Analytical procedures are undertaken to
A) analyze the audit client's profitability.
B) assess the going concern status of the audit client.
C) identify fluctuations in accounts inconsistent with the auditor's expectations.
D) identify non-compliance with internal control procedures.

Question

Quizplus · Accepted Answer

Analytical procedures are used to identify fluctuations in accounts that are not consistent with the auditor's expectations. This helps the auditor to identify areas of risk and potential misstatements, which are then further examined during the audit. While analytical procedures may be used to gather information about profitability and going concern status, their primary purpose is to identify unexpected changes in account balances. Analytical procedures are not used to identify non-compliance with internal control procedures as this is typically done through tests of controls.

Analytical Procedures Are Undertaken to