es In an audit of financial statements, the auditors gather various types of audit evidence. List seven major types of evidence and provide a procedural example of each. Analytical procedures are extremely useful throughout the audit. Required: a. Explain how analytical procedures are useful in (1) The risk assessment stage of the audit. (2) The substantive procedures stage of the audit. (3) Near the end of the audit. b. List the five sources of information that are available to the auditors in developing expectations for analytical procedures. c. List and describe four techniques that may be used by the auditors in developing expectations for analytical procedures. When analytical procedures disclose unexpected changes in financial relationships relative to prior years, the auditors consider the possible reasons for the changes. Give several possible reasons for the following significant changes in relationships: a. The rate of inventory turnover (ratio of cost of goods sold to average inventory) has declined from the prior year's rate. b. The number of days' sales in accounts receivable has increased over the prior year. Auditors are required on every engagement to obtain a representation letter from the client. Required: a. What are the objectives of the client's representation letter? b. Who should prepare and sign the client's representation letter? c. When should the client's representation letter be obtained? S At 12 o'clock, when the plant whistle sounded, George Jones, an assistant auditor, had been working on his laptop computer. Jones stopped work immediately, but not wanting to waste a lot of time, he simply closed his laptop. He then departed for lunch. The auditor- in-charge, who had been observing what was going on, was critical of the assistant's actions. What do you think was the basis for criticism by the auditor-in-charge