In Your Review of ABC Company's Financials,you Note That Receivables

question 31

Multiple Choice

In your review of ABC Company's financials,you note that Receivables have increased approximately 200% from the previous year,while Cash has declined.Further investigation reveals that 70% of ABC's receivables were booked within 7 days of the end of the quarter.If financial statement fraud is involved,which type is most likely?

• A)Fictitious revenues.
• B)Timing differences.
• C)Improper asset valuations.
• D)Improper disclosures.

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Definitions:

Reserve Requirement

The minimum amount of reserves that banks must hold, either in their vaults or on deposit with a central bank, as a regulatory measure intended to ensure bank liquidity.

Open Market Operations

The actions of central banks in purchasing and selling government securities with the aim of regulating the money supply and managing interest rates.

Comptroller of the Currency

This is a government official responsible for overseeing the federal banking system and ensuring the stability and compliance of national banks.

Lender of Last Resort

A lender of last resort is an institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky.