Fraud Related to Revenue Recognition Will Most Likely Be Identified

question 94

Multiple Choice

Fraud related to revenue recognition will most likely be identified by the auditor through which of the following independent situations?

• A) Sales have increased 5% in the current period over the previous period and is consistent with the results of competitors.
• B) Gross margin is equivalent in the current period to previous periods and is below that of the industry.
• C) Sales are higher in the month preceding each quarter end.
• D) The sales of a revolutionary new product are increasing beyond that of the competition in the periods immediately following its introduction.

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Definitions:

Writer

An individual who expresses thoughts, stories, or information through the act of writing.

Solicited Proposal

A proposal requested by an organization or individual, often in response to a specific problem or need.

Explicit Invitation

A direct and clear request or call to someone to participate in a specific event or action, leaving no room for ambiguity or misunderstanding.

Government Agency

A government agency is an organization within a government that is responsible for enforcing laws, regulations, and implementing public policy.