An Entity's Financial Statements Were Misstated Over a Period of Years

question 13

Multiple Choice

An entity's financial statements were misstated over a period of years due to large amounts of revenue being recorded in journal entries that involved debits and credits to an illogical combination of accounts. The auditor could most likely have been alerted to this fraud by:

• A)scanning the general journal for unusual entries.
• B)performing a revenue cutoff test at year-end.
• C)tracing a sample of journal entries to the general ledger.
• D)examining documentary evidence of sales returns and allowances recorded after year-end.