Analytical Procedures Consist of Evaluating Financial Information by Studying Financial

question 12

Essay

Analytical procedures consist of evaluating financial information by studying financial and nonfinancial data and looking for plausible or implausible relationships.The procedures can range from making simple comparisons to using complex models involving many relationships and elements of data.They can involve time-series comparisons of recorded amounts and ratios developed from recorded amounts,and they always include comparison to expectations developed by the auditors.
Required: A)Describe the broad purposes of analytical procedures.
B)Identify the sources of information from which an auditor develops expectations.

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Definitions:

Metabolic Rate

Energy use by an organism per unit time. See basal metabolic rate (BMR).

Hibernation

Long-term torpor in response to winter cold and scarcity of food. Compare with estivation.

Basking

Basking is a behavior observed in various animals, especially reptiles, where individuals expose themselves to sunlight or another heat source to regulate body temperature.

Cancer Risk

The probability of developing cancer over a certain period, influenced by genetic factors, lifestyle choices, and environmental exposures.