Auditors Sometimes Use Ratios as Audit Evidence

question 83

Multiple Choice

Auditors sometimes use ratios as audit evidence. For example, an unexplained increase in the ratio of gross profit to sales may suggest which of the following possibilities?

• A)Fictitious purchases.
• B)Fictitious sales.
• C)Selling and general expenses erroneously being recorded as merchandise purchases.
• D)Unrecorded sales.

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Definitions:

Antidepressant Drugs

Medications used to alleviate symptoms of depression by affecting neurotransmitter levels in the brain.

Therapeutic Procedures

involve medical or surgical methods applied to improve health, alleviate symptoms, and treat diseases.

Systematic Desensitization

A behavioral therapy technique aimed at reducing anxiety through gradual exposure to the feared object or situation paired with relaxation exercises.

Exposure Therapy

A psychological treatment method where individuals confront their fears in a controlled environment to reduce their sensitivity.