Which of the Following Best Represents Actions That May Indicate

question 58

Multiple Choice

Which of the following best represents actions that may indicate fraud is pervasive throughout the company under audit?

• A)The company's management negotiates deals with vendors in such a manner as to pay lower prices.
• B)The company's management drives luxury vehicles and takes vacations to exotic places.
• C)The company's management takes an overly aggressive approach to revenue recognition.
• D)The company's management estimates bad debts using an aged accounts receivables ledger rather than as a percent of sales.

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Definitions:

Price Expectation

Anticipations about future prices that can influence the current decisions of consumers and producers.

Surplus

A market condition where the quantity supplied exceeds the quantity demanded at a given price, often leading to downward pressure on prices.

Shortage

A market condition where the demand for a product exceeds its supply at a particular price.

Supply Of Ethanol

The total amount of ethanol available for purchase or consumption in the market.