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With respect to performing analytical procedures to understand total revenue, the auditor should understand _______. - how the firm relates its cost of goods sold

With respect to performing analytical procedures to understand total revenue, the auditor should understand _______.

- how the firm relates its cost of goods sold to revenue recognition

- the entitys capacity, the maximum volume of sales that it could generate if it fully utilized its facilities and employees to manufacture and deliver products and services

- how the client firm handles depreciation entries related to contra-revenue accounts

- revenue recognition methods of all firms within the industry

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