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Which of the following auditing techniques cannot provide evidence about the operation of controls?
– Inspection
– Analytical Procedure
– Observation
– RecalculationCan you explain how the answer is analytical procedure
Thanks
Analytical procedures are basically comparisons and ratios. That can give no evidence about the operatoin of a control such as whether or not a bank reconciliation is carried out regularly.
However, you could inspect bank recs, observe one being done (unlikely), recalculate/reperform one to make sure the control was exercised properly.
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