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:

Conflict Theory

A sociological perspective emphasizing societal inequalities and power differentials, suggesting that social order is maintained through domination and conflict.

Thomas Hobbes

A 17th-century English philosopher known for his work in political philosophy, especially his book "Leviathan," where he discusses the structure of society and legitimate government.

Humans

Homo sapiens, the species of bipedal primates characterized by a large brain, capable of complex reasoning, language, social interaction, and tool use.

Society

A group of individuals involved in persistent social interaction, or a large social group sharing the same geographical or social territory, typically subject to the same political authority and dominant cultural expectations.