Emmanuela Zhang was explaining the importance of analytical procedures to her staff. She made two statements:
(i) Analytical procedures are conducted throughout an audit.
(ii) Analytical procedures are an efficient method for estimating account balances.
A) Both statements are correct.
B) Neither statement is correct.
C) Only statement (i) is correct.
D) Only statement (ii) is correct.

Question

Quizplus · Accepted Answer

Both statements are correct. Analytical procedures are used throughout an audit to identify potential risks and material misstatements, as well as to obtain evidence about account balances and transactions. They are also an efficient method for estimating account balances, which can help auditors to identify unusual fluctuations or patterns in financial data.

Emmanuela Zhang Was Explaining the Importance of Analytical Procedures to Her