Protection Transparency,Inc

question 77

Multiple Choice

Protection Transparency,Inc.is being audited by Messer and Bromely,LLP.During the assessment of fraud,Messer and Bromely discover that the controller has been creating fictional sales and posting them to the general ledger.Who should the auditors make aware of this issue?

• A)Protection Transparency's legal counsel.
• B)The federal law enforcement agency.
• C)The chairman of Protection Transparency's audit committee.
• D)The predecessor auditor of Protection Transparency.

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Definitions:

Inventory Turnover

A ratio that shows how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Cost Ratio

A measure comparing a company's costs (like production or operating costs) to another metric, often sales, to assess efficiency.

Year-End Balances

The final amounts in financial accounts at the conclusion of a fiscal year, used in financial reporting and analysis.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its equity and by using internally generated funds.