In addition to changes in financial statements, which of the following can indicate financial statement fraud has occurred?
a. Information in the footnotes to the financial statements
b. Stable dividend payout ratio
c. Increased hiring of qualified employees by the company
d. Addition of an independent member on the board
a
FEEDBACK: a. Correct. Many times, the footnotes strongly hint that fraud is occurring, but what is contained in the footnotes is not clearly understood by auditors and others.
b. Incorrect.
c. Incorrect.
d. Incorrect.
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