Auditors sometimes use comparisons of ratios and analytical procedures as audit evidence. An unexpected decrease in the ratio of gross profit to sales may suggest which of the following?     Unrecorded purchases     Unrecorded or under reported sales     Merchandise purchases being charged to  SG&A expenses     None of the answers provided.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Question 12

Auditors sometimes use comparisons of ratios and analytical procedures as audit evidence. An unexpected decrease in the ratio of gross profit to sales may suggest which of the following?

   

Unrecorded purchases

   

Unrecorded or under reported sales

   

Merchandise purchases being charged to  SG&A expenses

   

None of the answers provided.

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