While reviewing the company's financial records at year-end John notices two interesting facts, 1) the trial balance does not balance, 2) more entries were made in the first half of the year than the last. Which are large red flags of fraud?
A) 1
B) 2
C) 1 and 2
D) Neither

Question

Quizplus · Accepted Answer

A: Correct. This is certainly a red flag.
B: Incorrect. This could be explained by a number of factors, such as seasonality of an industry.

While Reviewing the Company's Financial Records at Year-End John Notices