Which of the Following Is Not an Indicator of Fraud

question 95

Multiple Choice

Which of the following is not an indicator of fraud in the acquisition and payment cycle?

• A)Theft of inventory by employees.
• B)Inventory shrinkage.
• C)Large manual adjustments to inventory accounts.
• D)Excess inventory because of a production slowdown.

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Definitions:

Painting Department

A specific section within a manufacturing or production facility responsible for the application of paint or coatings to products as part of the finishing process.

Single Plantwide Overhead Rate

A method for allocating all manufacturing overhead expenses to products based on a single cost driver.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or providing a service.

Single Plantwide Factory Overhead Rate

A method of allocating factory overhead to products based on a single, consistent rate applicable throughout the entire manufacturing plant.