An auditor discovered that a client's accounts receivable turnover is substantially lower for the current year than for the prior year. This may indicate that:
a. The aging of accounts receivable was improperly performed in both years.
b. Obsolete inventory has not yet been reduced to fair market value.
c. An unusually large receivable was written off near the end of the year.
d. There was an improper cutoff of sales at the end of the year.
答案：D
Explanation
Choice "d" is correct. Accounts receivable turnover is calculated as sales / average net receivables. A decline in this ratio may indicate that there was an improper cutoff of sales at the end of the year. For example, if sales made at the beginning of the subsequent year were inadvertently recorded in the current year, both sales and receivables would be overstated by the same amount. This would generally result in a larger proportionate effect on receivables (since the receivables balance is smaller than sales for the year), and an overall decrease in the ratio.
Choice "b" is incorrect. Failure to write down obsolete inventory would not affect sales or receivables, and so would have no effect on accounts receivable turnover.
Choice "c" is incorrect. Write-off of an unusually large receivable would reduce the receivables balance without affecting sales. This in turn would cause an increase in accounts receivable turnover.
Choice "a" is incorrect. The aging of accounts receivable does not affect the overall receivable balance, and therefore would have no effect on accounts receivable turnover.
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