An auditor might suspect that the auditee is in financial difficulty if:
A)The auditee offers more generous customer credit terms.
B)The auditee takes a large bank loan at market rates.
C)Sales increase and inventory increases.
D)Purchases increase and payables increase.

Question

Quizplus · Accepted Answer

Offering more generous customer credit terms can be a sign that the auditee is trying to boost sales quickly to improve cash flow, which may indicate financial difficulty.

An Auditor Might Suspect That the Auditee Is in Financial