Final Answer:
Analytical procedures can be performed in the planning phase to assess the reasonableness of financial information and identify areas that may require additional attention during the audit process.
Step-by-step explanation:
Analytical procedures are a vital component of the audit process. In the planning phase, auditors use analytical procedures to evaluate the overall reasonableness of financial information. These procedures involve comparing financial data to expectations based on the auditor's understanding of the client's business and industry.
Performing analytical procedures during the planning phase helps auditors identify areas of potential risk or areas that may require further investigation. It assists in determining the nature, timing, and extent of other audit procedures to be performed during the subsequent phases of the audit.
By analyzing financial information early in the audit process, auditors can gain insights into the client's business operations, trends, and financial health. This, in turn, helps them tailor their audit approach to address specific risks and areas of concern. Therefore, analytical procedures in the planning phase contribute to the efficiency and effectiveness of the overall audit engagement.