Nicholas has the task of reviewing the evidence from analytical procedures conducted by the audit assistants on
Nicholas has the task of reviewing the evidence from analytical procedures conducted by the audit assistants on the audit of Tumbleweed Holdings. The audit assistants have reported the results of these analytical procedures.
1. Comparison of depreciation expense with the closing balance of each depreciable asset class in property, plant and equipment.
2. Recalculation of sales commission expenses using the standard sales commission rate and total sales.
3. Comparison of payroll expense with previous year payroll.
(a) What questions would Nicholas ask about each analytical procedure?
(b) If all questions could be answered satisfactorily, explain whether the evidence from each analytical procedure would be persuasive, corroborative, minimal or general. What are the implications of this judgement for further substantive testing?
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