When Auditing Accounts Payable Using Classical Variables Sampling, Sue Finds

question 39

Essay

When auditing accounts payable using classical variables sampling, Sue finds evidence indicating that the account may be materially misstated. What are Sue's options?

---

Definitions:

Quality of Income Ratio

A metric that measures the proportion of income that comes from core business operations, indicating the reliability of a company's earnings.

Indirect Method

A way of reporting cash flows from operating activities by adjusting net income for changes in balance sheet accounts.

Operating Activities

Transactions that relate to the primary operations of a company, such as sales and service provision.

Indirect Method

A cash flow statement approach that adjusts net income for changes in non-cash working capital and other items to calculate operating cash flow.