Multiple Choice
Which of the following signals a potential fraud that may cause the overstatement of inventory accounts?
A) Reserves for contingencies are reducing rapidly.
B) Inventory amounts are growing faster than sales.
C) Repairs and maintenance accounts have significant credit entries.
D) The purchase of manufacturing equipment is occurring at a rapid rate.
Correct Answer:

Verified
Correct Answer:
Verified
Q12: A walkthrough is typically not a useful
Q13: Standard cost systems When auditing a manufacturing
Q14: Testing cash disbursements subsequent to the year
Q15: Acquisition and payment processes What are the
Q16: Analytical review of related expense accounts when
Q18: Which of the following is not a
Q19: Management may intentionally misstate inventory balances by
Q20: Test counts are performed by the auditor
Q21: Sources of information regarding a client's inventory
Q22: The auditor may test a manufacturing client's