Question: Reply to the following questions relating to analytical procedures a

Reply to the following questions relating to analytical procedures.
a. Performing analytical procedures may help an auditor to:
(1) Achieve audit objectives related to a particular assertion.
(2) Develop an effective system of quality control.
(3) Meet PCAOB requirements that analytical procedures be performed relating to every major account.
(4) Increase the level of detection risk.

b. Analytical procedures performed near the end of the audit to assist the auditor in forming an overall conclusion on the financial statements are aimed primarily at:
(1) Gathering evidence concerning account balances that have not changed from the prior year.
(2) Retesting internal control procedures.
(3) Considering unusual or unexpected account balances that were not previously identified.
(4) Performing a test of transactions to corroborate management’s financial statement assertions.

c. What type of analytical procedure would an auditor most likely use in developing relationships among balance sheet accounts?
(1) Trend analysis.
(2) A detailed test of balance analysis.
(3) Ratio analysis.
(4) Risk analysis.

d. The cost of analytical procedures in terms of time needed to perform, when compared to other tests, is ordinarily considered:
(1) Low.
(2) High.
(3) Identical.
(4) Indeterminate.

e. In developing an expectation for analytical procedures, the auditors are least likely to consider:
(1) Financial information for comparable prior periods.
(2) Relationships between financial information and relevant nonfinancial data.
(3) Anticipated costs of audit completion.
(4) Relationships among elements of financial information within a period.

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