Which One of the Following Is NOT an Audit Procedure

question 70

Multiple Choice

Which one of the following is NOT an audit procedure that is commonly used to search for contingent liabilities?

• A) Analyse legal expense for the period under audit.
• B) Review the minutes of directors' and shareholders' meetings.
• C) Inquiries of management (orally and in writing).
• D) Review the current year's tax return.

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Definitions:

Gross Margin

The difference between revenue and cost of goods sold, which serves as a measure of a company’s manufacturing and distribution efficiency.

Return On Total Assets

A financial ratio that measures the profitability of a company relative to its total assets, indicating how efficiently a company uses its assets to generate profits.

Return On Equity

A metric that gauges the effectiveness of a firm in utilizing investments to drive earnings growth, determined by dividing net income by shareholders' equity.

Earnings Per Share

A financial metric calculated by dividing the company's net income by the number of its outstanding shares, indicating the profitability of a company on a per-share basis.