Once the Audit-Sensitive Processes Are Identified, What Kind of Information

question 18

Essay

Once the audit-sensitive processes are identified, what kind of information does the auditor need to gather about each process and what tools can the auditor use to assist in this analysis?

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Definitions:

Gross Margin

Gross margin is a financial metric that measures the difference between revenue and the cost of goods sold (COGS), divided by revenue.

Accounts Receivable Turnover

A ratio that measures how effectively a company collects its receivables, calculated by dividing total net sales by the average accounts receivable.

Inventory Turnover Ratio

A metric indicating how often a company's inventory is sold and replaced over a specific period, useful in evaluating the efficiency of inventory management.

Return on Equity

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.