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3. ISA 520 Analytical Procedures states that where analytical procedures identify fluctuations or relationships that are inconsistent with other relevant information or that differ significantly from the expected results, the auditor shall investigate the reason for this. Which of the following audit responses to an increase in the receivables collection period is the LEAST relevant? a. Make inquiry of management to understand the likely reason why the receivable collection period exceeds the extended credit period b. Perform detailed testing on the aged receivable listing, to determine whether any amount should be written off c. Perform a trend analysis on current year and prior year monthly revenue, to identify whether revenue is overstated as a result of fraud or error d. Perform further working capital ratio analysis, to determine the effect of the extended credit on the company's cash position.

3. ISA 520 Analytical Procedures states that where analytical procedures identify fluctuations or relationships that are inconsistent with other relevant information or that differ significantly from the expected results, the auditor shall investigate the reason for this. Which of the following audit responses to an increase in the receivables collection period is the LEAST relevant? a. Make inquiry of management to understand the likely reason why the receivable collection period exceeds the extended credit period b. Perform detailed testing on the aged receivable listing, to determine whether any amount should be written off c. Perform a trend analysis on current year and prior year monthly revenue, to identify whether revenue is overstated as a result of fraud or error d. Perform further working capital ratio analysis, to determine the effect of the extended credit on the company's cash position

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