Analytical Procedures Are Substantive Procedures That May Be Used to Provide

question 37

Essay

Analytical procedures are substantive procedures that may be used to provide evidence about specific accounts and classes of transactions.
a.Describe three major types of comparisons the auditor might make in performing analytical procedures.
b.At what stages of the audit are analytical procedures performed and what purpose do they serve at each stage?

---

Definitions:

Income Elasticity

A measure of how the demand for a good or service changes in response to changes in consumer income, indicating whether a good is a necessity or a luxury.

Purchase of Toys

Refers to the consumer action of buying toys, which involves the transaction and the amount spent on toys in a specific period.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, inversely related to the economic well-being of consumers.

College Tuition

The fee that students pay to attend a college or university, covering costs such as instruction, facilities, and sometimes room and board.