Auditors try to identify predictable relationships when using analytical procedures. Relationships involving transactions from which of the following accounts most likely would yield the highest level of evidence?
A)Accounts receivable
B)Interest expense
C)Accounts payable
D)Travel and entertainment expense

Question

Quizplus · Accepted Answer

Interest expense is typically based on fixed agreements or contracts (e.g., loan agreements), making it more predictable and thus providing a higher level of evidence when auditors use analytical procedures to assess the reasonableness of the amounts recorded.

Auditors Try to Identify Predictable Relationships When Using Analytical Procedures