Question

Analytical procedures:

A) are not a type of audit evidence.
B) are not required during the completion phase of the audit.
C) performed during the planning phase of the audit are used as a substantive test in support of account balances.
D) performed in the completion phase serve as a final review for material misstatements or financial problems.

Answer 1

Option D is correct; analytical procedures in the completion phase of an audit act as a final review for material misstatements. These procedures form an integral part of the audit evidence and are used to analyze data and detect any financial inaccuracies or discrepancies.

Step-by-step explanation:

The question relates to analytical procedures in an audit setting. Analytical procedures involve comparing financial data, looking for consistencies and inconsistencies to help understand the company's financial position. They are indeed a type of audit evidence. Specifically:

• Option A is incorrect as analytical procedures are indeed a form of audit evidence.
• Option B is incorrect because analytical procedures are required during the planning phase and can also be performed during the completion phase of an audit.
• Option C can be misleading; while analytical procedures are used during the planning phase, they are generally for gaining an understanding rather than serving as a substantive test for account balances.
• Option D is correct. Analytical procedures performed in the completion phase are indeed used as a final review to look for material misstatements or financial problems that might indicate risks or errors in the financial statements.