An auditor should compare the unaudited financial statements with both past results and industry trends to gain an indication about the possibility of fraud.

Question

Quizplus · Accepted Answer

By comparing the unaudited financial statements with past results and industry trends, an auditor can identify any anomalies or red flags that could indicate the possibility of fraud. This helps the auditor to focus on areas of the financial statements that need further analysis and testing to ensure that the financial statements are fairly presented and free from material misstatement.

An Auditor Should Compare the Unaudited Financial Statements with Both