As a Result of Analytical Procedures, the Independent Auditor Determines

question 19

Multiple Choice

As a result of analytical procedures, the independent auditor determines that the gross profit percentage has declined from 30% in the preceding year to 20% in the current year. The auditor should:

• A) express an opinion that is modified due to the inability of the client company to continue as a going concern.
• B) evaluate management's performance in causing this decline.
• C) require footnote disclosure.
• D) consider the possibility of an error in the financial report.

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Definitions:

Negative Self-selection

A scenario where individuals with less favorable characteristics are more likely to choose a particular option or action.

Migration

The movement of people from one place to another, which can be within a country or across international borders, often in search of better living conditions or employment.

Educated People

Individuals who have acquired knowledge, skills, and learning through formal education systems, extending often to higher or tertiary education.

Emigrant Remittances

Funds that migrants send back to their home countries, often to support family members or invest in development projects.