Analytical Procedures Are Audit Methods of Evaluating Financial Statement Accounts

question 67

Multiple Choice

Analytical procedures are audit methods of evaluating financial statement accounts by studying and comparing relationships among financial and nonfinancial data. The primary purpose of analytical procedures conducted during the planning stages is to:

• A)identify the appropriate schedules to be prepared by the client.
• B)identify the types of errors or frauds that can occur in transactions.
• C)identify unusual conditions that deserve additional audit effort.
• D)determine the existence of unrecorded liabilities or overstated assets.

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Definitions:

UCC

The Uniform Commercial Code represents a detailed collection of regulations that oversee every commercial transaction within the United States.

Parol Evidence Rule

A legal rule that prevents the introduction of evidence of prior or contemporaneous oral and written statements to alter the terms of a written contract.

Parol Evidence Rule

A legal principle that prevents parties in a written contract from presenting external evidence that contradicts or adds to the written terms of the contract.

Written Contract

An agreement between parties that is recorded in a tangible form on paper or digitally, detailing the terms and conditions bound by law.