Which of the following procedures is the least useful analytical procedure to indicate that further audit work needs to be performed before rendering the audit opinion?
A)Developing a common-size analysis.
B)Analyzing the dollar and percentage changes in each income statement item over the previous year.
C)Comparing current earnings per share with earnings per share of the client's primary competitor.
D)Developing a ratio analysis.

Question

Quizplus · Accepted Answer

Comparing current earnings per share (EPS) with the EPS of a client's primary competitor is less useful for an auditor than the other options because it involves external comparisons that may not directly relate to the accuracy or integrity of the financial statements being audited. The other options (A, B, D) involve internal analyses that are more directly related to understanding and verifying the financial statements of the entity being audited.

Which of the Following Procedures Is the Least Useful Analytical