Analytical procedures performed during phase III of the audit
A) must be performed before the balance sheet date.
B) can be used as a means of planning and directing other audit tests to specific areas.
C) should be done after tests of details of balances.
D) are expensive and are therefore not frequently used by the auditor.

Question

Quizplus · Accepted Answer

Analytical procedures in phase III can help identify potential issues or areas of risk, which can then be targeted for further testing through tests of details of balances. These procedures can provide valuable direction for the rest of the audit, and can be conducted before or after the balance sheet date. While some analytical procedures may be costly, they are generally less expensive than tests of details of balances and can provide useful insights into the financial statements.

Analytical Procedures Performed During Phase III of the Audit