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Question 1: John has been given the following draft figures for Kulran Ltd for the year ended 30 June 2011
to analyse. Materiality has been set at $35,000 and the finance director has told John in a planning
meeting that there have been few changes in the year. Budgets were set at 2010 levels and there
have been no major movements in non-current assets.
20112010
$$
Revenue3,497,2843,487,286
Cost of sales1,867,2942,008,967
Salaries467,900420,975
Which of the following is normally designed to detect possible material monetary errors in the above
figures of financial statements?
A. Test of control
B. Walk-through test
C. Analytical procedure
D. Observation of a procedure
Correct Answer: C
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