The Purpose of Using Analytical Procedures in Auditing Is To

question 29

Multiple Choice

The purpose of using analytical procedures in auditing is to:

• A) identify inefficiencies in operations.
• B) test internal controls.
• C) identify unexpected fluctuations and relationships.
• D) none of the above.

---

Definitions:

Business Risk

The exposure a company or investor faces due to uncertainties in profits or dangers in its industry or economy.

Equity Risk

The risk of loss due to a drop in the value of stocks or equity securities.

Operating Activities

Activities directly related to the day-to-day operations of a business, such as sales, purchasing inventory, and paying salaries.

Static Theory of Capital Structure

A concept in corporate finance that suggests a firm can find an optimal capital structure, balancing the benefits and costs of debt and equity financing.