Introduction: Planning analytical procedures help auditors identify areas of potential material misstatements. The basic objective behind planning the analytical procedures is to help the auditor to find out the accounts which carry a comparatively high risk of misstatements during the planning phase so that a detailed plan can be laid out that can serve as a base for designing and planning the solution for the assessed risks.
The expectations differ between the planning analytical procedures and substantive analytical procedures and the factors influencing the precision of expectations.
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Chapter 9 Solutions
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- What is a scenario analysis? What is it designed to show, and how does it differ froma sensitivity analysis?arrow_forwardHow does the use of scenarios differ from sensitivity analysis?arrow_forwardWhat types of variables are commonly used in a CRA Z-score model? Define the ratios and explain how each is interpreted in assessing the probability of rescheduling?arrow_forward
- In testing for lower-of-cost-or-market, the auditor is gathering evidence to support which of the following assertions? a. Accuracy. b. Rights and obligations. c. Valuation. d. Pricing.arrow_forwardWhat are the two main variables the researcher should consider collecting data for the purpose of the above analysis and why? Identify the data type(s) for the variablesarrow_forwardForecasting that uses subjective analysis of subjective inputs is called O Judgmental forecast C Associative Models O Time Series O Hypothesis Testing O Descriptive Statisticsarrow_forward
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage LearningAccounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,