Page 39 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

d) As per the Standard on Auditing (SA) 520 “Analytical Procedure” ‘the term “analytical
procedures” means evaluations of financial information through analysis of plausible
relationships among both financial and non-financial data.

520.10 (M20R/M22M/N22M)
Statement I As per the Standard on Auditing (SA) 520 “Analytical Procedures”, the term “analytical
procedures” means evaluations of financial information through analysis of plausible relationships
among financial data.

Statement II Analytical procedures also encompass such investigation as is necessary of identified
fluctuations or relationships that are inconsistent with other relevant information or that differ
from expected values by a significant amount.
a) Only Statement I is correct
b) Only Statement II is correct
c) Both statements are correct
d) Both Statements are incorrect

520.11 (M20R)
Which of the following is not an example of Analytical Procedures having consideration of

comparisons of the entity’s financial information?
a) Comparable information for prior periods.
b) Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor,
such as an estimation of depreciation.
c) Similar industry information, such as a comparison of the entity’s ratio of sales to accounts
receivable with industry averages or with other entities of comparable size in the same
industry.
d) Among elements of financial information that would be expected to conform to a predictable
pattern based on the entity’s experience, such as gross margin percentages.

520.12 SM21
……………is the comparison of current data with the prior period balance.
a) Ratio Analysis
b) Trend analysis
c) Reasonableness test
d) Structural Modelling

520.13 SM21/M22M/M23M
Auditor Compares Gross Profit Ratio with that of previous year and it is discovered that there has
been a fall in the ratio. This is an example of:

a) Analytical Procedure
b) Test of Controls
c) Walk through Test
d) Audit Sampling

520.14 SM21
Statement1: Analytical procedures are more useful while conducting the audit and at the
completion phase and are of no use at the planning stage.
Statement 2 : In the planning stage, audit procedures assist the auditor in understanding the client’s
business and identifying the areas of potential risks.

a) Statement 1& 2 are correct
b) Statement 1 & 2 are incorrect
c) Only Statement 1 is correct
d) Only Statement 2 is correct

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