Which of the following is not an analytical procedure?
Correct answer: A. Tracing of purchases recurred in the purchase book to purchase invoices.
- A. Tracing of purchases recurred in the purchase book to purchase invoices.
- B. Comparing aggregate wages paid to number of employees
- C. Comparing the actual costs with standard costs
- D. All of them are analytical procedure
Explanation
Tracing purchases from the purchase book to invoices is a test of details that verifies recorded transactions, not an analytical procedure. Comparing wages with employee numbers and actual costs with standards examines relationships or variances, so those are analytical procedures.
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Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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