Lithgow and Harris, CPAs are performing the audit of WildFlower Grocery Stores. Lithgow and Harris relates annual revenue by sales per square feet and sales per customer. What type of analysis is Lithgow and Harris most likely performing?
A) Ratio analysis.
B) Critical analysis.
C) Reasonableness tests.
D) Non-statistical analysis.

Question

Quizplus · Accepted Answer

Reasonableness tests involve comparing financial data with expected values based on relationships, such as sales per square foot or per customer, to assess the plausibility of the figures.

Lithgow and Harris, CPAs Are Performing the Audit of WildFlower