Question: When analytical procedures disclose unexpected changes in financial relationships relative to prior years, the auditors consider the possible reasons for the changes. Give several possible
a. The rate of inventory turnover (ratio of cost of goods sold to average inventory) has declined from the prior year’s rate.
b. The number of days’ sales in accounts receivable has increased over the prior year.
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a The possible reasons for a decrease in the rate of inventory turnover include the following 1 De... View full answer
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