Problem

An auditor compares the current-year revenues and expenses with those of the prior year an...

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.

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