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.

---

Definitions:

Descriptive Research

A research method that involves observing and describing the behavior of a subject without influencing it in any way.

Secondary Data

Information that was collected for another purpose but can be repurposed for a current research need; it includes sources like reports, studies, and previous research.

Government Publications

Official documents issued by government bodies, including reports, policies, guidelines, and statistical data.

Quantitative Research

Research methodology that focuses on gathering numerical data and performing statistical analysis.