Why does the auditor divide the financial statements into smaller segments?
A) Using the cycle approach makes the audit more manageable.
B) Most accounts have few relationships with others and so it is more efficient to break the financial statements into smaller pieces.
C) The cycle approach is used because auditing standards require it.
D) All of the above are correct.

Question

Quizplus · Accepted Answer

Dividing the financial statements into smaller segments using the cycle approach makes the audit more manageable. This approach allows the auditor to focus on specific areas and accounts, making it easier to perform detailed testing and identify potential errors or fraud.

Why Does the Auditor Divide the Financial Statements into Smaller