AAA – L3 – SA – Q4.7 – Audit evidence

Analytical procedures are most reliable when applied to:

 estimates

B   non-recurring transactions

 revenue and expenditure

 asset and liability balances

C

Explanation: Analytical procedures are most reliable when applied to revenue and expenditure because these areas often have predictable relationships and stable trends (e.g., cost/revenue ratios). Estimates (A) are inherently uncertain, reducing reliability. Non-recurring transactions (B) lack consistent patterns. Asset and liability balances (D) may vary due to external factors, making them less predictable.