Analytical Procedures Used in Planning an Audit Should Focus On

question 34

Multiple Choice

Analytical procedures used in planning an audit should focus on:

• A)reducing the scope of tests of controls and substantive tests.
• B)providing assurance that potential material misstatements will be identified.
• C)enhancing the auditor's understanding of the client's business.
• D)assessing the adequacy of the available evidential matter.

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Definitions:

Variance

A statistical measurement of the dispersion or spread in a set of data points, reflecting how much the numbers differ from each other and from the mean.

Probability

The measure of the likelihood that an event will occur, quantified as a number between 0 and 1, with 1 indicating certainty.

Penalties

Financial or other forms of punishment applied for violation of rules, laws, or contracts.