An indicator that the auditor might need to adopt extended audit procedures would be best evidenced by __________.
A)an unusual fluctuation in gross profit margin last year
B)net sales is increasing approximately 3% per year
C)a new competitor has entered the client's industry
D)the client's current ratio has decreased slightly

Question

Quizplus · Accepted Answer

An unusual fluctuation in gross profit margin last year could indicate the need for extended audit procedures because it suggests a potential material misstatement in the financial statements. The other options do not provide clear indications of a need for extended audit procedures.

An Indicator That the Auditor Might Need to Adopt Extended