Analytical Procedures

Question 1

What is the objective of using analytical procedures in the planning stage of an audit?

Answer 1

Increase the auditor’s understanding of the client and identify unusual relationships among the data

Question 2

What is the purpose of using analytical procedures in the final review stage of an audit?

Answer 2

To assess the validity of the conclusions reached

Question 3

What is the purpose of using analytical procedures as a substantive test?

Answer 3

To accumulate data that assess the validity of specific account balance assertions

Question 4

When using analytical procedures to accumulate evidence, what kind of test is being used?

Answer 4

Substantive

Question 5

What are analytical procedures based on?

Answer 5

Expectations

Question 6

How do you calculate inventory turnover?

Answer 6

COGS/Average Inventory

Question 7

What are three considerations in the overall review stage of an audit?

Answer 7

1) Evidence accumulated