PRINCIPLES OF AUDITING AND OTHER
ASSURANCE SERVICES COMPLETE STUDY
GUIDE 2026
◉ . Which of the following is true about analytical procedures?
A. Performing analytical procedures results in the most reliable form
of evidence.
B. Analytical procedures are tests of controls used to evaluate the
quality of a client's internal control.
C. Analytical procedures are used for planning, but they should not
be used to obtain evidence as to the reasonableness of specific
account balances.
D. Analytical procedures are used in planning, as a substantive
procedure for specific accounts, and in the final review of the
audited financial statements. Answer: D
◉ 38. Which of the following is a basic approach often used by
auditors to evaluate the reasonableness of accounting estimates?
A. Confirmation.
B. Observation.
C. Reviewing subsequent events or transactions.
D. Analyzing corporate organizational structure. Answer: C
,◉ 39. An auditor is performing an analytical procedure that involves
comparing a client's account balances over time. This technique is
referred to as:
A. Vertical analysis.
B. Horizontal analysis.
C. Cross-sectional analysis.
D. Comparison analysis. Answer: B
◉ 40. An auditor is performing an analytical procedure that involves
comparing a client's ratios with other companies in the same
industry. This technique is referred to as:
A. Vertical analysis.
B. Horizontal analysis.
C. Cross-sectional analysis.
D. Comparison analysis. Answer: C
◉ 41. An auditor is performing an analytical procedure that involves
developing common-size financial statements. This technique is
referred to as:
A. Vertical analysis.
B. Horizontal analysis.
C. Cross-sectional analysis.
D. Comparison analysis. Answer: A
, ◉ 42. Which of the following is not a basic approach often used by
auditors to evaluate the reasonableness of accounting estimates?
A. Confirmation of amounts.
B. Review of management's process of development.
C. Independent development of an estimate.
D. Review of subsequent events. Answer: A
◉ 43. The audit time budget is an example of:
A. A supporting schedule.
B. An administrative working paper.
C. A lead schedule.
D. A corroborative working paper. Answer: B
◉ 44. A schedule set up to combine similar general ledger accounts,
the total of which appears on the working trial balance as a single
amount, is referred to as a:
A. Supporting schedule.
B. Lead schedule.
C. Corroborating schedule.
D. Reconciling schedule. Answer: B
ASSURANCE SERVICES COMPLETE STUDY
GUIDE 2026
◉ . Which of the following is true about analytical procedures?
A. Performing analytical procedures results in the most reliable form
of evidence.
B. Analytical procedures are tests of controls used to evaluate the
quality of a client's internal control.
C. Analytical procedures are used for planning, but they should not
be used to obtain evidence as to the reasonableness of specific
account balances.
D. Analytical procedures are used in planning, as a substantive
procedure for specific accounts, and in the final review of the
audited financial statements. Answer: D
◉ 38. Which of the following is a basic approach often used by
auditors to evaluate the reasonableness of accounting estimates?
A. Confirmation.
B. Observation.
C. Reviewing subsequent events or transactions.
D. Analyzing corporate organizational structure. Answer: C
,◉ 39. An auditor is performing an analytical procedure that involves
comparing a client's account balances over time. This technique is
referred to as:
A. Vertical analysis.
B. Horizontal analysis.
C. Cross-sectional analysis.
D. Comparison analysis. Answer: B
◉ 40. An auditor is performing an analytical procedure that involves
comparing a client's ratios with other companies in the same
industry. This technique is referred to as:
A. Vertical analysis.
B. Horizontal analysis.
C. Cross-sectional analysis.
D. Comparison analysis. Answer: C
◉ 41. An auditor is performing an analytical procedure that involves
developing common-size financial statements. This technique is
referred to as:
A. Vertical analysis.
B. Horizontal analysis.
C. Cross-sectional analysis.
D. Comparison analysis. Answer: A
, ◉ 42. Which of the following is not a basic approach often used by
auditors to evaluate the reasonableness of accounting estimates?
A. Confirmation of amounts.
B. Review of management's process of development.
C. Independent development of an estimate.
D. Review of subsequent events. Answer: A
◉ 43. The audit time budget is an example of:
A. A supporting schedule.
B. An administrative working paper.
C. A lead schedule.
D. A corroborative working paper. Answer: B
◉ 44. A schedule set up to combine similar general ledger accounts,
the total of which appears on the working trial balance as a single
amount, is referred to as a:
A. Supporting schedule.
B. Lead schedule.
C. Corroborating schedule.
D. Reconciling schedule. Answer: B
