Fraud Related to Revenue Recognition Will Most Likely Be Identified

question 108

Multiple Choice

Fraud related to revenue recognition will most likely be identified by the auditor through which of the following independent situations?

• A)Sales have increased 5% in the current period over the previous period and is consistent with the results of competitors.
• B)Gross margin is equivalent in the current period to previous periods and is below that of the industry.
• C)Sales are higher in the month preceding each quarter end.
• D)Sales of a revolutionary new product are increasing beyond that of the competition in the periods immediately following its introduction.

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Definitions:

Root Cap

A protective tissue at the tip of a plant root that helps the root penetrate the soil.

Pericycle

A cylinder of parenchyma or sclerenchyma cells just inside the endodermis of roots, which can give rise to lateral roots, and in some cases, contribute to secondary growth.

Branch Roots

Secondary or lateral roots that originate from the primary root, increasing the root system's overall surface area for water and nutrient absorption.

Root Hairs

Thin, hair-like extensions of root epidermal cells that increase surface area for water and nutrient absorption from the soil.