Ratio analysis,common-size analysis,and analysis of the dollar and percentage changes in each income statement item over the previous year are useful in assessing whether certain relationships make sense in light of knowledge obtained during the audit.

Question

Quizplus · Accepted Answer

Ratio analysis, common-size analysis, and analysis of dollar and percentage changes can aid auditors in evaluating relationships and identifying any potential issues in the financial statements. Therefore, the statement is true.

Ratio Analysis,common-Size Analysis,and Analysis of the Dollar and Percentage Changes