which of the following, discovered during a non - issuer audit, most likely would raise a question…

which of the following, discovered during a non - issuer audit, most likely would raise a question concerning possible noncompliance with laws and regulations?\ninternal control material weaknesses previously reported to management were not corrected.\nrelated party transactions, although properly disclosed, were pervasive during the year.\nthe entity was a campaign contributor to several local political candidates during the year.\nthe entity prepared several large checks payable to cash during the year.

which of the following, discovered during a non - issuer audit, most likely would raise a question concerning possible noncompliance with laws and regulations?\ninternal control material weaknesses previously reported to management were not corrected.\nrelated party transactions, although properly disclosed, were pervasive during the year.\nthe entity was a campaign contributor to several local political candidates during the year.\nthe entity prepared several large checks payable to cash during the year.

Answer

Brief Explanations:

  • Internal control material weaknesses: While important for internal operations, not corrected weaknesses don't directly imply non - compliance with laws and regulations.
  • Related - party transactions: If properly disclosed, pervasive related - party transactions are more of a disclosure and transparency issue rather than a non - compliance with laws and regulations (assuming disclosure meets legal requirements).
  • Campaign contributions: Unless there are specific illegalities in the contribution amounts, methods etc. (not indicated here), being a campaign contributor is a normal political activity (in many legal frameworks).
  • Checks payable to cash: Preparing large checks payable to cash can be a red - flag for money laundering, embezzlement or other illegal activities that violate financial laws and regulations.

Answer:

The entity prepared several large checks payable to cash during the year.