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

question 8

Multiple Choice

Which of the following factors would most likely heighten an auditor's concern about the risk of fraudulent financial reporting?

• A) Inability to generate cash flows from operations while reporting substantial earnings growth.
• B) Management's lack of interest in increasing the entity's earnings trend.
• C) Large amounts of liquid assets that are easily converted into cash.
• D) Inability to borrow necessary capital without granting debt covenants.

---

Definitions:

Suicidal Thoughts

Thoughts about taking one's own life, often associated with depression or severe distress.

Depressive Symptoms

manifestations of depression that can include feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Depression

A mental health disorder characterized by persistent feelings of sadness, loss of interest, and a lack of enjoyment in life.

Disruptive Mood Dysregulation Disorder

A mental disorder characterized by severe and recurrent temper outbursts that are disproportionate to the situation and developmental level.