For the expectations, results, and subsequent client explanations in the table below, click on \begin{tabular}{|c|c|c|c|c|} \hline & A & B & c & D \\ \hline 1 & Auditor expectation & Actual result & Client explanation & Audit response \\ \hline 2 & \begin{tabular}{l} Gross profit was 2% in the \\ prior year; similar profit \\ expected in year 1. \end{tabular} & \begin{tabular}{l} Gross profit was 12% in year \\ 1. \end{tabular} & \begin{tabular}{l} Sold more expensive \\ products with a higher \\ gross margin during the \\ year. \end{tabular} & \\ \hline 3 & \begin{tabular}{l} Increase in interest expense \\ due to increase in debt. \end{tabular} & \begin{tabular}{l} Interest expense stayed the \\ same. \end{tabular} & \begin{tabular}{l} Debt was refinanced \\ during the year. \end{tabular} & \\ \hline 4 & \begin{tabular}{l} Property, plant, and \\ equipment acquisitions \\ generally do not fluctuate \\ from year to year. \end{tabular} & \begin{tabular}{l} Property, plant, and \\ equipment acquisitions \\ decreased significantly \\ from the previous year. \end{tabular} & \begin{tabular}{l} No changes were made to \\ property, plant, and \\ equipment acquisition \\ practices. \end{tabular} & \\ \hline 5 & \begin{tabular}{l} Shipping January orders in \\ December is a common \\ industry practice. \end{tabular} & \begin{tabular}{l} Sales have grown in each of \\ the last three years. \end{tabular} & \begin{tabular}{l} Increased marketing \\ efforts have positively \\ influenced sales. \end{tabular} & \\ \hline 6 & \begin{tabular}{l} The industry historically has \\ few losses on retired \\ assets. \end{tabular} & \begin{tabular}{l} There have been excessive \\ recurring losses on assets \\ retired. \end{tabular} & \begin{tabular}{l} Losses were due to \\ increased asset usage. \end{tabular} & \\ \hline \end{tabular}