Below are some typical quality-related red flags. Indicate for each whether you would look at the balance sheet, income statement, neither, or both to detect the red flag.

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A. An unusually long audit report or one that indicates a change in auditors B. An increase in Accounts Receivable not consistent with the past C. A one-time source of income D. An increase in borrowing E. A slowdown of the inventory turnover rate Balance Income Sheet Statement Both Neither