A simple case for applying an analytical review procedure:

One of your clients, De Anza Corporation, has a contractual commitment as a part of bond indenture to maintain current ratio of 2.0.

If the ratio falls below that level on the balance sheet date, the entire bonds become payable immediately. In the current year, the client's financial statement shows that the ratio has dropped from 2.6 to 2.05 over the past year.

Please discuss that how should this situation affect your audit plan? Please state your plan with specific audit approach /strategy /procedures.

p.s.

lately a breaking news /a flashing news in our financial market in US. that is re: volatile US Treasury Bond (10-yr and 20 yr T-bonds) interest rates acting up and down;

this is very timely discussion now, we are going through COVID 19 with 'severely-ill life-support hospitalized' financial markets around the world, especially extreme hyper-sensitive world credit markets, aka, bond market, which can be more indicative (and more significant) than capital equity market, aka, stock markets in the world.

i.e. current US 10-yr Treasury Bond rate hovering now at 1.48% and moving up above 1.5%. Also, many financial pundits say it can go above 2% or higher; which imply it might bring a jolt to US equity market (capital market) consequently, then can further reverberating into other capital markets around the world.