Question 1

Which of the following is most indicative of fraudulent activity?

A. Bank reconciliation has no outstanding checks or deposits older than 15 days.

B. Internal auditors locate several credit memos to support reductions of customers' balances all signed by one high level accounting manager.

C. Numerous cash refunds have been made to different people at different addresses around the country.

D. Three people were absent the day the auditors handed out the paychecks and have not picked them up four weeks later.

D is the correct answer. Please answer why D is correct.

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Question 2

Which of the following is most indicative of fraudulent activity?

A. Numerous cash refunds have been made to different people at different addresses.

B. Three people were absent the day the auditors handed out the paychecks and did not pick them up until the following Monday.

C. Internal auditors cannot locate several credit memos to support reductions of customers' balances.

D. Bank reconciliation has outstanding checks or deposits older than 1 year.

C is the correct answer. Please answer why C is correct.

Thanks.