When Performing Planning Analytical Procedures for a Client the Auditor

question 26

Multiple Choice

When performing planning analytical procedures for a client the auditor detected that the gross profit percentage had declined by 50% from the previous year to the year currently under audit. The auditor should:

• A) investgate the possibility the client may have made an error in their cost of goods sold computation.
• B) assist management in developing greater cost efficiencies in their product line.
• C) prepare a going concern opinion for the client.
• D) advise the client to have extensive disclosure to alleviate investor concerns.

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Definitions:

Summarized

Summarized means to condense a larger piece of text or information into a brief overview, highlighting the main points.

Compliance Report

A document detailing how well a company or individual adheres to required regulations, standards, or laws.

Pharmaceutical Company

An organization engaged in the research, development, production, and marketing of drugs and medications.

Television Ads

Short promotional messages or commercials broadcasted on television to market products, services, or ideas to a wide audience.