Which of the Following Circumstances Most Likely Would Cause an Auditor

question 514

Multiple Choice

Which of the following circumstances most likely would cause an auditor to believe that material misstatements may exist in an entity's financial statements?

• A) Accounts receivable confirmation requests yield significantly fewer responses than expected.
• B) Audit trails of computer-generated transactions exist only for a short time.
• C) The chief financial officer does not sign the management representation letter until the date of the auditor's report.
• D) Management consults with other accountants about significant accounting matters.

---

Definitions:

Prognostics

The science of analyzing component and system life cycles and intervening to repair or replace components before they fail. Developed by the U.S. military, prognostic algorithms are now being applied to maintenance strategy in the trucking field.

Transmission Problem

Issues or malfunctions within the transmission system of a vehicle, affecting the transfer of power from the engine to the drive axle.

Variable Bleed

A feature in hydraulic or pneumatic systems allowing adjustable escape or release of fluid to control system pressure or response dynamically.

Proportioning Solenoids

Devices used in automotive braking systems to regulate the pressure between front and rear brakes, enhancing stability and control.