A client that recently loosened its credit-granting policies uses percentages of aging categories as the basis for the initial calculation of the allowance for doubtful accounts.  When auditing the allowance for doubtful accounts, the auditor must perform procedures to ensure that…    Question options:   The outstanding invoices were aged correctly since the aging is the basis for calculating the allowance.   The client's aging categories are consistent with industry averages.   The percentages of aging categories used to calculate the allowance were not impacted by managerial judgment.   The percentages of aging categories used to calculate the allowance for the current year are identical to prior years.

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Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.