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Sally Lauren Is the External Auditor for Modus Industries, a Public

Question 4

Multiple Choice

Sally Lauren is the external auditor for Modus Industries, a public company that manufactures disk drives. As she analyzes the numbers, she finds that the quick ratio, which has typically remained consistent, increased from 1.7 to 2.3 over the previous year. What type of financial statement fraud scheme could be occurring?


A) Inflated inventory
B) Omitted expenses
C) Fictitious accounts receivable
D) None of the above

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