Which of the Following Best Represents Actions That May Indicate

question 14

Multiple Choice

Which of the following best represents actions that may indicate fraud is pervasive throughout the company under audit?

• A)The company's management negotiates deals with vendors in such a manner as to pay lower prices.
• B)The company's management drives luxury vehicles and takes personal vacations to exotic places.
• C)The company's management takes an overly aggressive approach to revenue recognition.
• D)The company's management estimates bad debts using an aged accounts receivables ledger rather than as a percent of sales.

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Definitions:

Capacity Planning

The process of determining the production capacity needed by an organization to meet changing demands for its products.

Capacity Increment

The addition or increase in a system's or facility's ability to produce goods or services.

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance premiums.

Drum

In production and project management, often refers to the constraint or bottleneck resource that dictates the pace at which a process can run.