Which of the Following Is a Correct Statement Regarding Analytical

question 90

Multiple Choice

Which of the following is a correct statement regarding analytical procedures?

• A) If an auditor identifies a possible misstatement in sales using analytical procedures, accounts payable will be the likely offsetting misstatement.
• B) Auditors should also compare the results of their analytical procedures to budgets and industry trends.
• C) If sales are overstated, the income statement will be incorrect, but the balance sheet will be correct.
• D) If an analytical procedure uncovers an unusual fluctuation, the auditor must assume fraud is involved.

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Definitions:

Volcanic Center

A location on the Earth's surface that has been the site of multiple volcanic eruptions and activities over a long period.

Energy Resource

Natural resources that can be converted into energy forms usable by humans, such as oil, coal, solar, and wind.

Salt Dome

A geological formation created when layers of salt are pushed upward by the weight of overlying rock, sometimes trapping oil and gas.

Fault Zone

A region of numerous, closely spaced faults where the Earth's crust has fractured and moved.