Red Flags of Financial Statement Fraud Include All but Which

question 19

Multiple Choice

Red flags of financial statement fraud include all but which of the following

• A) Companies with unrealistically large growth in assets, revenues or profits
• B) Companies with a principal who has been involved in a bankruptcy
• C) Companies whose success depends on a special tax loophole or tax avoidance scheme
• D) Companies that report contingent liabilities that are reasonably possible and have the potential to create a loss for the company

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Definitions:

Oily Substance

Any material with a greasy or slippery consistency, often produced by the sebaceous glands of the skin.

Tears

A secretion from the lacrimal glands used to lubricate the eyes, cleanse them from irritants, and provide antibacterial protection.

Optic Nerve

A paired nerve that transmits visual information from the retina to the brain.

Blind Spot

The point in the visual field that corresponds to the lack of light-detecting photoreceptor cells on the optic disc of the retina where the optic nerve passes through.