Which of the Following Pieces of Information Discovered by an Auditor

question 35

Multiple Choice

Which of the following pieces of information discovered by an auditor when performing substantive tests of account balances would most likely raise red flags about the possible existence of material fraudulent financial reporting?

• A)Paper copies of paid invoices and cancelled checks are microfiched and then destroyed.
• B)The controller requires that you schedule any audit inquiries for after lunch each day,not in the morning.
• C)The petty cash fund custodian never takes a vacation.
• D)The client's estimate of the allowance for doubtful accounts is lower than the auditor's independent evaluation of the allowance.

---

Definitions:

T-statistic

A type of statistic used to estimate the population parameter based on a sample statistic.

Sample Means

The average values obtained from multiple small groups (samples) taken from a larger population, used in statistical analyses.

Standard Deviations

A measure of the amount of variation or dispersion of a set of values.

Groups

Groups refer to sets of subjects or items that are categorized together based on specific characteristics or treatments in an experiment or study.