Explain why an unexpected change in the gross profit ratio leads the auditor to suspect a wide

Question:

Explain why an unexpected change in the gross profit ratio leads the auditor to suspect a wide range of possible misstatements in recorded transactions and balances.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Auditing A Practical Approach

ISBN: 978-1119566007

3rd Canadian edition

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton, Valerie Warren

See More Books

Question Posted: Jun 20, 2019 07:21 AM

See More Questions

Describe the alternative methods entities use to determine their inventory at the end of the reporting period and the possible effect of each method on audit strategy.
The financial statements of TSMC are presented in Appendix A (at the back of the textbook). The complete annual report, including the notes to the financial statements, is available at the companys...
Selected transactions from the journal of Ann Wong, investment broker, are presented below (amounts in thousands). a. Post the transactions to T-accounts. b. Prepare a trial balance at August 31,...
1.1. Define a want and a need, and give an example of each. Then, explain how the relationship between wants and needs affects the way people spend money. (4 points) 2.. Identify and describe an...
On September 25, 2008 a client asks you the price of a call option with maturity November 15, 2010, written on the STRIP maturing on November 15, 2015, and with strike price 82. (a) What is the price...
In Exercises 916,a. List all possible rational zeros.b. Use synthetic division to test the possible rational zeros and find an actual zero.c. Use the quotient from part (b) to find the remaining...
Corporate sustainability and firm characteristics. Refer to the Business and Society (March 2011) study on how firm size and firm type impact corporate sustainability behaviors, Exercise
A scheme for concurrently heating separate water and air streams involves passing them through and over an array of tubes, respectively, while the tube wall is heated electrically. To enhance...
3.The primary goal of the financial management is ___choose correct option and explain and also explain incorrect options and also explain summary . Ato maximize the return Bto minimize the risk ....
The following transactions apply to Wade Company for 2013, the first year of operation: 1. Recognized $220,000 of service revenue earned on account. 2. Collected $162,000 from accounts receivable. 3....
It is increasingly common for companies to program their computer information system to print and distribute cheques without further authorization. As an auditor, describe controls you would expect...
Cut-off procedures can be applied to receiving reports issued before the year end or to liabilities recorded after the year end. Consider the separate merits of each approach in assuring the...
Describe how a classified board of directors could be used to thwart or discourage a takeover of control of a corporations board.
Describe in your own words how you would expect the data points on a scatterplot to be distributed if the following features were present (i.e. for each part, explain how the feature would look on a...
imagine this experimental setup: One temperature probe is in embedded in a small block of frozen sugar water at -20. The frozen sugar water is in a small test tube The melting/freezing point of this...
Question 2: (40 points: 10 each) During September, Sweet Foods manufactures a single product. The Company's material purchases amounted to 9,000 pounds at a price of $9.80 per pound. Actual costs...
E12-23 (Algo) (Supplement 12B) Preparing a Statement of Cash Flows, Indirect Method: T-Account Approach [LO 12-S2] Golf Goods Incorporated is a regional and online golf equipment retailer. The...
A symmetric compound channel in over bank flow has a main channel with a bottom width of 30 m, side slopes of 1:1, and a flow depth of 3m. The floodplains on either side of the main channel are both...
A medical researcher wants to test the claim that healthy adults have a mean body temperature less than 98.6F.
Why do markets typically lead to an efficient outcome for buyers and sellers?
We can conclude that analytical procedures provide persuasive evidence: (a) Always. (b) Never. (c) If they do not provide sufficient evidence by themselves to allow us to conclude that the account is...
The reliability of data used for analytical procedures: (a) Affects the persuasiveness of the evidence from analytical procedures. (b) Is more useful on a consolidated basis than an individual...
The reliability of data used for analytical procedures: (a) Affects the persuasiveness of the evidence from analytical procedures. (b) Is more useful on a consolidated basis than an individual...
The payroll register of Ruggerio Co. indicates $13,800 of social security withheld and $3,450 of Medicare tax withheld on total salaries of $230,000 for the period. Federal withholding for the period...
All of the following are included on Form 1040, page 1, EXCEPT: The determination of filing status. The Presidential Election Campaign check box. The income section. The paid preparer signature line.
Question One: (25 marks) (X) Inc. purchased 80% of the outstanding voting shares of (Y) for $360,000 on July 1, 2017. On that date, (Y) had common shares and retained earnings worth $180,000 and...

Explain why an unexpected change in the gross profit ratio leads the auditor to suspect a wide

Question:

Step by Step Answer:

An adverse change could indicate rising costs and the poss...View the full answer

Auditing A Practical Approach

Students also viewed these Business questions