Final answer:
False. Analytical procedures in auditing can help identify inventory valuation issues, but may not directly reveal conditions indicating significant amounts of obsolete inventory.
Step-by-step explanation:
False.
Analytical procedures in auditing are used to evaluate financial information for the purpose of forming an opinion on the financial statements. These procedures involve the use of comparisons and relationships to identify potential anomalies or irregularities. While analytical procedures can help identify inventory valuation issues, such as over or underpricing, they may not directly reveal conditions indicating significant amounts of obsolete inventory.