C7.2 Using regression analysis to search for notable items in an expense

Perform the following as part of the 2022 audit of G&J Airlines. The dependent variable is salaries and wages expenses. You should determine which independent variable(s), if any, are appropriate from the data set provided.

1. Plan an ADA as a risk assessment procedure that uses regression to investigate salaries and wages payable.
2. Prepare the data for your ADA.
3. Document the relevance and reliability testing that would need to be performed for this ADA to be effective and efficient. Assume all tests are satisfied.
4. Perform your planned regression analysis using the six steps outlined in "Regression Analysis." Looking for Notable Items.
5. Create a visualization to describe the results of the ADA and evaluate the results of the ADA.

Recommend procedures that should be taken because of your findings in (e).