Which of the Following Characteristics Most Likely Would Heighten an Auditor's

question 28

Multiple Choice

Which of the following characteristics most likely would heighten an auditor's concern about the risk of intentional manipulation of financial statements?

• A)Turnover of senior accounting personnel is low.
• B)Insiders recently purchased additional shares of the entity's stock.
• C)Management places substantial emphasis on meeting earnings projections.
• D)The rate of change in the entity's industry is slow.

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Definitions:

European Nations

Countries located in the continent of Europe, each with its distinct government, culture, and history.

U.S.

Short for the United States, a country in North America known for its significant global influence in economic, political, and cultural fields.

Formal Controls

Structured systems of rules and regulations designed to guide behavior within societies or organizations, often enforced by legal or official means.

Minor Rule Violations

Infractions or breaches of rules that are considered to be of relatively low severity or impact.