When Applying Analytical Procedures During an Audit, Which of the Following

question 20

Multiple Choice

When applying analytical procedures during an audit, which of the following is the best approach for developing expectations?

• A)Considering unaudited account balances and ratios to calculate what adjusted balances should be.
• B)Identifying reasonable explanations for unexpected differences before talking to client management.
• C)Considering the pattern of several unusual changes without trying to explain what caused them.
• D)Comparing client data with client-determined expected results to reduce detailed tests of account balances.

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Definitions:

Division Of Labor

The allocation of distinct tasks to different people or groups in a social or economic context to increase productivity.

Interlocking Directorate

Organizational linkages created when the same people sit on the boards of directors of a number of different corporations.

Power Elite Perspective

A view that a small group of people, drawn from the political, corporate, and military sectors, holds the majority of power within a society.

Social Structure

The organized pattern of social relationships and social institutions that together constitute society.