Preliminary Analytical Procedures for an Audit Client Focusing on Liquidity

question 153

True/False

Preliminary analytical procedures for an audit client focusing on liquidity activity ratios find that the client's accounts receivable turnover ratio is significantly better than in previous years. The ratio is also significantly better compared to similar firms in the same industry. The results of this ratio indicate, preliminarily, that the accounts receivable area has been identified as having increased risk to the auditor.

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Definitions:

Equal Rights

The principle that every individual is entitled to the same rights and freedoms without any discrimination.

Congress

The national legislative body of the United States, consisting of two houses: the Senate and the House of Representatives.

Antislavery Poet

A poet whose work actively opposes and criticizes the institution of slavery, often advocating for abolition and human rights.

John Greenleaf Whittier

An American Quaker poet and advocate for the abolition of slavery in the United States, known for his deep moral convictions and influence on the abolitionist movement.