As a result of analytical procedures, the auditor determines that the gross profit percentage has declined from
Question:
As a result of analytical procedures, the auditor determines that the gross profit percentage has declined from 30 percent in the preceding year to 20 percent in the current year. The auditor should
a. Require a footnote emphasizing the decline for full disclosure.
b. Consider the possibility of an error in property and equipment.
c. Consider the possibility of an error in inventory.
d. Evaluate management's performance in causing this decline.
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Given the decline in gross profit percentage the auditor should consider various possibil...View the full answer
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Related Book For 
Auditing An Assertions Approach
ISBN: 9780471134213
7th Edition
Authors: G. William Glezen, Donald H. Taylor
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