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:

Equally Likely

A term used in probability to denote outcomes that have the same chance of occurring.

Continuous Probability Distributions

Mathematical functions that represent the probabilities of all possible continuous outcomes for a random variable.

Bernoulli Distribution

A probability distribution of a random variable that takes the value 1 with probability 'p' and the value 0 with probability '1-p'.

Pareto Distribution

A probability distribution used to describe phenomena in the natural and social sciences where a small proportion of occurrences leads to a large proportion of outcomes.