Which of the Following Is Most Likely an Indicator of Fraud

question 19

Multiple Choice

Which of the following is most likely an indicator of fraud involving inventory overstatement?

• A) A sudden increase in the inventory turnover ratio
• B) A sharp decrease in gross profit margin
• C) A sudden decrease in sales
• D) A sudden increase in number of days' sales in inventory

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Definitions:

Brand Loyalty

Brand loyalty is the tendency of consumers to continuously purchase the same brand's products or services over competitors due to favorable experiences or perceptions.

Consistent Purchase

The behavior of consumers repeatedly buying the same brand or product over time.

Learned Predisposition

An acquired tendency or inclination towards certain behaviors, choices, or attitudes as a result of past experiences or influences.

Attitude

A mental inclination shown through the assessment of a specific entity with a level of preference or aversion.