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:

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded in a market, leading to a stable market condition.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price level in a specified period.

Quantity Supplied

The level of a commodity or service that manufacturers are eager and capable of providing for purchase at a determined price over an established period.

Rollerblades

Inline skates used for recreation or sport, featuring a single line of wheels attached to the bottom of a boot.