Analytical Procedures Enable the Auditor to Predict the Balance or Quantity

question 62

Multiple Choice

Analytical procedures enable the auditor to predict the balance or quantity of an item under audit. Information to develop this estimate can be obtained from all of the following except:

• A)tracing transactions through the system to determine whether procedures are being applied as prescribed.
• B)comparison of financial data with data for comparable prior periods, anticipated results (e.g., budgets and forecasts)and similar data for the industry in which the entity operates.
• C)study of the relationships of elements of financial data that would be expected to conform to a predictable pattern based upon the entity's experience.
• D)study of the relationships of financial data with relevant nonfinancial data.

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Definitions:

Positive Communications

involves interactions that are constructive, encouraging, and optimistic, fostering a beneficial and supportive environment.

Negative Communications

The exchange of information that has detrimental effects on relationships, including misunderstanding, frustration, or conflict.

Workplace

A physical or virtual location where employees engage in work activities for their employer.

Manager

A person in charge of managing or overseeing either a portion or the entirety of a business or comparable entity.