Please list a few potential problems based on the following financial statements, and explain why. Thank you

21.) List three potential problems on the financial statements that an auditor should inquire further about. Do not simply list three accounts; provide a one-sentence explanation of why you suspect error or earnings management (20 points). 2019 2018 2017 REVENUE AND EXPENSE: Sales (net) 3,580,000 3,611,000 3,589,000 Cost of goods sold (1,790,000) (2,347,150) (2,332,850) Gross margin 1,790,000 1,263,850 1,256,150 General expense (175,000) (164,000) (166,000) Depreciation (770,000) (450,000) (450,000) Operating income 845,000 649,850 640,150 Interest expense (322,000) (302,000) (300,400) Income taxes (40%) (209,200) (139,140) (135,900) Net income 313,800 208,710 203,850 ASSETS: Cash 338,000 291,000 302,400 Accounts receivable 625,000 517,000 504,000 Allowance doubtful (6,250) (10,340) accounts (10,080) Inventory 418,000 355,000 361,000 Total current assets 1,069,780 1,152,660 1,157,320Fixed assets Accum. depreciation Total assets LIABILITIES AND EQUITY: Accounts payable Bank loans, 8% Accrued interest Total current liabilities Long-term debt, 10% Total liabilities Capital stock Retained earnings Total liabilities and equity 7,283,480 (2,5 80,000) 5,773,260 124,000 525,000 17,600 666,600 2,600,000 3,266,600 1,317,950 1,188,710 5,773,260 6,455,000 (2,130,000) 5,477,660 13 1,000 52 5,000 15,000 671,000 2,600,000 3,271,000 917,950 1,288,710 5,477,660 =\"-During FY2019, Balmer paid $100,000 in cash dividends. =\"-Balmer bought back stock totaling $704,970 in 2018 and issued stock totaling $400,000 in 2019 *- Debt was outstanding for entire year. 6,45 5,000 (1,680,000) 5,932,320 109 ,000 505 ,000 15,400 629,400 2,600,000 3,229,400 1,622,920 1,080,000 5,932,320