Filip, a new accountant for the internal audit team at Wofford, relayed that his previous employer used percentages of line items in financial statement analysis as one method to review for potential fraud. What kind of analysis is Filip suggesting?
A) Non-behavioral
B) Behavioral
C) Horizontal
D) Vertical

Question

Quizplus · Accepted Answer

Vertical analysis is the method where each line item in a financial statement is listed as a percentage of another item, typically used to analyze relationships and trends over time within the financial statements. This method can help in identifying potential fraud by highlighting inconsistencies or unusual changes in financial relationships.

Filip, a New Accountant for the Internal Audit Team at Wofford