During an engagement, an internal auditor decided to use variance analysis as an auditing techniques. Which of the following steps should the auditor pursue if he discovers unexpected deviations of actual results from budget?
A) Report the deviations immediately to the audit committee.
B) Gather additional information to determine the cause of the deviations.
C) Conclude that the budget was unreasonably set and accept the deviations.
D) Perform alternative forms of analytical procedures which provide no deviations.

Question

Quizplus · Accepted Answer

The auditor should gather additional information to determine the cause of the deviations to understand why the actual results differ from the budgeted figures. This step is crucial for identifying any underlying issues or errors.

During an Engagement, an Internal Auditor Decided to Use Variance