Which of the following statements is correct regarding the predictability of analytical procedures in a financial statement audit?
a. Relationships involving only balance sheet accounts tend to be more predictable than relationships involving income statement accounts.
b. Relationships involving income statement accounts tend to be more predictable than relationships involving only balance sheet accounts.
c. Relationships involving transactions subject to management discretion tend to be more predictable than automated transactions.
d. Relationships in a dynamic environment tend to be more predictable than relationships in a stable environment.
Answer: B
CPA Exam
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