Which of the following ratios would an engagement partner most likely calculate when reviewing the balance sheet in the overall review stage of an audit?

Question

Quizplus · Accepted Answer

Choice "D" is correct. During the final review stage of an audit, the auditor focuses on the overall presentation of the financial statements. Total debt/total assets indicate the portion of assets financed by creditors, which is a meaningful ratio to calculate during the final audit review. Choice "A" is incorrect. Quick assets/current assets simply indicate the percentage of current assets that are also "quick" assets. It is not a particularly meaningful ratio. Choice "B" is incorrect. Accounts receivable/inventory is not a meaningful ratio because it compares a figure based on retail dollars with a cost-based figure. Choice "C" is incorrect. Interest payable/interest receivable is not a meaningful ratio because these two amounts are not related.

Which of the Following Ratios Would an Engagement Partner Most