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:

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Neurological Damage

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A type of paint that contains lead, a toxic metal, which can pose serious health risks if ingested or inhaled.