Comparing client data with industry data and with its own results for the previous year, the auditor
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Comparing client data with industry data and with its own results for the previous year, the auditor finds that the number of days' sales in accounts receivable for this year is 66 for the client, 42 for the industry average, and 38 for the client's previous year. Inventory levels have remained the same. The increase in this ratio could indicate all of the following except:
a. Fictitious sales during the current year.
b. A policy to promote sales through less strenuous credit policies.
c. Potential problems with product quality and the inability of the client to meet warranty claims.
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Related Book For
Auditing Concepts For A Changing Environment
ISBN: 9781284249286
5th Edition
Authors: Larry E. Rittenberg, Bradley J. Schwieger
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