Among the tools the auditor may employ to determine the reasonableness of the sales amount for a company during a given accounting period is regression analysis, whereby the company's sales are predicted using various economic factors such as interest rates and unemployment.

a. Discuss the advantages and disadvantages of using this technique on a large automobile company, such as Ford.

b. Discuss the advantages and disadvantages of using this technique on a smaller firm, such as a regional distributor of photographic equipment and supplies.