Which of the Following Circumstances Would an Auditor Most Likely

question 45

Multiple Choice

Which of the following circumstances would an auditor most likely consider a risk factor relating to misstatements arising from fraudulent financial reporting?

• A) Several members of management have recently purchased additional shares of the entity's stock.
• B) Several members of the board of directors have recently sold shares of the entity's stock.
• C) The entity distributes financial forecasts to financial analysts that predict conservative operating results.
• D) Management is interested in maintaining the entity's earnings trend by using aggressive accounting practices.

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