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Topic 1: Assume that an auditor wishes to use analytical procedures as a substantive procedure. Indicate how substantive analytical procedures could be used in assisting the auditor in testing the following accounts:
Interest expense related to bonds outstanding
Natural gas expense for a public utility company
Supplies expense for a factory
Cost of goods sold for a fast-food franchisor like McDonald’s. Note that the cost of goods sold tends to average about 35% of sales in fast-food franchises.
Salary expense for an office (region) of a professional services firm
Topic 2:
Please research and discuss how internal and operational audits address the specific needs of governmental agencies and how they differ from other types of financial statement audits.
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