Which of the Following Situations Would Heighten an Auditor's Concern

question 44

Multiple Choice

Which of the following situations would heighten an auditor's concern about the risk of fraudulent financial reporting

• A)Large amounts of liquid assets that are easily convertible into cash.
• B)Low growth and profitability as compared to other entity's in the same industry.
• C)Financial management's participation in the initial selection of accounting principles.
• D)An overly complex organizational structure involving unusual lines of authority.

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Definitions:

Wealth

A measure of the value of all the assets of worth owned by a person, community, company, or country.

Karl Marx

A 19th-century philosopher, economist, and revolutionary socialist who developed a critical analysis of capitalism and its societal impacts.

Competitive

Characterized by or involving rivalry among parties, where each party attempts to outperform others to achieve a particular objective.

Canadian Sociology

The study of social behavior, structures, and relationships within the context of Canadian society.