Which of the Following Factors Most Likely Would Heighten an Auditor's

question 51

Multiple Choice

Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting?

• A) Large amounts of liquid assets that are easily convertible into cash.
• B) Low growth and profitability as compared to other entity's in the same industry.
• C) Financial management's participation in the initial selection of accounting principles.
• D) An overly complex organizational structure involving unusual lines of authority.

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Definitions:

Blood pH

A measure of the acidity or alkalinity of blood, with a normal range of approximately 7.35 to 7.45, indicating a slightly alkaline state.

Temperature Changes

Variations in the degree of heat present in the environment or within a system.

Water Evaporation

The process by which water transforms from a liquid to a gas phase, often contributing to the Earth's hydrological cycle.

Nutrients

Substances obtained from food that are essential for growth, metabolism, and for the body to function properly.