[brenda_inabox]

Can someone help me understand the audit ratios?

I always seem to get them wrong in the SIMS and MCQ. I know formulas but I’m struggling understand the relationships.

Thanks!

[Anonymous]

Bump. I'm interested too.

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[Amortized and Energized]

Which ratios in particular?

FAR - Aug 2015 (58), Feb 2016 (81)
u
BEC - May 2016 (79)
AUD - Jul 2016
REG - Aug 2016

[Anonymous]

I guess the ones I need to know. Lol

AR Turnover. When AR straightens policies?

How can I better understand the ratios?

[Amortized and Energized]

You want to understand what the ratios represent? Or you want to know how to calculate them? What study material are you using? I don't know about others, but I know Becker has a page at the end of one of the chapters that lays out out to calculate all the ratios. For AR Turnover it is your credit sales/average AR for a given period. It's a measurement of how efficiently a company collects its outstanding AR. Normally you can find how to interpret the ratios on finance sites or others like investopedia and the like.

I'm not following “when AR straightens out policies”.

FAR - Aug 2015 (58), Feb 2016 (81)
u
BEC - May 2016 (79)
AUD - Jul 2016
REG - Aug 2016

[Anonymous]

Is there an easier way to under the relationships between Control Risk, Inherent Risk, and Detection Risk? I find that I get confused with which one causes the other one to increase or decrease. Hopefully, this makes sense. If not, I understand LOL.

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[NeedsA75]

BUMP….can anyone shed light on how well we actually need to know these ratios? I studied the appendix in the Becker text but I thought ratios were covered more on BEC (same with COSO)…

Anyways, it seems they focus on working capital and turnover ratios in AUD. Do I really need to know financial leverage, times interest earned, and some of the other more obscure ratios that were covered in BEC?

I've heard they like to put ratios in the SIMS? Any truth to that?

I also studied AJE's in the Becker appendix…seems pretty straight forward. I'm planning on seeing these in the SIMS as well although I would imagine they should be watered down considering we are talking about the AUD exam and not FAR..

[Author]

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