Which of the following factors would be most likely to heighten an auditor's concern about the risk of fraudulent financial reporting? 10 33 Which of the following is a management assertion regarding account balances at the period end? A. Large amounts of liquid assets that are easily convertible into cash. Transactions and events that have been recorded have occurred and pertain to the entity. Transactions and events have been recorded in the proper accounts The entity holds or controls the rights to assets, and liabilities are obligations of the entity Amounts and other data related to transactions and events have been recorded appropriately B. Low growth and profitability as compared C. Finanial management's participation in the D. A. to other entities in the same industry B. initial selection of accounting principles. An overly complex organizational structure involving unusual lines of authority. C. D. 3 Which of the following factors would most likely influence an auditor's determination of the auditability of an entity's financial statements? Which of the following statements is correct regarding accounting estimates? 3 A. The complexity of the accounting system. B. The existence of related party transactions. C. The adequacy of the accounting records D. The operating effectiveness of control A. The auditor's objective is to evaluate whether accounting estimates are reasonable in the circumstances Accounting estimates should be used when data concerning past events can be accumulated in a timely, cost-effective manner An important accounting estimate is management's listing of accounts receivable greater than 90 days past due. procedures. B. 2 Which of the following management assertions is an auditor most likely testing if the audit objective states that all inventory on hand is reflected in the ending inventory balance? C. A. The entity has rights to the inventory B. Inventory is properly valued. C. Inventory is valid and exists. D. Inventory is complete