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February 2, 2025

Assume that an auditor wishes to use analytical procedures as a substantive procedure

Assume that an auditor wishes to use analytical procedures as a substantive procedure. Please choose “1” from the list below and indicate how substantive analytical procedures could be used in assisting the auditor in testing the following accounts:

a. Interest expense related to bonds outstanding

b. Natural gas expense for a public utility company

c. Supplies expense for a factory

d. Cost of goods sold for a fast-food franchisor like McDonald’s. Note that cost of goods sold tends to average about 35% of sales in fast food franchises.

e. Salary expense for an office (region) of a professional services firm

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