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Before accepting an audit engagement, a CPA should evaluate whether conditions exist that raise
questions as to the integrity of management. Which of the following conditions most likely would raise
such questions?
A.There are significant differences between the entity’s forecasted financial statements and the financial
statements to be audited.
B.The CPA will not be permitted to have access to sensitive information regarding the salaries of senior
C.There have been substantial inventory write-offs just before the year end in each of the past four
D.The CPA becomes aware of the existence of related party transactions while reading the draft
financial statements.

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