ACCA Audit and Assurance (F8) Practice Exam

Which of the following is considered a common audit procedure?

1. Purchase requests

2. Analytical Procedures

3. Employee interviews

4. Management assessments

The correct answer is: Analytical Procedures

Analytical procedures are indeed considered a common audit procedure because they involve evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. They help auditors identify any unusual transactions or trends that might indicate risks of material misstatement. By comparing current financial information with prior periods or industry benchmarks, auditors can form expectations about what the financial results should look like. This allows for a focused examination on areas where discrepancies might exist, ultimately enhancing the efficiency and effectiveness of the audit process. The use of analytical procedures can also serve as a substantive test, providing evidence on the completeness and accuracy of the financial statements. They are commonly used in various stages of the audit, including planning and final review, to help ensure that the auditor understands the business and is alert to potential areas of concern. While the other options—purchase requests, employee interviews, and management assessments—are all valuable processes in various audit contexts, they do not represent common procedures used as standard practice within the audit itself. Purchase requests are typically part of internal controls and procurement processes, employee interviews might be used to gather qualitative insights, and management assessments, while important for understanding internal controls, do not directly serve as audit procedures like analytical procedures do.