Analytical procedures are essential for borrowings because:
A) there are few internal controls in this area which the auditor can rely upon to reduce substantive testing.
B) of the paucity of documentation in this area.
C) the large quantity of transactions would make this an expensive area to audit if some other means of reducing tests were not available.
D) tests of details for interest expense and accrued interest can frequently be eliminated when results are favourable.

Question

Quizplus · Accepted Answer

Analytical procedures can help auditors assess the reasonableness of interest expense and accrued interest, potentially reducing the need for detailed testing if the results are consistent with expectations.

Analytical Procedures Are Essential for Borrowings Because