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b. An auditor discovers that a client’s accounts receivable turnover is substantially lower for the current...

b. An auditor discovers that a client’s accounts receivable turnover is substantially lower for the current year than for the prior year. This trend may indicate that (1) the client recently tightened its credit-granting policies. (2) employees have stolen inventory just before year-end. (3) fictitious credit sales have been recorded during the year. (4) an employee has been lapping receivables in both years.

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