When performing preliminary analytical procedures related to long-lived assets, which of the following should the auditor compare the unaudited financial statements with?
A) Past results.
B) Industry trends.
C) Future company projections.
D) Both A and B.

Question

Quizplus · Accepted Answer

When performing preliminary analytical procedures related to long-lived assets, the auditor should compare the unaudited financial statements with past results and industry trends. This will help the auditor to identify any unusual fluctuations in the financial statements and assess the reasonableness of the amounts recorded for long-lived assets. Future company projections are not relevant to the preliminary analytical procedures as they are based on assumptions and estimates that may not be accurate. Therefore, both A and B are the best choices for comparing the unaudited financial statements with.

When Performing Preliminary Analytical Procedures Related to Long-Lived Assets, Which