Why Is the Predominantly Substantive Approach Used for Most Entities

question 13

Essay

Why is the predominantly substantive approach used for most entities in the audit of investment balances? Why is it rarely possible to obtain much evidence from analytical procedures in the audit of investment balances?

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Definitions:

Correlations

A measure that indicates the extent to which two or more variables fluctuate together.

Relationship

A connection, association, or involvement between individuals or entities based on emotions, business, or other forms of interaction.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values, indicating how spread out the data points are from the mean.

Normally Distributed

A statistical term describing a bell-shaped distribution of data, where most values cluster around a central mean and probabilities for values taper off symmetrically towards the extremes.