Which of the following would not be classified as an analytical procedure?
A) benchmarking the company's profitability ratios against others in the industry
B) preparing common size financial statements
C) calculating income statement account balances as a percent of sales when the level of sales has changed from the prior year
D) reconciling fixed asset dispositions with the fixed asset ledger

Question

Quizplus · Accepted Answer

Analytical procedures involve the evaluation of financial information through analysis and comparison of relationships between financial and non-financial data. Reconciling fixed asset dispositions with the fixed asset ledger is a task that involves a substantive testing procedure to confirm the accuracy and completeness of the fixed asset records and would not be classified as an analytical procedure. Choices A, B, and C involve the use of ratio analysis or other data comparison methods and are considered analytical procedures.

Which of the Following Would Not Be Classified as an Analytical