Which of the Following Is a Correct Statement Regarding Analytical

question 20

Multiple Choice

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

• A)A major strength in using industry ratios for auditing is the difference between the nature of the client's financial information and that of the firms making up the industry totals.
• B)Common-size financial statements display all items as a percentage change from a base year.
• C)Auditors should investigate the most significant differences between budgeted and actual results.
• D)In order to look for a misstatement in the allowance for bad debts, the auditor should divide gross sales by sales returns and allowances.

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