In Preparing for an Audit of the Retail Footwear Division

question 20

Multiple Choice

In preparing for an audit of the retail footwear division of a major retail organization,the auditor gathered the following information about the organization's stores: $$\begin{array} { l r r r r } & \text { All } & \text { Northeast } & \text { Southwest } & \text { Mid-Central } \\& \text { Stores } & \text { Region } & \text { Region } & \text { Region } \\& \$ 736,000 & \$ 840,000 & \$ 760,000 & \$ 630,000 \\\text { Average sales per store } & \$ 375,000 & \$ 420,000 & \$ 325,000 & \$ 395,000 \\\text { Average cost of goods sold per store } & 48 & 13 & 18 & 17 \\\text { Number of stores } & 1,800 & 2,200 & 1,850 & 1,550 \\\text { Average square feet per store } & \$ 137,000 & \$ 152,000 & \$ 140,000 & \$ 122,000 \\\text { Average sales per full-time employee } & \$ 98,000 & \$ 102,000 & \$ 82,000 & \$ 112,000 \\\text { Average wage related expense per store } & \$ 35,000 & \$ 285,000 & \$ 320,000 & \$ 115,000\end{array}$$ Based on the previous information,which of the following preliminary conclusions can the auditor use as a basis for further investigations?

• A)Sales per store are directly related to the size of the store.
• B)Sale clerks are less productive in larger size stores.
• C)Gross margin is directly related to the size of the store.
• D)Average square feet of store correlates with the number of stores in the district.

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Definitions:

Rabies

A viral disease that causes inflammation of the brain in humans and other mammals, transmitted through saliva from bites of infected animals.

Germinal Centers

Specialized sites within lymph nodes and spleen where mature B cells proliferate, differentiate, and mutate their antibody genes during an immune response.

Lymph Node

A small, bean-shaped structure that is part of the lymphatic system, playing a crucial role in filtering lymph and in the immune response by trapping pathogens and foreign particles.

Lymphocytes

A type of white blood cell that plays a crucial role in the body's immune response by recognizing and fighting pathogens.