Which of the Following Might Alert an Internal Auditor to the Possibility

question 404

Multiple Choice

Which of the following might alert an internal auditor to the possibility of fraud in a division? 1. The division is not scheduled for an external audit this year. 2. Sales have increased by 10 percent. 3. A significant portion of management's compensation is directly tied to reported net income of the division.

• A) 1 only
• B) 3 only
• C) 1 and 2 only
• D) 1, 2, and 3

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Definitions:

Treatment Center

A facility that provides medical, therapeutic, and rehabilitation services to individuals with health issues, such as substance abuse or mental health conditions.

Workers' Compensation

A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment.

Premises Rule

A legal principle governing liability and responsibility within the boundaries of a property.

Back Injury

A physical harm or damage to the back, which may include muscles, bones, or nerves of the back.