2.1 - Analytical Procedures in Planning the Audit

Question 1

When should analytical procedures be used?

Answer 1

At the risk assessment stage

Question 2

What are the first three possible sources of information about a client?

Answer 2

• interim financial information
• budgets
• management accounts

Question 3

What are the next three possible sources of information about a client?

Answer 3

• non-financial information
• bank and cash records
• VAT returns

Question 4

What are the last two possible sources of information about a client?

Answer 4

• board minutes
• discussions or correspondence with the client at the year end

Question 5

What else may auditors use to assess the client’s performance?

Answer 5

May also use specific industry information or general knowledge of current industry conditions

Question 6

As well as helping to determine the nature, timing and extent of other audit procedures, such analytical procedures may also indicate…

Answer 6

Aspects of the business of which the auditors were previously unaware