Analytical procedures used in planning an audit should focus on:

Question

Quizplus · Accepted Answer

Choice "C" is correct. The purpose of applying analytical procedures in planning the audit is to assist in planning the nature, timing, and extent of auditing procedures that will be used to obtain audit evidence for specific account balances or classes of transactions. To accomplish this, the analytical procedures used in planning the audit should focus on (a) enhancing the auditor's understanding of the client's business and the transactions and events that have occurred since the last audit date, and (b) identifying areas that may represent specific risks relevant to the audit. Choice "A" is incorrect. Analytical procedures to assess the adequacy of evidence would be used in the final review stage. Choice "B" is incorrect. Testing individual account balances that depend on accounting estimates would be a substantive application of analytical procedures and would not be used in the planning stages of an audit. Choice "D" is incorrect. Analytical procedures are generally not useful in detecting material weaknesses in the client's internal control.

Analytical Procedures Used in Planning an Audit Should Focus On