An auditor compares this year's revenues and expenses with those of the previous year and investigates all changes exceeding 10 per cent.By carrying out this procedure the auditor would be most likely to learn that:
A)an increase in property tax rates has not been recognised in the client's accrual.
B)the provision for uncollectible accounts is inadequate because of worsening economic conditions.
C)fourth-quarter payroll taxes were not paid.
D)the client changed its capitalisation policy for small non-current assets.

Question

Quizplus · Accepted Answer

This procedure is likely to reveal changes in accounting policies, such as a change in the capitalisation policy for small non-current assets, as it would affect the comparison of expenses year over year.

An Auditor Compares This Year's Revenues and Expenses with Those