Emmanuela Zhang Was Explaining the Importance of Analytical Procedures to Her

question 52

Multiple Choice

Emmanuela Zhang was explaining the importance of analytical procedures to her staff. She made two statements:
(i) Analytical procedures are conducted throughout an audit.
(ii) Analytical procedures are an efficient method for estimating account balances.

• A) both (i) and (ii)
• B) neither (i) nor (ii)
• C) (i) only
• D) (ii) only

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Definitions:

Accounting Distortions

Discrepancies that arise in financial statements due to methods of valuation, estimation errors, or misapplication of accounting principles.

Financial Ratios

Quantitative measures derived from financial statement analysis to assess a company's financial health, performance, and viability.

Conflicts of Interest

Situations where an individual's personal interests could improperly influence their professional decisions or actions.

Affiliated Companies

Companies that are connected to each other through common ownership or control.