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) both a and b
D) none of the above

Question

Quizplus · Accepted Answer

Checking the accuracy of accrual calculations around year-end is important to ensure that all expenses and revenues related to the fiscal year have been recorded. Looking at earnings trends to assess whether reported income is in line with similar periods in prior years can help auditors identify any unusual fluctuations that may indicate inadequate closing procedures. Therefore, options A and B are both important to assessing the adequacy of closing procedures.

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