Final answer:
Analytical procedures in overall review according to AS 14 are intended to assist auditors in forming an overall conclusion about the financial statements, complementing substantive testing, and not specifically designed for detecting fraud or for gathering evidence on specific account balances.
Step-by-step explanation:
The purpose of analytical procedures in overall review according to AS 14 is C) To assist in forming an overall conclusion about the financial statements. Analytical procedures involve evaluating financial information by studying plausible relationships among both financial and non-financial data. They are used at the end of the audit to assist the auditor in forming an overall opinion on whether the financial statements as a whole are free of material misstatement.
These procedures do not replace substantive testing, but complement it by identifying any areas that may require additional investigation. They are not specifically designed to detect fraud and errors, nor are they used to gather evidence on specific account balances to the extent of substantive tests. Instead, analytical procedures can highlight inconsistencies or unexpected results that can then be examined more closely.
To implement analytical procedures effectively, auditors might compare financial information with prior periods, anticipate results by creating expectations based on models, or analyze relationships between financial data and relevant non-financial information. This method is akin to conducting research and reporting results but in the context of financial data review.