If the results of the analytical procedures are favourable, they will reduce:
A) the extent of tests of details of balances.
B) all of the other tests.
C) the tests of transactions.
D) the extent of tests of controls.

Question

Quizplus · Accepted Answer

If the results of analytical procedures are favourable, it means that the financial data is consistent with the expectations of the auditors, and there are no material misstatements. Therefore, the auditors can rely on this information to reduce the extent of tests of details of balances, which are more time-consuming and expensive than analytical procedures. However, it does not eliminate the need for other tests such as tests of transactions or tests of controls.

If the Results of the Analytical Procedures Are Favourable, They