Like tests of controls, analytical procedures only indicate the likelihood of misstatements affecting the dollar value of the financial statements.

Question

Quizplus · Accepted Answer

Analytical procedures involve analyzing relationships and trends in financial data to assess the reasonability and accuracy of financial statements. They can provide indications of potential misstatements, but do not provide conclusive evidence of their existence or dollar value. Therefore, they only indicate the likelihood of misstatements affecting the dollar value of financial statements.

Like Tests of Controls, Analytical Procedures Only Indicate the Likelihood