Auditors can assess the adequacy of their client's closing procedurby:
A) Checking the accuracy of accrual calculations around year-end.
B) Looking at earnings trends to assess whether reported income is in line with similar periods in prior years.
C) a and b.
D) None of the above.

Question

Quizplus · Accepted Answer

Checking the accuracy of accrual calculations around year-end helps ensure that all expenses and revenues have been recorded in the correct period, which is necessary for accurate financial statements. Looking at earnings trends is also important to assess whether reported income is consistent with prior years, which can indicate if unusual events or transactions may have skewed the results. Therefore, both options a and b are important for auditors to assess the adequacy of their client's closing procedures.

Auditors Can Assess the Adequacy of Their Client's Closing Procedurby