Question: Analytical Procedures Question 2 - Analytical procedure a. Define analytical procedures and give the basic premise of using them. (1 mark) b. You are provided

Analytical Procedures

Question 2 - Analytical procedure a. Define analytical procedures and give the basic premise of using them. (1 mark) b. You are provided the following ratios for an audit client Ratios 2014 2013 Gross Margin 18% 18% 2 Operating Margin 10% 7% 3 Current 3.2:1 1.4:1 Quick 2.6:1 0.8:1 5 Inventory days 63 58 6 Receivable days 61 48 7 Purchases days 25 69 Required: Identify the major conclusions that can be drawn from the above information about the company's performance in 2014 (Tip - Do not simply state the percentage change or lack of change, but rather what it could mean). (14 marks) C. Describe the FIVE types of analytical procedures

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