Analytical procedures can be very effective in detecting inventory fraud. Which of the following analytical procedures would NOT be useful in detecting fraud?
A) Gross margin percentage
B) Inventory Turnover
C) Cost of sales percentage
D) Accounts payable turnover

Question

Quizplus · Accepted Answer

Accounts payable turnover may be useful in analyzing the company's cash flow management, but it would not be useful in detecting inventory fraud. The other options, gross margin percentage, inventory turnover, and cost of sales percentage, are all useful in detecting inventory fraud as they can identify unusual fluctuations or patterns that may indicate fraudulent activity.

Analytical Procedures Can Be Very Effective in Detecting Inventory Fraud