Reference no: EM132795951

Problem 1: Which of the following circumstances most likely would cause an auditor to suspect that there are material misstatements in an entity's financial statements?

Option a. The entity's management places no emphasis on meeting publicized earnings projections.
Option b. Significant differences between the physical inventory count and the accounting records are not investigated.
Option c. Cash transactions are electronically processed and recorded, leaving no paper audit trail.
Option d. Monthly bank reconciliations ordinarily include several large outstanding checks.