Which of the following factors most likely would heighten an auditor's concern about the risk of fraudulent financial reporting?
A) Large amounts of liquid assets that are easily convertible into cash.
B) Low growth and profitability as compared to other entity's in the same industry.
C) Financial management's participation in the initial selection of accounting principles.
D) An overly complex organizational structure involving unusual lines of authority.

Question

Quizplus · Accepted Answer

An overly complex organizational structure with unusual lines of authority can indicate attempts to conceal fraudulent activities, making it a significant concern for auditors.

Which of the Following Factors Most Likely Would Heighten an Auditor's