Which of the following is accurate regarding the comparison of client data?
A)Since budgets are only projections,auditors can ignore the differences between budgeted and actual results.
B)One approach to overcome the limitations of industry averages is to compare the client to one or more benchmark firms in the industry.
C)It is impractical to relate one account balance to another balance sheet or income statement account.
D)it is extremely difficult to get industry data for comparative purposes.

Question

Quizplus · Accepted Answer

Comparing a client to a benchmark firm(s) in the industry can provide more relevant and accurate insights than relying solely on industry averages. This approach takes into consideration the specific characteristics and circumstances of the client and the benchmark firm(s). The other options are incorrect. Auditors should not ignore the differences between budgeted and actual results as this can affect the audit opinion. Relating one account balance to another is a common practice in financial analysis. While it may be challenging to obtain industry data, it is not impossible and there are various sources that provide such data.

Which of the Following Is Accurate Regarding the Comparison of Client