Which of the following may indicate management fraud?

a. The name of a relative of a member of upper management is suggested to fill a Board of Directors vacancy.
b. Increases and decreases in inventory fluctuates from period to period.

c. Inconsistencies exist between what management is telling the auditor and what the auditor observes.

d. Several mistakes are discovered in the inventory records.

c
FEEDBACK: a. Incorrect, this is not an indication of potential fraud.
b. Incorrect, fluctuations are expected.
c. Correct.
d. Incorrect, mistakes are not indicative of possible fraud.