Which One of the Following Substantive Analytical Procedures Would Be

question 126

Multiple Choice

Which one of the following substantive analytical procedures would be most useful in alerting the auditor to the possibility of obsolete inventory?

• A) Compare gross margin percentage with that of previous years.
• B) Compare unit costs of inventory with previous years.
• C) Compare inventory turnover ratio with previous years.
• D) Compare current year manufacturing costs with previous years.

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Definitions:

Waste Management

The collection, transport, processing, recycling, and disposal of waste materials in a manner that is in accordance with health, conservation, and aesthetic considerations.

Industrial Discharge Permit

A government authorization for a business to release specified amounts and types of waste into the environment.

Publicly Owned Treatment Works

Facilities owned by a state or municipality that are designed to treat municipal sewage or industrial wastewater.

Ocean Dumping

The disposal of waste materials directly into the ocean, often regulated to prevent environmental harm.