An analytical procedure example is the comparison of:

Multiple Choice

a. Financial ratios of the current year to previous years.

b. Recorded amounts of major disbursements with appropriate invoices.

c. Results of a statistical sample with the expected characteristics of the actual population.

d. EDP generated data with similar data generated by a manual accounting system.

The correct example of an analytical procedure is the comparison of A) financial ratios of the current year to previous year.

Explanation:

Analytical procedure is a type of financial audit process which is usually done by an auditor or a person who has extensive knowledge of the business and the industry. Through this process an auditor, is trying to understand the clients business and changes that are taking place in the industry, so that he or she can identify what are the potentially risky areas for the company.

In this process an auditor would compare the financial statements of the company with the source of information or with previous years financial statements to see what re the areas in which company has improved or needs to be improved.

So it won't be wrong to say that an example of analytical procedure would be comparing the financial ratios of current year to previous year.