An Auditor Noted That Client Sales Had Increased 10 Percent

question 46

Multiple Choice

An auditor noted that client sales had increased 10 percent for the year.At the same time,cost of goods sold as a percentage of sales had decreased from 45 percent to 40 percent and year-end accounts receivable had increased by 8 percent.The auditor is most likely concerned about

• A) Unrecorded costs.
• B) Improper credit approvals.
• C) Improper sales cut-off.
• D) Fictitious sales.