Which of the Following Analytical Procedures Most Likely Would Be

question 62

Multiple Choice

Which of the following analytical procedures most likely would be used during the planning stage of an audit?

• A)Comparing current-year to prior-year sales volumes.
• B)Reading the financial statements and notes and considering the adequacy of evidence.
• C)Comparing the current-year ratio of aggregate salaries paid to the number of employees to the prior-year's ratio.
• D)Reading the letter from the client's attorney and considering the threat of litigation.

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Definitions:

Equilibrium

A state in a chemical reaction where the rates of the forward and reverse reactions are equal, leading to no net change in the concentrations of reactants and products.

Aldol Condensation

A chemical reaction that combines two aldehyde or ketone molecules to form a larger β-hydroxyketone, followed typically by dehydration to yield a conjugated enone.

Claisen Condensation

A carbon-carbon bond forming reaction between two esters or one ester and another carbonyl compound in the presence of a strong base.

Michael Addition

A nucleophilic addition of a carbanion to an α,β-unsaturated carbonyl compound resulting in a carbon-carbon bond formation.