Question

Assume that an auditor wishes to use analytical procedures as a substantive procedure. Indicate how substantive analytical procedures could be used in assisting the auditor in testing the following accounts:
a. Interest expense related to bonds outstanding.
b. Natural gas expense for a public utility company.
c. Supplies expense for a factory.
d. Cost of goods sold for a fast-food franchisor (for example, Wendy's or McDonald's). Note that cost of goods sold tends to average about 35% of sales in fast food franchises.
e. Salary expense for an office (region) of a professional services firm.



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  • CreatedSeptember 22, 2014
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