Which of the following is least likely to warrant further investigation of a potential client company?
A) Several companies in the same industry are experiencing business failures.
B) None of the audit committee members is a financial expert.
C) The audit committee concurs with management's selection of accounting treatments.
D) One of the directors was convicted of tax evasion.

Question

Quizplus · Accepted Answer

The audit committee agreeing with management's accounting treatments is a positive sign and therefore does not warrant further investigation. A, B, and D are all potential red flags that should be explored further before doing business with the company.

Which of the Following Is Least Likely to Warrant Further