When performing analytical procedures as risk assessment procedures, the auditor most likely would develop expectations by reviewing which of the following sources of information?
A.Comments in the prior year’s management letter.
B.Unaudited information from internal quarterly reports.
C.Various account assertions in the planning memorandum.
D.The risk assessment relating to specific financial assertions.
Unaudited information from internal quarterly reports.
Analytical procedures applied as risk assessment procedures (analytical procedures used to plan the audit) at the beginning of the audit may improve the understanding of the client’s business and significant transactions and events since the last audit. They also may identify unusual transactions or events and amounts, ratios, and trends that might indicate matters with audit implications (AU-C 315). The unaudited information included in the quarterly reports will give the auditor a sufficient overview to identify areas that may represent specific audit risks.