i) Analytical procedures: Analytical procedures refer to evaluations of financial information by studying plausible relationships among both financial and non-financial data. They involve identifying fluctuations and relationships that do not appear consistent with other relevant information or expected patterns.
(1 mark)

ii) Types of analytical procedures:

• Comparison with prior periods: This involves comparing current financial information with previous periods to identify significant changes or trends.
• Comparison with budgets or forecasts: Comparing actual results with budgets or forecasts to assess the company’s performance and identify variances.
• Industry comparisons: Comparing the entity’s financial ratios with those of other similar entities in the industry to evaluate performance.
• Reasonableness tests: Assessing the reasonableness of certain figures, such as interest expense, by computing expected amounts based on other known data.
  (3 marks)

iii) Situations where analytical procedures can be used:

• Risk assessment: Used at the beginning of an audit to identify areas of potential risk or misstatement.
• Substantive procedures: Employed during the audit to test specific assertions and validate the accuracy of financial data.
• Final review: Conducted at the conclusion of an audit to assess whether the financial statements as a whole are consistent with the auditor’s knowledge of the entity.
  (6 marks)