When Performing Planning Analytical Procedures for a Client the Auditor

question 18

Multiple Choice

When performing planning analytical procedures for a client the auditor detected that the gross profit percentage had declined by 50% from the previous year to the year currently under audit. The auditor should

• A) investigate the possibility the client may have made an error in their cost of goods sold computation.
• B) assist management in developing greater cost efficiencies in their product line.
• C) prepare a going concern opinion for the client.
• D) advise the client to have extensive disclosure to alleviate investor concerns.