Which of the Following Signals a Potential Fraud That May

question 49

Multiple Choice

Which of the following signals a potential fraud that may occur for the overstatement of inventory accounts?

• A) Reserves for contingencies are reducing rapidly.
• B) Inventory amounts are growing faster than sales.
• C) Repairs and maintenance accounts have significant credit entries.
• D) The purchase of manufacturing equipment is occurring at a rapid rate.

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Definitions:

Feelings Of Inadequacy

Emotional states reflecting a lack of confidence or belief in one's own abilities or worth.

Infantile Thoughts

Primitive or early-stage cognitive processes often associated with or characteristic of infancy and early childhood.

Unconsciously

Without conscious awareness, done automatically or without intentional control.

Behaviors

Actions or reactions of an organism, often in response to its environment, which can be observed and measured.