The Auditor Performs Analytical Procedures to

question 130

Multiple Choice

The auditor performs analytical procedures to

• A)increase his understanding of the accounting system
• B)identify expected changes between his expectations for the current year and the prior year
• C)identify areas where he believes the risk of material misstatement might not be present
• D)satisfy the requirement of the auditing standards to use analytical procedures during the planning stage

Adjust and analyze the impact on the cash cycle due to operational changes.

Calculate the inventory period based on sales and cost of goods sold data.

Understand the relationships and differences between inventory, receivables, and payables turnover rates on the operating cycle.

Assess the effects of changes in periods of receivables, inventory, and payables on the cash cycle.

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