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Analytical Procedures. What Is the Purpose of Using Analytical Review Procedures in Procedures

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Analytical procedures.
What is the purpose of using analytical review procedures in the final review stages of the audit?


Definitions:

Accounting Rate of Return

A financial ratio that measures the profitability of an investment by dividing the average annual profit by the initial investment cost.

Weighted Average Cost of Capital

The average rate of return a company is expected to pay its security holders to finance its assets, weighted by the type of capital.

Modified Internal Rate of Return (MIRR)

A financial metric that accounts for the cost of capital and reinvestment of cash flows to provide a better measure of a project's profitability than the traditional IRR.

Net Present Value (NPV)

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

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