Analytical procedures are conducted during the risk assessment phase of the audit to ________.
A)highlight normal fluctuations in accounts
B)aid in the elimination of risk
C)identify accounts at risk of material misstatement
D)complete the audit work

Question

Quizplus · Accepted Answer

Analytical procedures are used to identify accounts that may have a higher risk of material misstatement. These procedures involve analyzing trends and relationships in financial data to identify potential fluctuations or abnormalities. This helps the auditor in identifying areas of the financial statements where additional audit procedures may need to be performed to reduce the risk of material misstatement. Analytical procedures are an important component of the risk assessment phase of the audit.

Analytical Procedures Are Conducted During the Risk Assessment Phase of the Audit