An Auditor Compares Annual Revenues and Expenses with Similar Amounts

question 51

Multiple Choice

An auditor compares annual revenues and expenses with similar amounts from the prior year and investigates all changes exceeding 10%.This procedure most likely could indicate that:

• A)Fourth quarter payroll taxes were properly accrued and recorded,but were not paid until early in the subsequent year.
• B)Unrealized gains from increases in the value of available-for-sale securities were recorded in the income account for trading securities.
• C)The annual provision for uncollectible accounts expense was inadequate because of worsening economic conditions.
• D)Notice of an increase in property tax rates was received by management,but was not recorded until early in the subsequent year.

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Definitions:

Pavlovian Preconditioning

A process in classical conditioning where a neutral stimulus is presented just before a conditioned stimulus, often enhancing the learning of the conditioned response.

Sick

Sick refers to a state of not being healthy, experiencing illness, disease, or discomfort, affecting an organism's normal functioning.

Ritualistic Behaviors

Repetitive actions often performed with a symbolic meaning or to fulfill a psychological or cultural need.

Superstitious

A belief or behavior that is based on a false conception of cause and effect, particularly in attributing outcomes to non-related actions.