Answered: Analytical procedures are often…

Analytical procedures are often performed on accounting ratios. Discuss the usefulness of analytical procedures applied at the final review stage of an audit.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, Assessing, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 17RQSC

See similar textbooks

Related questions

Q: Which of the following best describes audit data analytics?

A: Audit data analysis refers to examining and evaluating large sets of data in the context of an…

Q: Analytical procedures consist of evaluating financial information by studying financial and…

Q: Why are audit objectives important in planning and performing an audit? Is it possible for audit…

A: Why are audit objectives important in planning and performing an audit? Audit objectives are the…

Q: What procedures do auditors perform to identify subsequent events?

A: Subsequent Event: Subsequent events refer to those events that take place after the preparation of…

Q: What are the main reasons for an audit, and what actions result in an audit being conducted?

A: 1. Compliance with laws and regulations: Audits are conducted in order to ensure that an…

Q: An audit trail is a step-by-step record by which accounting data can be traced to its source.…

A: Vouching refers to checking the business transactions with their respective source documents.

Q: Once the overall audit strategy has been established, what can be developed to address the various…

A: Audit strategy is prepared by the auditor which helps in planning the audit. It includes the time…

Q: What is an example of audit procedure when performing an accounts payable risk assessment for…

A: Auditing of Accounts Payable Accounts Payable is considered to be one of the important part in the…

Q: After the financial statements are issued, auditors finish the substantive procedures. Identify the…

A: Introduction: Substantive processes must be carried out after the date of financial statements.

Q: What are the different types of analytical procedures? Describe how they may be utilized in an audit…

A: Analytical methods : Analytical processes are the techniques used by auditors to analyze the…

Q: Which of the following types of audit evidence generally is the most reliable

A: Answer: Option B.

Q: Assume that an auditor has identified a number of CAMs. A. what are CAMs? b. For each CAMs, what…

A: A CAM or Critical Audit Matter is a new concept in auditing introduced in 2017. It refers to…

Q: When auditing the accounts payable balance on the balance sheet, an auditor’s procedures most likely…

A: Auditing is the inspection of the financial records of the company or organisations with no bias and…

Q: In the context of financial reporting, define the idea of materiality. What is the difference…

A: Financial Statement Importance:- In financial statements, materiality refers to the effect of…

Q: How does an audit team use materiality on an audit engagement?

A: Rule of thumb and professional judgement are being relied by an auditor to determine materiality.…

Q: How do auditors audit accounting estimates and other subjective information?

A: Accounting estimate is referred to as the recognition or measurement of an account, transaction,…

Q: What are the purposes of preliminary analytical procedures and how does it differ from the…

A: Lets understand the basics. Auditor is responsible for making a correct opinion regarding the…

Q: A system that traces the detailed transactions relating to any item in an accounting record could be…

A: Audit trails is a process which has the recording of all the trade related, accounting and all othe…

Q: What substantive analytical procedures might an auditor use to perform an analytical procedure for…

A: The accounts payable liability account in the company's financial statements represents the sum of…

Q: In determining whether transactions were really exist, the direction of the audit testing should be…

A: In determining whether transactions were really exist, the direction of the audit testing should be…

Q: What is the term used to describe a systematic process of objectively obtaining evidence regarding…

A: Auditing is a systematic process that helps in providing a true and fair picture of the financial…

Q: Accounting How do the qualitative characteristics apply to accounting standard setting, standards’…

A: Answer:- Accounting meaning:- The act of recording a business's financial transactions is generally…

Q: Analytical procedures can be used in which of the following ways?a. As a means of overall review…

Q: Discuss the importance and extent to which analytical review can be relied on in supporting an audit…

A: In auditing, an logical review is the evaluation and comparison of fiscal data to determine the…

Q: What are analytical procedures? Describe how they can be used as substantive tests in an audit

A: Analytical procedures are the procedure used by auditor at planning and execution stage to analysis…

Q: Consider the concepts of sufficient and appropriate audit evidence. Assess how audit risk relates to…

A: It is responsibility of an auditor to express his opinion on Reliability of financial statements. An…

Q: Which of the following plays an important role in all field audits? Adjustments. Verification of…

A: Field auditing is like a real-world investigation of financial or operational records. It's when…

Q: Analytical procedures are generally used to produce evidence froma. Confirmations mailed directly to…

Q: Explain how analytical procedures are useful in: (1) The risk assessment stage of the audit. (2) The…

A: As per standards on auditing (SA) 520 “Analytical Procedures“, The term “analytical procedures” mean…

Q: During the planning phase of an audit client, Ana Alitick (auditor) utilises analytical procedures.…

A: 4-Categories of financial ratios a- Gross profit ratio-given gross profit to sales ratio, gross…

Question

Analytical procedures are often performed on accounting ratios. Discuss the usefulness of
analytical procedures applied at the final review stage of an audit.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Please outline the audit process, concentrating on the notion of materiality in the audit plan, financial ratio interpretation, and audit evidence documentation and sampling?
Please discuss the audit process focusing on the concept of materiality in the audit plan, interpretation of financial ratios, as well as documentation and sampling in respect of audit evidence?
Question Discuss the objective of analytical procedures used in the overall review stage of the audit.
Please explain the audit process in detail, paying particular attention to the audit plan's notion of materiality, the interpretation of financial ratios, as well as documentation and sampling in relation to audit evidence.
1. Please explain how to Evaluate the Data Reliability When Developing Expectations. The data an auditor will use to develop expectations in the acquisition and payment cycle has been deemed reliable by the audit staff. 2. Please Discuss the likely factors the audit team will consider when making this determination.
What is the purpose of performing preliminary analytical procedures in audit planning?
What are analytical procedures? Describe how they can be used assubstantive tests in an audit.
The auditing assesses the reliability and sufficiency of the information through _____________ a. Comparison b. Testing c. Evaluation d. Judgement
You have been asked by the audit manager to undertake preliminary analytical procedures.a) Identify the sources of information from which an auditor develops expectations.b) Describe the factors that influence an auditor’s consideration of the reliability of data for purposes of achieving audit objectives.
In which stage of audit the audit program will be created ? a. Fieldwork b. Reporting c. Planning d. Followup
what information do we need for analytical procedure in auditing?
The auditor's assessment of the reliability and sufficiency of the information contained in the underlying accounting records is a part of ______________ a. Audit Test b. Comparison c. Evaluation d. Judgement