Which of the following is the least effective way to compare financial statements from one period to the next when searching for anomalies?
A) Comparing account balances in the statements from one period to the next
B) Calculating key ratios and comparing them from one period to the next
C) Performing horizontal analysis
D) Performing vertical analysis

Question

Quizplus · Accepted Answer

A: Answer: 'A' is correct. Assessing levels of change by comparing account balances is least effective in identifying anomalies because financial statement numbers are often large and difficult to compare. The methods mentioned in answers 'b', 'c', and 'd' are incorrect because each provide a more effective way to identify anomalies in the financial statements.

Which of the Following Is the Least Effective Way to Compare