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:

Organizational Structure

The system of tasks, workflows, reporting relationships, and communication channels that link together the diverse parts of an organization.

Assembly Line

A production method where components are sequentially assembled onto a product to efficiently produce a finished item.

Specialization

A focus on a particular area of expertise within a profession, leading to increased efficiency and skill in that area.

Scientific Management

A management theory that analyzes and synthesizes workflows, aiming to improve economic efficiency, especially labor productivity.