EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Chapter 8, Problem 33DQP
To determine
Choose the most probable explanation for each of the independent situations.
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Students have asked these similar questions
As a result of analytical procedures an auditor determines that gross profit has declined from 30% to 15% in the current year. The auditor should..
A. Document manamgent intentions with respect to reversing the trend.
B. Evaluate managment's performance in causing the deline
C. Require a footnote disclosure
D. Consider the possibility of an error in the financial statements.
As a result of analytical procedures, the auditor determines that the gross profitpercentage has declined from 30% in the preceding year to 20% in the current year.The auditor should(1) express a qualified opinion due to inability of the client company to continue asa going concern.(2) evaluate management’s performance in causing this decline.(3) require footnote disclosure.(4) consider the possibility of a misstatement in the financial statements.
When analytical procedures disclose unexpected changes in financial relationships relative to prior years, the auditors consider the possible reasons for the changes. Give several possible reasons for the following significant changes in relationships:
a. The rate of inventory turnover (ratio of cost of goods sold to average inventory) has declined from the prior year’s rate.
b. The number of days’ sales in accounts receivable has increased over the prior year.
Chapter 8 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 15RQCh. 8 - Your client, Harper Company, has a contractual...Ch. 8 - Prob. 17RQCh. 8 - Prob. 18RQCh. 8 - Prob. 19RQCh. 8 - Prob. 20RQCh. 8 - Prob. 21RQCh. 8 - Prob. 22RQCh. 8 - Prob. 23RQCh. 8 - Prob. 24RQCh. 8 - Prob. 25.1MCQCh. 8 - Prob. 25.2MCQCh. 8 - Prob. 25.3MCQCh. 8 - Prob. 26.1MCQCh. 8 - Prob. 26.2MCQCh. 8 - Prob. 26.3MCQCh. 8 - Which one of the following statements is correct...Ch. 8 - Prob. 27.2MCQCh. 8 - Prob. 27.3MCQCh. 8 - Prob. 28.1MCQCh. 8 - Prob. 28.2MCQCh. 8 - Prob. 28.3MCQCh. 8 - Prob. 29DQPCh. 8 - Prob. 30DQPCh. 8 - Prob. 31DQPCh. 8 - Your comparison of the gross margin percent for...Ch. 8 - Prob. 33DQPCh. 8 - Prob. 34DQPCh. 8 - Prob. 35DQPCh. 8 - Prob. 36DQPCh. 8 - Prob. 37DQPCh. 8 - Following are statements of earnings and financial...
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