Which type of financial statement analysis is most appropriate to review for an indication of financial statement fraud?
A) Income statement vertical analysis
B) Income statement horizontal analysis
C) Balance sheet ratios
D) All of these answer choices are correct.

Question

Quizplus · Accepted Answer

All of these answer choices are correct because each type of analysis can reveal different aspects of financial statement fraud. Income statement vertical analysis can show unusual proportions in expense or revenue categories, horizontal analysis can highlight inconsistent trends over time, and balance sheet ratios can expose improbable financial conditions.

Which Type of Financial Statement Analysis Is Most Appropriate to Review