Analytical procedures are referred to as 'attention-direction' when they highlight:
A) areas that need more detailed procedures.
B) errors.
C) irregularities.
D) areas of improvement.

Question

Quizplus · Accepted Answer

Analytical procedures are used to evaluate financial information and identify any unusual fluctuations or trends, which can then guide auditors to areas that need more thorough examination. Therefore, analytical procedures are referred to as 'attention-direction' because they draw the auditor's attention to potential areas of concern that may require additional audit procedures. Options B, C, and D are all examples of issues that may be identified during the audit as a result of using analytical procedures, but they do not directly relate to the purpose of analytical procedures as attention-directing tools.

Analytical Procedures Are Referred to as 'Attention-Direction' When They Highlight