Which Of The Following Would Be Considered An Analytical Procedure?

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Which Of The Following Would Be Considered An Analytical Procedure?

a. Testing purchasing, shipping, and receiving cutoff activities. b. Comparing inventory balances to recent sales activities. c. Projecting the deviation rate of a statistical sample to the population. d. Reconciling physical counts to perpetual records and general ledger balances.
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b. Correct One example of an analytical procedure is when auditors evaluate financial statement accounts by developing expectations about what an account balance should be based on an analysis of relevant financial and nonfinancial data. When examining the inventory balance, the auditor would expect a lower balance if there was significant sales activity. Thus, this is an example of an analytical procedure.
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