Perform an analytical review on the given ratios below in the planning stage of the audit...
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Perform an analytical review on the given ratios below in the planning stage of the audit process, identify areas of concern with their justifications and suggest assertion and ledger accounts impacted. 2- What audit process/task should be assigned for each area of concern? 3- Suggest the relevant audit procedures to react to the areas of concern identified above? Current ratio Quick ratio Gross profit margin inventory turnover Account receivables turnover Asset turnover/deb to equity ratio Return on sales Return on asset Return on shareholder's equity Times interest earned Bad and doubtful debts 2020 3.69 3.21 55.95 5.96 11.13 28.15 31.64 31.37 34.02 1.64 72,000 2019 3.15 2.65 54.84 6.81 9.37 27.81 32.15 33.4 36.52 0 -17,000 Perform an analytical review on the given ratios below in the planning stage of the audit process, identify areas of concern with their justifications and suggest assertion and ledger accounts impacted. 2- What audit process/task should be assigned for each area of concern? 3- Suggest the relevant audit procedures to react to the areas of concern identified above? Current ratio Quick ratio Gross profit margin inventory turnover Account receivables turnover Asset turnover/deb to equity ratio Return on sales Return on asset Return on shareholder's equity Times interest earned Bad and doubtful debts 2020 3.69 3.21 55.95 5.96 11.13 28.15 31.64 31.37 34.02 1.64 72,000 2019 3.15 2.65 54.84 6.81 9.37 27.81 32.15 33.4 36.52 0 -17,000
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Here are the stepwise calculations for each question 1 Current ratio decreased from 2019 to 2020 Cal... View the full answer
Related Book For
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
Posted Date:
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