Audit Manual Chapter 5 2025/2026 Exam
Questions and Answers | A+ Score
Assured
Analytical Procedures - 🧠 ANSWER ✔✔Evaluations of financial information
through analysis of plausible relationships among both financial and nonfinancial
data (per AU-C 520).
Analytical procedures can also encompass: - 🧠 ANSWER ✔✔Such investigation,
as necessary, of identified fluctuations or inconsistent relationships that differ from
the expected values by a significant amount.
Some examples of analytical procedures could include: - 🧠 ANSWER ✔✔1.
Comparing current financial information to prior year data.
2. Comparing an entity's budget to its actual results.
, 3. Looking through a ledger for unusual transactions.
Planning objectives of analytical procedures (2): - 🧠 ANSWER ✔✔1. To assess
risks of material misstatement.
2. Gain familiarity with the entity's financial data.
Fieldwork objective of analytical procedures: - 🧠 ANSWER ✔✔To obtain relevant
and reliable audit evidence.
Completion objectives of analytical procedures (2): - 🧠 ANSWER ✔✔1. To assist
in forming an overall conclusion about the financial statements.
2. Detect 11th hour issues.
The effectiveness of analytics will depend on (4): - 🧠 ANSWER ✔✔1. Suitability
based on the nature of the assertion (risks).
2. Availability of reliable data.
3. Predictability of the relationships between the data in developing an expectation.
4. Precision of the expectation.
Some potentially high risk areas in Fieldwork include (3): - 🧠 ANSWER ✔✔1.
Transfers.
Questions and Answers | A+ Score
Assured
Analytical Procedures - 🧠 ANSWER ✔✔Evaluations of financial information
through analysis of plausible relationships among both financial and nonfinancial
data (per AU-C 520).
Analytical procedures can also encompass: - 🧠 ANSWER ✔✔Such investigation,
as necessary, of identified fluctuations or inconsistent relationships that differ from
the expected values by a significant amount.
Some examples of analytical procedures could include: - 🧠 ANSWER ✔✔1.
Comparing current financial information to prior year data.
2. Comparing an entity's budget to its actual results.
, 3. Looking through a ledger for unusual transactions.
Planning objectives of analytical procedures (2): - 🧠 ANSWER ✔✔1. To assess
risks of material misstatement.
2. Gain familiarity with the entity's financial data.
Fieldwork objective of analytical procedures: - 🧠 ANSWER ✔✔To obtain relevant
and reliable audit evidence.
Completion objectives of analytical procedures (2): - 🧠 ANSWER ✔✔1. To assist
in forming an overall conclusion about the financial statements.
2. Detect 11th hour issues.
The effectiveness of analytics will depend on (4): - 🧠 ANSWER ✔✔1. Suitability
based on the nature of the assertion (risks).
2. Availability of reliable data.
3. Predictability of the relationships between the data in developing an expectation.
4. Precision of the expectation.
Some potentially high risk areas in Fieldwork include (3): - 🧠 ANSWER ✔✔1.
Transfers.
