Which One of the Following Substantive Analytical Procedures Would Be

question 126

Multiple Choice

Which one of the following substantive analytical procedures would be most useful in alerting the auditor to the possibility of obsolete inventory?

• A) Compare gross margin percentage with that of previous years.
• B) Compare unit costs of inventory with previous years.
• C) Compare inventory turnover ratio with previous years.
• D) Compare current year manufacturing costs with previous years.

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Definitions:

Mentally Incapacitated

A condition where an individual is unable to make informed decisions or handle their own affairs due to mental limitations or dysfunction.

Rules of Society

The norms, customs, and laws that regulate individual and collective behavior within a community or society.

Insanity Defense

A legal defense where the defendant claims they were not responsible for their actions due to psychiatric illness at the time of the crime.

Chronically Insane

A term no longer widely used, historically referring to individuals with long-term, severe mental health conditions.