n23 The analytical procedure is required during the planning and completion phases of the audit. You are required to identify, which of the following are analytical procedures. ed out of 1. Calculation of gross profit margin and comparison with prior years 2.Recalculation of the non-current asset register 3.Comparison of current year payroll with prior year payroll a. Option 1 and 3 O b. Option 1,2 and 3 O c. Option 1 and 2 O d. Option 2 only 24 d out of Whilst carrying out the analytical procedures on the draft financial statements of Lemon Co during the planning of the external audit, you have identified that the gross profit margin has increased compared with the prior year, and there is no obvious business reason for this to have happened. Which of the following misstatements is a valid explanation for this change? O a. Some sales invoices have been omitted in error and it leads to understatement of revenue O b. During the year-end inventory count, the contents of one warehouse have been recorded twice and it leads to an over valuation of closing inventory O c. Over valuation of the opening inventory this year and it leads to an increase in overall cost of sales O d. Operating expenses have been included in Cost of Sales by mistake 25 A manager signing a purchase order to confirm the order can be placed with the supplier. This should ensure that the goods are for a valid business use and the items are needed. You are required to choose the correct control activity mentioned in the above scenario. -ut of a. Segregation of duties O b. Independent checks on performance O c. Physical control O d. None of the options on 26 The three-party relationship is one of the elements of an assurance engagement. You are required to choose from the following which three parties are involved in the context of an external audit. ed out of on O a. A practitioner for example an external auditor, a responsible party is the shareholders and indented users are the BOD O b. None of the options c. A practitioner for example shareholder, a responsible party is the BOD and indented users are the external auditors O d. A practitioner for example an internal auditor, a responsible party is the BOD and indented users are the shareholder