entity's stock.
• C) The entity distributes financial forecasts to financial analysts that predict conservative operating results.
• D) Management is interested in maintaining the entity's earnings trend by using aggressive accounting practices.

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Definitions:

Double Ghetto

A term referring to the dual burden faced by women who perform unpaid domestic labor at home in addition to their paid employment, highlighting a form of gender inequality.

Housework

Refers to domestic chores and tasks performed within the home, such as cleaning, cooking, and maintenance, traditionally undervalued and disproportionately assigned to women.

Factory

A building or complex where materials are manufactured or processed into finished products using machinery.

Wealthy And Middle-Class

Descriptive terms for economic groups within society, with the wealthy having significant financial resources and the middle-class positioned economically between the wealthy and the poor.