Question 1Analytical procedures are the activity which enables the auditor to ascertain evidence forconducting audit activities for an organization. These are the methods which provide theknowledge about the authenticity of the transaction undertaken by the organization to carry on itsactivities. It is helpful in determining that the transactions are genuine and or undertaken forconducting the activities of the business organization. In order to prepare plan and to ascertainthe direction in which the audit activity is to be conducted auditor performs different methods ina comprehensive manner to check the transaction which are not related to the company, checkwhether there is any fluctuation in the past years by the company (Christensen, et. al., 2012). These analytical procedures work as an evidence to perform planning. This helps the auditor intaking decision about the activities which are to be deeply checked and which are taken as lessconcern. On the basis of results on analytical procedures of auditor get the knowledge about thestrength of the internal control procedure of the company. It's on the basis of this activity it isascertained that internal the auditor can plan the audit according to the results obtained. If ifauditor comes into knowledge that internal control procedures are weak and the areas which areneed to be checked in detail then the auditor specially studies the item in detail. Analytical procedure a very important in conducting Audit and preparing report by the auditor inorder to provide true and fair view of the financial statement can be given. Conducting the test onthe transactions helps the auditor in determining the fraud and error conducted by the companyor misstatements in the financial statements (Brown-Liburd, et. al., 2015).In the present case company is paying ebook storage fees which have been substantiallyincreased from 2013 to 2015. To check the viability of the fees paid the auditor should check thepast records and the change in Trend of the company. Bad debts have been increased from thepast years so the auditor should check the increase in number of debtors and the reason for thenonpayment of the due amount. Why the company has not been able to collect the amount fromthe debtors in past years which has led to the increase in provision for bad and doubtful debts ofthe company.3

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