There are many types of analytical procedures that the auditor can conduct during the planning stage of the financial statement audit.What is the purpose of comparing the gross margin with prior years and looking for large fluctuations?
A)to understand the client's industry and business
B)to assess going concern
C)to identify possible misstatements
D)to reduce detailed tests

Question

Quizplus · Accepted Answer

Comparing the gross margin with prior years and looking for large fluctuations helps the auditor identify possible misstatements. The gross margin is an important indicator of a company's profitability, and large fluctuations may indicate errors or fraud in the financial statements. Therefore, this analytical procedure can help the auditor identify areas where further investigation is needed to ensure the accuracy and reliability of the financial statements.

There Are Many Types of Analytical Procedures That the Auditor