The auditor typically begins an audit of retained earnings by obtaining a schedule of account activity for the period.

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The auditor typically begins an audit of retained earnings by obtaining a schedule of account activity for the period. This schedule summarizes the changes in the retained earnings balance during the audit period, including dividend distributions, net income, prior period adjustments, and other significant items. The auditor will use this schedule to reconcile the beginning and ending retained earnings balances and to identify any unusual or unexpected transactions that require further investigation.

The Auditor Typically Begins an Audit of Retained Earnings by Obtaining