Analytical Procedures Are Not Widely Used in the Audit of Property

question 31

Multiple Choice

Analytical procedures are not widely used in the audit of property, plant, and equipment. Which of the following is not a valid comment about the use of analytical procedures in the audit of PPE?

• A) compare the annual depreciation charge with the cost of an asset to approximate the depreciation rate
• B) a substantial asset balance variation can be caused by one or a few transactions of which the auditor is likely to already be aware
• C) comparison of repairs expense with prior years may indicate capitalisation in error
• D) None of the above is invalid.

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Definitions:

Tight Culture

Cultures or organizations characterized by rigorous rules, regulations, and expectations that govern member behavior, ensuring uniformity and conformity.

Cultural Distance

The degree to which cultural norms, values, and practices differ between two groups, societies, or countries.

Impedes Communication

refers to any barriers or obstacles that interfere with the effective exchange of ideas, messages, or information among individuals or groups.

Cultural Distance

The extent to which different cultures diverge from one another, affecting communication, management practices, and business strategies when engaging across borders.