Below are some typical quality-related red flags. Indicate for each whether you would look at the balance sheet, income statement, neither, or both to detect the red flag.

A. An unusually long audit report or one that indicates a change in auditors B. An increase in Accounts Receivable not consistent with the past C. A one-time source of income D. An increase in borrowing E. A slowdown of the inventory turnover rate Balance Income Sheet Statement Both Neither