Analytical procedures are required to plan the audit, gain an understanding of the business, and make preliminary risk assessments. This includes comparing current year (20x2) book balances with the prior year (20x1) audited amounts and examining unusual relationships between account balances based on your expectations. Follow the procedures noted on the Preliminary Analytical Review Procedures APG (omit step 6). 1. Utilize the template included in the Workpapers folder indexed as "PAR" 2. At the top of the workpaper, include the following elements: a. Purpose i. Why are you completing this testwork? b. Procedure i. What procedures are performed on the workpaper? 1. Hint: Utilize the APG c. Scope i. Changes greater than $500 and 10% d. Conclusion i. Conclude about the audit risks and overall effect the preliminary analytical review procedures will have on the audit program 3. Compare the current year (20x2) book balances with the prior year (20x1) audited balances a. Ensure that there is a column reflecting the computation of the dollar value difference between the amounts b. Ensure that there is a column reflecting the percentage change between the amounts c. Recalculate the percentage of total assets/ percentage of total sales for both the current and prior year balances d. Ensure that all cells have a value (even if the balance is zero or the calculation was not previously included in the template) e. Ensure that column totals are properly calculated and presented f. Ensure that the you can balance the trial balance 4. For each change, provide comments and audit strategy a. Explain whether the change is above or below scope b. Changes greater than 500 and 10% warrant an explanation and workpaper reference for where further testwork will be performed. Explanations can draw upon: i. Relationships with other accounts (i.e. cash and sales revenue) ii. Review of the board minutes iii. An understanding of VPC and the nature of its business as described in the Permanent File c. Changes below scope require an explanation that the amounts are considered reasonable and that no further testwork is needed at this time Assignment 1 Part 2: Preliminary Analytical 2 DELIVERABLES The following deliverables are required: 1. Coversheet a. Assignment 1 Part 2 b. First and Last Name c. Fall 202X 2. Preliminary APG Steps 1-5 (omit step 6) a. Upon completion, initial and date each step b. Provide an applicable WP reference 3. Preliminary Analytical Review (PAR) Workpapers.