Auditing and Assurance Services 9th Edition by Alvin Arens,Mark Beasley,Randy Elder

Exercise 10

An auditor compares the current-year revenues and expenses with those of the prior year and investigates all changes exceeding 5 percent. By this procedure, the auditor would be most likely to learn that
A) Fourth-quarter payroll taxes in the current year were not paid.
B) The entity changed its capitalization policy for small tools in the current year.
C) A current-year increase in property tax rates has not been recognized in the entity's accrual.
D) The current-year provision for uncollectible accounts is inadequate because of worsening economic conditions.