A receivables lapping scheme has occurred.

Reference no: EM13678924

An auditor has been performing ratio analysis to analyze a client's financial statements. The accounts receivable turnover ratio (sales /average receivables) for the current year is 2.5; while in previous years the ratio has been 4. What could this indicate?
A receivables lapping scheme has occurred.
A fictitious credit sales scheme has occurred.
An inventory fraud scheme has occurred.
The company merely tightened its credit approval process.

Reference no: EM13678924

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