Question

If not already performed during the overall review stage of the audit, the auditor should perform analytical procedures relating to which of the following transaction cycles?

a.Purchasing.
b.Revenue.
c.Payroll.
d.Inventory.

Answer 1

The auditor should perform analytical procedures for purchasing, revenue, payroll, and inventory transactions to identify any significant fluctuations or anomalies.

Step-by-step explanation:

The auditor should perform analytical procedures relating to all of the following transaction cycles if not already performed during the overall review stage of the audit:

1. Purchasing: Analyzing purchasing transactions and related accounts such as accounts payable to identify any significant fluctuations or anomalies.
2. Revenue: Examining revenue transactions and related accounts such as accounts receivable to detect any unusual trends or abnormalities.
3. Payroll: Analyzing payroll transactions and related accounts to ensure accuracy and compliance with laws and regulations.
4. Inventory: Reviewing inventory transactions and related accounts to confirm the existence and valuation of inventory.