Question 16:


Computation of ratios, the use of statistics and studying of trends is known as  

A. Hot review 

B. Analytical review 

C. Compliance review 

D. Parallel review 

E. Substantive review  


The correct answer is (B)


Past Question Review:

1. A hot file review features a detailed review of the accounts and audit working papers before the file has been fully signed off. The purpose of such a review is to identify any key issues which need to be addressed before final completion.

2. An analytical review is an auditing procedure based on ratios among accounts and tries to identify significant changes. type of: limited review, review. (accounting) a service (less exhaustive than an audit) that provides some assurance to interested parties as to the reliability of financial data.

3. A compliance review, also known as compliance monitoring or compliance testing, is the practice of conducting informal audits on current processes to find out whether people are following compliance requirements or if there is a problem with a particular process.

4. Substantive testing is an audit procedure that examines the financial statements and supporting documentation to see if they contain errors. These tests are needed as evidence to support the assertion that the financial records of an entity are complete, valid, and accurate.

The correct answer is (B)

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