Question

A basic premise underlying analytical procedures is that

A The study of financial ratios is an acceptable alternative to the investigation of unusual fluctuations.
B Statistical tests of financial information may lead to the discovery of material misstatements in the financial statements.
C Plausible relationships among data may reasonably be expected to exist and continue in the absence of known conditions to the contrary.
D These procedures cannot replace tests of balances and transactions.

Answer 1

C Plausible relationships among data may reasonably be expected to exist and continue in the absence of known conditions to the contrary.

Step-by-step explanation:

Analytical procedures are defined as a set of practices during financial audit that assists the auditor asses potential risk, gain better understanding of a business, and give a framework for planning of future audits.

It shows relationship between financial and non financial data.

For example variability in relationships between financial and non financial data can result from factors like unusual events, business changes, random fluctuations, and misstatements.

So the basic underlying premise is that relationship among data will continue except conditions influence it to the contrary