Which of the following would be considered an analytical procedure?
A)Testing purchasing, shipping, and receiving cutoff activities.
B)Comparing inventory balances to recent sales activities.
C)Projecting the deviation rate of a statistical sample to the population.
D)Reconciling physical counts to perpetual records and general ledger balances.

Question

Quizplus · Accepted Answer

Analytical procedures involve analyzing relationships between financial and non-financial data to identify significant fluctuations or unusual items. Comparing inventory balances to recent sales activities would be considered an analytical procedure as it involves analyzing the relationship between two financial data points. The other options involve testing controls (A), statistical sampling (C), and reconciling inventory (D), which are not considered analytical procedures.

Which of the Following Would Be Considered an Analytical Procedure