While Conducting an Audit, an Internal Auditor Notices an Unusual

question 91

Multiple Choice

While conducting an audit, an internal auditor notices an unusual increase in sales among a small number of units within the organization. The units also experienced persistent negative cash flows despite reported earnings and earnings growth. Which type of fraud do the auditor's findings most likely indicate?

• A) Employee collusion with customer organizations.
• B) Improper asset valuation.
• C) Inventory theft.
• D) Fictitious revenues.

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Definitions:

Communication

The process of conveying information and meaning between or among individuals through verbal, non-verbal, written, or visual channels.

Technology

The application of scientific knowledge for practical purposes, especially in industry, through the design and use of machines, computers, and other electronic devices.

Principled Behavior

Actions guided by a set of moral values, showing consistency and integrity in ethical decision making.

Domain-Specific

Relating to a specific area of activity, interest, or knowledge, rather than being general or widespread.