Which of the Following Is a Major Factor in Management's

question 23

Multiple Choice

Which of the following is a major factor in management's ability to overvalue inventory without rapid detection by auditors?

• A)The limited volume of transactions in the inventory accounts.
• B)The auditor's assessment of inventory as a low-risk area.
• C)Complexity in the valuation of inventory.
• D)Consideration by the auditor of non-financial indicators of inventory fraud.

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Definitions:

Shareholders' Election

The process by which the shareholders of a corporation vote to choose members of the board of directors or make decisions on other important matters.

Manipulate

To control or influence something or someone in a deceitful or unethical way.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something, or the effect itself.

Venture Capital

Financing provided to new business ventures by professional, outside investors—that is, venture capitalists, usually groups of wealthy investors and securities firms.