Auditors can assess the adequacy of their client's closing procedures by:
A) Checking the accuracy of accrual calculations around year-end.
B) Looking at earnings trends to assess whether reported income is in line with similar periods in prior years.
C) a and b.
D) None of the above.

Question

Quizplus · Accepted Answer

By checking the accuracy of accrual calculations around year-end, auditors can determine if the client is properly accounting for expenses and revenues in the correct period. Looking at earnings trends can help auditors determine if reported income is consistent with prior years and if there are any unusual fluctuations that may indicate errors in the closing procedures. Therefore, options A and B are both correct in assessing the adequacy of closing procedures.

Auditors Can Assess the Adequacy of Their Client's Closing Procedures