In the Planning Phase,Denis Conducted an Analytical Procedure to Compare

question 9

Multiple Choice

In the planning phase,Denis conducted an analytical procedure to compare the allowance for doubtful accounts balance to the accounts receivable balance.In the prior years,the allowance for the doubtful accounts/accounts receivable ratio was between 2.5% to 3.5%.This year,the number is 1.25%.What should Denis do?

• A)Change the assessed inherent risk
• B)Conduct additional testing to justify the lower bad debt.
• C)Advise management that they should increase the allowance for doubtful accounts provision.
• D)Document this difference and continue with audit work to see if this is pervasive bias of management.

---

Definitions:

Disruptive Mood Dysregulation Disorder

A disorder in children characterized by immature and inappropriate temper outbursts that are grossly out of proportion to a situation in intensity and duration.

Temper Outbursts

Sudden, uncontrolled expressions of anger, frustration, or other emotions, often seen in young children but can occur at any age.

Diagnostic Criterion

A specific symptom or characteristic used as part of a set of criteria to identify and diagnose a particular disease or disorder.

Bipolar II Disorder

Form of bipolar disorder in which only hypomanic episodes are experienced and the depressive component is more pronounced.