Question

Which of the following statements is false regarding analytical procedures that help auditors assess the overall final presentation of the financial statements?

a. By performing a final analytical review, the audit firm will identify any unusual, unexpected, or unexplained relationships that should be resolved before the issuance of the audit report.

b. A basic five-step process for using analytical procedures applies.

c. Analytical procedures provide evidence on whether certain relationships make sense in light of the knowledge obtained during the audit.

d. Auditing standards require the use of analytical procedures in the final review phase of the audit to assist in identifying ending account relationships that are unusual

Answer 1

The false statement is option d - Auditing standards do not require the use of analytical procedures specifically in the final review phase of the audit to assist in identifying ending account relationships that are unusual.

Step-by-step explanation:

The false statement regarding analytical procedures that help auditors assess the overall final presentation of the financial statements is:

1. By performing a final analytical review, the audit firm will identify any unusual, unexpected, or unexplained relationships that should be resolved before the issuance of the audit report.
2. A basic five-step process for using analytical procedures applies.
3. Analytical procedures provide evidence on whether certain relationships make sense in light of the knowledge obtained during the audit.
4. Auditing standards require the use of analytical procedures in the final review phase of the audit to assist in identifying ending account relationships that are unusual.

The false statement is option d - Auditing standards do not require the use of analytical procedures specifically in the final review phase of the audit to assist in identifying ending account relationships that are unusual. Analytical procedures may be used throughout the entire audit process to assess the reasonableness and consistency of the financial statements. They help auditors in evaluating financial information by analyzing relationships and trends between different financial statement items.