Analytical Procedures Can Only Identify Which One of the Following

- April 19, 2022

Both 1 and 3 but not 2. 1 audit planning risk assessment 2 substantive testing.

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To satisfy doubts when questions arise about a clients ability to.

. Analytical procedures designed to test the accounting records by obtaining corroborating evidential matter. Solution for Which two of the following statements regarding the use of analytical procedures of the audit are correct. Analytical procedures are conducted at the risk assessment phase of the audit to a aid in the identification of risk.

Analytical procedures designed to identify material weaknesses in internal accounting control. When testing for accuracy an auditor searches for evidence. 04 Analytical procedures are used for the following purposes.

Here the auditor develops an expectation of an account balance or financial relationship. Analytical procedures can be more effective or efﬁcient than tests of de-. Identify each of these three stages and for each stage discuss the purpose of performing analytical procedures in that stage.

Analytical procedures are used to. These procedures can indicate possible problems with the financial records of a client which can then be investigated more thoroughly. In conducting analytical procedures the following information sources are generally considered to be reliable.

Medium There are three stages of the audit in which analytical procedures are performed. Planning substantive and conclusion stages. Analytical procedures also encompass the investigation of identified fluctuations.

Analytical procedures are used by accountants in multiple levels of service and they are critical to evaluating financial data and variations that occur in financial data. Considering the adequacy of the evidence gathered in response to unexpected balances identified in planning. Developing an independent expectation helps the auditor apply professional skepticism when evaluating reported amounts.

The pre-analytical procedure is normally used to assess the reliability of data as well as to assess the possible misstatement that might contain in the financial statements. B identify where fraud has occurred. D both a and c Answer.

Analytical procedures involve comparisons of different sets of financial and operational information to see if historical relationships are. That transactions and events have been recorded at appropriate amounts d. Analytical procedures are normally used in all the three steps of audit.

B For certain immaterial accounts analytical procedures may be the only evidence needed. To verify that a recorded transaction or event took place and relates to the entity b. Thus the objective of the procedures is to identify such things as the existence of unusual transactions and events and.

Performing analytical procedures generally follows this four-step process. That all disclosures that should have been included in the financial report have been included c. Analytical procedures are one of many financial audit processes which help an auditor understands the clients business and changes in the business and to identify potential risk areas to plan other audit procedures.

C In some instances other types of evidence may be reduced when analytical procedures indicate that an account balance appears reasonable. To direct attention to potential risk areas. Analytical procedure is the process of analyzing plausible relationships among data including both financial and non-financial data.

C enhance the understanding of a client. Analytical procedures means evaluations of financial information made by a study of plausible relationships among both financial and non-financial data. Both 1 and 2 but not 3 E.

Likewise substantive analytical procedures are the audit procedures that auditors perform to obtain evidence about the reasonableness of amounts shown in the financial statements by using such plausible. A Analytical procedures are used to isolate accounts or transactions that should be investigated more extensively. In which of the following audit phases is the auditor required to perform analytical procedures.

Analytical procedures are a type of evidence used during an audit. What is the primary objective of analytical procedures used in the overall review stage of an audit. It includes comparison of financial information with 1.

To reduce specific detection risk. To assist the auditor in planning the nature timing and extent of. Reassessing the factors that assisted the auditor in deciding on preliminary materiality levels and audit risk.

To verify that recorded assets are owned by the entity. Analytical procedures are used as substantive procedures when the auditor considers that the use of analytical procedures can be more effective or efficient than tests of details in reducing the risk of material misstatements at the assertion level to an acceptably low level. Analytical procedures performed in the final review stage of an audit generally would include.

What analytical procedures can be use in the planning phase of an audit to identify significant changes in operating and financial activities of a firm over previous years arrow_forward. This procedure also uses by the auditor to gain a. Analytical procedures are an important part of the audit process and consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data.

Information generated by an accounting system that has effective internal controls. The objective for planning analytical procedures is to identify accounts with heightened risk of misstatement to provide a basis for designing and implementing responses to the assessed risks. AS 2305 discusses analytical procedures.

Analytical procedures range from simple comparisons to the use of complex models involving many relationships and elements of data. To help to corroborate the conclusions drawn from individual components of financial statements. But selecting and documenting analytical procedures are subjective processes so the area of analytical procedures is one that can cause frustration for accountants.

Also indicate in which stages analytical procedures are required by current professional auditing standards. Identify the accounts at risk of material misstatement. For planning analytical procedures significant unexpected differences suggest that the auditor will need to increase substantive procedures.

Inquiries of knowledgeable outside parties such as the clients attorneys and bankers.

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