Which of the following is a true statement regarding searching for inventory analytical symptoms?
A) Examining the changes in recorded amounts from period to period provides useful information regarding potential fraud.
B) Studying the statement of cash flows is not a useful means of looking for potential fraud.
C) Utilizing vertical analysis for the current year is a useful means of identifying potential fraud.
D) The pace of the change in the numbers can often be indicative of potential fraud.

Question

Quizplus · Accepted Answer

The pace of the change in the numbers can often be indicative of potential fraud. This means that quick and significant changes in inventory levels can be a red flag for potential fraudulent activity. The other statements are incorrect. Examining changes in recorded amounts from period to period is useful, studying the statement of cash flows can also provide useful information, and utilizing vertical analysis for the current year may not necessarily identify potential fraud.

Which of the Following Is a True Statement Regarding Searching