Q:

When auditing prepaid insurance, an auditor discovers that the original insurance policy on plant equipment is not available for inspection. The policy\'s absence most likely indicates the possibility of a

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When auditing prepaid insurance, an auditor discovers that the original insurance policy on plant equipment is not available for inspection. The policy's absence most likely indicates the possibility of a


  1. insurance premium due but not recorded
  2. deficiency in the coinsurance provision
  3. lien on the plant equipment
  4. understatement of insurance expense

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C. lien on the plant equipment

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