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:

Homosexual Sexual Orientation

denotes a sexual orientation characterized by a romantic or sexual attraction to individuals of the same sex.

XXY Sex Chromosomes

A condition known as Klinefelter syndrome, where a male is born with an extra copy of the X chromosome.

Secondary Sex Characteristics

Features that appear at puberty, distinguishing the two sexes from each other but are not directly involved in reproduction, such as facial hair in men and breast development in women.

Primary Sex Characteristics

The physical features that are directly involved in human reproduction, including genital organs.