An entity's income statements were misstated due to the recording of a journal entry that involved debits and credits to an unusual combination of expense and revenue accounts. The auditor most likely to detect this irregularity by ________.
A) tracing a sample of journal entries to the general ledger
B) evaluating the effectiveness of the internal control system policies and procedures
C) investigating the reconciliation of control accounts with the subsidiary records
D) performing analytical procedures designed to disclose differences between the balances in the accounts and budgeted amounts

Question

Quizplus · Accepted Answer

Performing analytical procedures can help identify unusual or unexpected relationships between financial data, such as discrepancies between actual account balances and budgeted amounts, which may indicate misstatements.

An Entity's Income Statements Were Misstated Due to the Recording