2.2. The following are sales, cost of sales, and inventory data of client, figures are in $ millions: YEAR 2019 SALE 186.8 COS 117.2 18.4 19.2 OB EB Requirements: 2020 192.8 108.4 19.2 29.6 2018 178.4 110.8 15.6 18.4 a) Assume that $10mil is considered material for audit planning purposes for 2020. Do any of the fluctuations in the gross margin as a percent of sales ratios indicate a possible material misstatement? b) List 3 logical causes of the changes in the gross margin as a percent of sales c) For each of the possible cause, list the further action for auditor to verify the cause
2.2. The following are sales, cost of sales, and inventory data of client, figures are in $ millions: YEAR 2019 SALE 186.8 COS 117.2 18.4 19.2 OB EB Requirements: 2020 192.8 108.4 19.2 29.6 2018 178.4 110.8 15.6 18.4 a) Assume that $10mil is considered material for audit planning purposes for 2020. Do any of the fluctuations in the gross margin as a percent of sales ratios indicate a possible material misstatement? b) List 3 logical causes of the changes in the gross margin as a percent of sales c) For each of the possible cause, list the further action for auditor to verify the cause
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle
Section: Chapter Questions
Problem 26RQSC
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![2.2. The following are sales, cost of sales, and inventory data of client, figures are in $ millions:
YEAR
2018
SALE
178.4
COS
110.8
15.6
18.4
ОВ
EB
Requirements:
2020
192.8
108.4
19.2
29.6
2019
186.8
117.2
18.4
19.2
a) Assume that $10mil is considered material for audit planning purposes for 2020. Do any of the
fluctuations in the gross margin as a percent of sales ratios indicate a possible material
misstatement?
b)
List 3 logical causes of the changes in the gross margin as a percent of sales
c) For each of the possible cause, list the further action for auditor to verify the cause](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff9b46f2e-d815-45e5-ab84-b305e268b271%2F7bab3cb3-a89e-4d31-85d0-a7bd25e5ad42%2Ffx2f4w_processed.png&w=3840&q=75)
Transcribed Image Text:2.2. The following are sales, cost of sales, and inventory data of client, figures are in $ millions:
YEAR
2018
SALE
178.4
COS
110.8
15.6
18.4
ОВ
EB
Requirements:
2020
192.8
108.4
19.2
29.6
2019
186.8
117.2
18.4
19.2
a) Assume that $10mil is considered material for audit planning purposes for 2020. Do any of the
fluctuations in the gross margin as a percent of sales ratios indicate a possible material
misstatement?
b)
List 3 logical causes of the changes in the gross margin as a percent of sales
c) For each of the possible cause, list the further action for auditor to verify the cause
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