Question

Following are the auditor’s calculation of two key ratios for Audisys Corporation for the current year, previous year, and the percentage change. The primary purpose of this information is to direct the auditor’s attention to areas requiring greater audit effort.

Ratio	Current	Previous	%
Quick Ratio	1.32	1.50	12.00-
No. of Days sales in accounts receivables	53.24	47.53	12.01

Required:

1. State whether there is a need to investigate the results further and, if so, the reason for further investigation.

2. State the areas/accounts that would require special emphasis in the audit investigation.

3. What additional tests would be done as part of the investigation?

Answer 1