If earnings on financial statements for internal use only have been manipulated in the past, an internal auditor is likely to focus on which of the following?
A) The proper accrual of payables at the end of the interim period.
B) The timing of revenue recognition and the valuation of inventories.
C) Whether accounting estimates are reasonable given past actual results.
D) Whether there have been changes in accounting principles that materially affect the financial statements.

Question

Quizplus · Accepted Answer

The timing of revenue recognition and the valuation of inventories are common areas where earnings manipulation can occur, so an internal auditor would likely focus on these areas to detect any past manipulations.

If Earnings on Financial Statements for Internal Use Only Have