If the economy is experiencing a recession,an auditor should focus increased attention on which of the following accounts?
A)Purchase returns and allowances.
B)Allowance for doubtful accounts.
C)Common stock.
D)Noncontrolling interest of a subsidiary purchased during the year.

Question

Quizplus · Accepted Answer

During a recession, customers may struggle financially and be unable to pay their bills on time, leading to an increase in doubtful accounts. As a result, an auditor should focus increased attention on the allowance for doubtful accounts to ensure it is adequately stated.

If the Economy Is Experiencing a Recession,an Auditor Should Focus