An auditor is concerned about the risk of inadequate disclosure or incorrect presentation of financial information, including fraudulent financial reporting. Which of the following is an example of this type of risk?

A.

A manager authorizes payments for his personal home renovations as business expenses.

B.

A company overstates its cash balance to cover up theft or losses.

C.

A company's bank account's blank cheques are stolen, and signatures are forged to steal funds.

D.

An employee receives an accounts receivable payment in cash (rather than by cheque) and proceeds to steal it rather than record it.

Answer rating: 100% (QA)

Answer B A company overstates its cash balance to cover ... View the full answer