An internal auditor plans to use an analytical review i.e. ratio analysis to verify the correctness of various operating expenses in a division. The use of an analytical review as a verification technique would not be a preferred approach if …

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the auditor notes strong indicators of a specific fraud involving this account.

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the operating expenses vary in relation to other operating expenses but not in relation to revenue.

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the company has relatively stable operations that have not changed much over the past year.

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the auditor would like to identify large, unusual or non-recurring transactions during the year.

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An internal auditor plans to use an analytical review i.e. ratio analysis to ver...

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