Red Flags That Auditors Can Use to Alert Them to the Possibility

question 31

Multiple Choice

Red flags that auditors can use to alert them to the possibility that a fraud may have occurred include:

• A)A high turnover of key employees.
• B)Strong internal controls.
• C)Routine transactions.
• D)Effective internal auditing staff.

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Definitions:

Subscriptions Receivable

Amounts owed to a company for goods or services that have been subscribed to but not yet paid for by customers.

Current Liability

Financial obligations or debts of a company due within a year, including accounts payable, taxes owed, and short-term loans.

Sales Tax

A tax levied by the government on the sale of goods and services.

Current Maturities

The portion of a long-term debt that is due to be paid within the next year.