Quiz 2: Analytical Procedures
Accounts receivable confirmations had been useless due to a very low response price inside
the previous yr audit. - ANS-Perform trade methods to test the existence and accuracy of
bills receivable instead of sending fine confirmations.
Accounts receivable turnover reduced extensively from prior yr. What are three feasible
reasons for this locating? - ANS-A. Items shipped on consignment over the last month of the
12 months were recorded as income.
B. A huge wide variety of credit score memos for lower back products that were issued over
the past month of the 12 months were not recorded.
C. A larger percent of income took place over the last month of the yr as compared to the
earlier 12 months.
An auditor's decision whether to use analytical approaches as substantive assessments
normally is determined by means of the - ANS-Precision and reliability of the records used to
develop expectancies
Analytical processes are maximum appropriate when checking out which of the following
kind of transactions? - ANS-C. Operating price transactions
Analytical approaches indicated a huge slowing in bills receivable turnover. - ANS-Expand
the assessment of coins receipts after yr-end to assess the collectability of accounts
receivable
Analytical tactics: - ANS-D. Can offer substantial evidence.
Assume that working income extended from the earlier year although the entity changed into
less worthwhile than within the previous year. What are possible motives for this locating? -
ANS-A. Interest quotes were better in the course of the current year than they have been
within the prior year.
C. The effective earnings tax charge improved, in comparison to the prior yr.
D. Short-time period borrowing became refinanced on a long-term basis at better interest
quotes.
During audit making plans, the auditor makes use of analytical procedures more often than
not to: - ANS-D. Decide the character, quantity, and timing of audit methods.
Gross margin percentage was unchanged from the earlier yr even though gross margin
accelerated from the earlier yr. Which of the subsequent is a likely reason for this locating? -
ANS-Sales elevated at the same percentage as cost of products offered, in comparison to
the previous yr.
Accounts receivable confirmations had been useless due to a very low response price inside
the previous yr audit. - ANS-Perform trade methods to test the existence and accuracy of
bills receivable instead of sending fine confirmations.
Accounts receivable turnover reduced extensively from prior yr. What are three feasible
reasons for this locating? - ANS-A. Items shipped on consignment over the last month of the
12 months were recorded as income.
B. A huge wide variety of credit score memos for lower back products that were issued over
the past month of the 12 months were not recorded.
C. A larger percent of income took place over the last month of the yr as compared to the
earlier 12 months.
An auditor's decision whether to use analytical approaches as substantive assessments
normally is determined by means of the - ANS-Precision and reliability of the records used to
develop expectancies
Analytical processes are maximum appropriate when checking out which of the following
kind of transactions? - ANS-C. Operating price transactions
Analytical approaches indicated a huge slowing in bills receivable turnover. - ANS-Expand
the assessment of coins receipts after yr-end to assess the collectability of accounts
receivable
Analytical tactics: - ANS-D. Can offer substantial evidence.
Assume that working income extended from the earlier year although the entity changed into
less worthwhile than within the previous year. What are possible motives for this locating? -
ANS-A. Interest quotes were better in the course of the current year than they have been
within the prior year.
C. The effective earnings tax charge improved, in comparison to the prior yr.
D. Short-time period borrowing became refinanced on a long-term basis at better interest
quotes.
During audit making plans, the auditor makes use of analytical procedures more often than
not to: - ANS-D. Decide the character, quantity, and timing of audit methods.
Gross margin percentage was unchanged from the earlier yr even though gross margin
accelerated from the earlier yr. Which of the subsequent is a likely reason for this locating? -
ANS-Sales elevated at the same percentage as cost of products offered, in comparison to
the previous yr.
