Which of the following might alert an auditor to the possibility of fraud in a division?

Which of the following might alert an auditor to the possibility of fraud in a division?

I. The division is not scheduled for an external audit this year.

II. Sales have increased by 10 percent.

III. A significant portion of management’s compensation is directly tied to reported net income of the division.
A . I only
B . III only
C . I and II only
D . I, II, and III

Answer: B