Question

Which of the following nonfinancial information would an auditor most likely consider in performing analytical procedures during the planning phase of an audit?

-Objectivity of audit committee members.
-Square footage of selling space.
-Turnover of personnel in the accounting department.
-Management’s plans to repurchase stock.

Answer 1

During audit planning, an auditor often reviews nonfinancial information such as the square footage of selling space and accounting department personnel turnover to perform analytical procedures and assess potential risks.

Step-by-step explanation:

Among the nonfinancial information that an auditor might consider during the planning phase of an audit, square footage of selling space and turnover of personnel in the accounting department are relevant for performing analytical procedures. The square footage of selling space can give an indication of the potential for sales volume and space utilization efficiency, important for assessing the reasonableness of reported sales figures. A high turnover of personnel in the accounting department could signal potential internal control issues, which would be of interest when planning the audit approach.

While the objectivity of audit committee members and management's plans to repurchase stock are also important considerations in an audit, they may not directly relate to analytical procedures performed in the planning phase aimed at understanding patterns in financial data.