When analytical procedures in the sales and collection cycle uncover unusual fluctuations, the auditor should make additional inquiries of management.

Question

Quizplus · Accepted Answer

Unusual fluctuations revealed by analytical procedures in the sales and collection cycle can be an indication of potential financial reporting issues. Therefore, the auditor should make additional inquiries of management to gain a better understanding of the underlying reasons for the fluctuations and assess the risk of material misstatement.

When Analytical Procedures in the Sales and Collection Cycle Uncover