Detect using horizontal analysis


If skimming has been in practice for years in a business, why might it be hard to detect using horizontal analysis?

a. Comparing a year in which receipts have been skimmed to other years in which receipts have been skimmed will usually not reveal differences

b. Horizontal analysis is typically performed in industries that have high skimming rates

c. Gross margins for the industry typically will not reveal any fraud when evaluated via horizontal analysis

d. Skimming typically is revealed on the income statement and horizontal analysis is only done on balance sheet accounts

e. None of the above.

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Accounting Basics: Detect using horizontal analysis
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