An Important Benefit of Industry Comparisons Is As

question 36

Multiple Choice

An important benefit of industry comparisons is as:

• A)an aid to understanding the client's business.
• B)an indicator of errors.
• C)an indicator of fraud.
• D)a least-cost indicator for audit procedures.

---

Definitions:

Tax Exempt

Describes income, property, or transactions that are legally free from tax liability.

Common Equity

The amount of ownership in a corporation that is held by common shareholders, represented by the value of common stock plus retained earnings.

Year-end Balance Sheets

Financial statements detailing a company's assets, liabilities, and equity at the end of a fiscal year.

Retained Earnings

Profits that a company retains rather than distributes to its shareholders as dividends, often used for reinvestment.