Analytical procedures are required _______.

Question

Quizplus · Accepted Answer

Analytical procedures are required as part of risk assessment in order to assess the risk of material misstatement in financial statements. These procedures involve the analysis of financial data using various techniques and ratios to identify unusual or unexpected trends, ratios or relationships. This helps the auditor to identify areas of potential risk and plan their audit procedures accordingly. Although management and internal auditors may also use analytical procedures, they are not specifically required to do so. Likewise, analytical procedures are not designed to eliminate risk, but rather to identify and assess it.

Analytical Procedures Are Required _______