You are performing substantive analytical procedures to audit interest income on a long$-$term loan. Based on step $3$: compute differences, you noted the difference is higher than the threshold

defined in step $2.$

Difference $=200,000$

Threshold defined in step $2=150,000$

Performance materiality $=250,000$

What would you do next?

Conclude on the analytic as the difference is less than performance materiality.

Escalate the exception immediately to the client and document the inquiry performed.

Discuss your findings with a more experienced team member to determine whether further procedures are required.

Perform additional tests of details since this was how you addressed an exception in other testing.