There has been an auditor change at Company X. Which of the following situations may NOT signal a potential fraud problem?
a. Failure to pay an audit fee
b. Auditee believing that the auditor's fees are too high
c. Suspected fraud or other problems by the auditor
d. Auditor-auditee disagreement
b
FEEDBACK: a. Incorrect. Failure to pay is a signal that fraud may be present. It doesn't indicate that fraud is occurring but might be a signal or red flag that should not be overlooked.
b. Correct.
c. Incorrect. An auditor's suspicion of fraud is a signal that fraud may be present. It doesn't indicate that fraud is occurring but might be a signal or red flag that should not be overlooked.
d. Incorrect. Dispute over accounting issues is a signal that fraud may be present. They don't indicate that fraud is occurring but might be signals or red flags that should not be overlooked.
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