In applying analytical procedures, the identification of the relationships and types of data used, as well as conclusions reached when recorded amounts are compared to expectations, requires:
A)judgment by the auditor.
B)participation by senior audit team members.
C)understanding of complex models.
D)advanced training in plausibility formulation.

Question

Quizplus · Accepted Answer

Analytical procedures require the auditor to exercise judgment in identifying relationships and types of data used, as well as forming conclusions when comparing recorded amounts to expectations. This is based on the auditor's understanding of the business and industry, and their assessment of the reliability and relevance of the data used. Senior audit team members may participate in the process, but the ultimate responsibility lies with the auditor. Complex models and advanced training in plausibility formulation may be helpful, but are not essential for performing analytical procedures effectively.

In Applying Analytical Procedures, the Identification of the Relationships and Types