Answered: One of your audit planning procedures…

One of your audit planning procedures was the ratio analysis. You noted that the debt to assets ratio of your client is 0.3. Is that good

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

One of your audit planning procedures was the ratio analysis. You noted that the debt to assets ratio of your client is 0.3. Is that good? Explain.

Definition Definition Methods and techniques used by the auditor to gather the appropriate evidence so that a true and fair judgment can be made on the quality of the financial statements of the client. Audit procedures are developed after determining audit objectives, scope, approach, and risk assessment.

Expert Solution

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Ratios are calculated to compare two items of the company in the financial statement.

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