Analytical procedures are conducted at the risk assessment phase of the audit to
A) aid in the identification of risk.
B) identify where fraud has occurred.
C) enhance the understanding of a client.
D) both a and c

Question

Quizplus · Accepted Answer

Analytical procedures are used in the risk assessment phase to aid in the identification of risk by identifying unexpected relationships or fluctuations in account balances. They also enhance the auditor's understanding of the client by identifying areas that may require further investigation during the audit. Analytical procedures alone cannot detect fraud, but they can assist in identifying areas that may be at a higher risk for fraudulent activities. Therefore, option D, which states that analytical procedures helps in identifying risks and enhancing the understanding of the client, is the best choice.

Analytical Procedures Are Conducted at the Risk Assessment Phase of the Audit