An Internal Auditor Notices That a Division Has Recorded Uncharacteristically

question 11

Multiple Choice

An internal auditor notices that a division has recorded uncharacteristically high sales and gross margins for the past three months and now suspects the division is reporting fictitious sales. Which course of action should the auditor follow to determine whether fraud has occurred?

• A) Trace a sample of shipping documents to related sales invoices to verify proper billing.
• B) Send accounts receivable balance confirmations to customers.
• C) Compare the division's sales and gross margins to those of the prior three-month period.
• D) Estimate the sales and cost of goods sold for the three-month period by using regression analysis.

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Definitions:

Gender Dysphoria

A condition where there is a psychological discomfort or dissatisfaction with the gender assigned at birth, leading to significant distress or impairment.

Gender Bias

The inclination or prejudice towards one gender over the other, often leading to unfair treatment or discrimination.

Transgender

An umbrella term for people whose gender identity or expression differs from the sex they were assigned at birth.

Identifies

Recognizes or establishes the identity of a person or thing.