A key indicator of fraud in the revenue cycle is the auditor's detection of which of the following?
A)Customer collections that are over 90 days past due.
B)Credit entries in customer accounts receivable for authorized write-offs.
C)Recurring entries in the sales journal.
D)Altered shipping documents and invoices.

Question

Quizplus · Accepted Answer

Altered shipping documents and invoices are a key indicator of fraud in the revenue cycle as they can be used to hide the diversion of goods or cash. Option A is a red flag for slow-paying customers but not necessarily fraud. Option B relates to authorized write-offs, which are not necessarily suspicious. Option C is a common feature in most companies and does not necessarily indicate fraud.

A Key Indicator of Fraud in the Revenue Cycle Is