The application of analytical procedures to inventories is not used very extensively since
each company has its own inventory policies and procedures which make industry
comparison somewhat useless.

Question

Quizplus · Accepted Answer

Analytical procedures are applied to inventories in the audit process to assess the reasonableness of inventory balances, regardless of a company's specific policies and procedures. These analyses can include comparisons to industry averages, historical inventory levels, and turnover ratios, among others, to identify any unusual or unexpected balances that might warrant further investigation.

The Application of Analytical Procedures to Inventories Is Not Used