Of the Following, Which Is an Important Procedure That an Auditor

Multiple Choice

Of the following, which is an important procedure that an auditor should use when making an overall review of the income statement?

A) Obtain a schedule of the retained earnings activity for the period.
B) Compare actual revenues and expenses with the corresponding figures of the previous year and investigate significant differences.
C) Obtain, from the proper entity representative, inventory certificates for the beginning and ending inventory amounts that were used to determine cost of sales.
D) Ascertain that the net income amount in the statement of cash flows agrees with the net income amount in the income statement.