Posted by **Nick** on Sunday, December 11, 2011 at 9:06am.

I need help with this. I was presented with this question: Analytical procedures show that inventory turnover decreased from 31–34 days to 27 days, and gross margins declined to the lowest level in five years. What might this indicate about the risk of misstatement with respect to inventory and inventory purchases?

I think that the risk of misstatement would be high. The company is at risk of being in a financial crises. The gross margins fell from 20.1% to 18.0% in the five years which would indicate that the inventory is having problems. But I am not so sure if this is right. Can someone please let me know if I am correct?

## Answer This Question

## Related Questions

- Finance Accounting - Vanity Press, Inc., has annual credit sales of $1.6 million...
- accounting - using the following information, calculate inventory turnover ratio...
- Account -2 - Based on the financial statements for Jackson Enterprises (income ...
- accounting - Based on the financial statements for Jackson Enterprises (income ...
- college - 1)The credit terms 2/10, n/30 are interpreted as? 2% cash discount if...
- Math - Joe Ponzio, a financial advisor who bases his investigating strategies on...
- 6th grade math - the water level of a river is 50 feet. After one day,the water ...
- 6th grade math - the water level of a river is 50 feet. After one day,the water ...
- Retail Math - The buyer of women's gloves currently has an average inventory of...
- maths - please help!! i have obtained the equation of the regression line for a ...

More Related Questions