Question: 1. The auditor performs analytical procedures and discovers an unexplained increase in the gross margin percentage. A possible explanation for this is: An increase in

1. The auditor performs analytical procedures and discovers an unexplained increase in the gross margin percentage. A possible explanation for this is:

An increase in the unit cost of producing goods which was not passed along to the consumer.

Unrecorded sales.

Fictitious inventory.

A change in the sales mix in the current year such that a greater percentage of unit sales are low margin items.

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