Reference no: EM133062472

Question - Substantive analytical procedures include the evaluation of financial information through the analysis of relationships or correlations that may exist between financial and non-financial data. Appropriate expectations must be established for the amounts or figures checked by an auditor, when compared with actual figures. For example, to check the value of premium sales at Gas Stations, we correlate the number of liters sold (A) and the Premium Price (B). If A and B are known, the expected sales value (P) can be built, namely P = A x B. The expectation (P) with this simple formula is sufficient to identify the presence or absence of misstatements.

Required -

a. List and explain matters that the auditor should consider when designing substantive analytical procedures?

b. How does the auditor determine the risk of material misstatement and provide examples of how the auditor considers the potential for misstatement of the financial statements?

c. Give some examples of analytical procedures that are effective in business activities?

1. What things need to be considered must be clear.

2. How to determine and consider thirst clearly.

3. Examples of effective analytical procedures should be clear.

4. The time of collection of assignments must be right.