For an auditor to make the decision about whether a change noted in analytical procedures is unreasonable he needs
A)knowledge of the client's inventory
B)knowledge of current political conditions
C)knowledge of current economic conditions
D)an understanding of the client's competitors
E)an understanding of the business under audit
F)both A and C
G)both B and D
H)Both C and E

Question

Quizplus · Accepted Answer

To make informed decisions about the reasonableness of changes noted in analytical procedures, an auditor needs knowledge of current economic conditions (C) and an understanding of the business under audit (E). Economic conditions can significantly impact a business's performance, and understanding the specific business helps the auditor contextualize financial data within the industry and operational environment.

For an Auditor to Make the Decision About Whether a Change