Significant unexpected differences identified by analytical procedures will usually necessitate:
A)a review of internal control.
B)an explanation in the representation letter.
C)investigation by the auditor.
D)addition of an 'emphasis of matter' paragraph to the auditor's report.

Question

Quizplus · Accepted Answer

Significant unexpected differences identified by analytical procedures may indicate a material misstatement in the financial statements. Therefore, the auditor should investigate them to determine the cause of the differences and assess whether any adjustments to the financial statements are necessary. This investigation may involve obtaining additional audit evidence or seeking explanations from management. The other options (A, B, and D) may also be required depending on the outcome of the investigation, but the primary response should be to investigate the differences.

Significant Unexpected Differences Identified by Analytical Procedures Will Usually Necessitate