financial reporting

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Which of the following factors most likely would heighten an auditor’s concern about the risk of fraudulent financial reporting?
A. The audit committee’s approval of the initial selection of accounting principles.
B. A lack of competition in the entity’s industry, accompanied by increasing profit margins.
C. Management’s disclosure of unresolved litigation and contingent liabilities.
D. Year-end adjustments by the entity that significantly affect financial results.

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