CISA Information System Auditing Process Practice Question
Which TWO of the following are examples of analytical procedures used as audit evidence? (Select two.)
⚠ Common exam trap
CISA often tests the distinction between evidence-gathering techniques (inquiry, inspection, observation) and analytical procedures — the trap is selecting inquiry or inspection as 'analytical' because they are common audit activities.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Ratio analysis
Ratio analysis (A) is a classic analytical procedure because it evaluates financial information by comparing relationships among accounts (e.g., current ratio, gross margin percentage) to identify unusual fluctuations or inconsistencies that may indicate misstatement. Trend analysis (D) is likewise analytical, as it compares financial data across periods (e.g., year-over-year revenue growth) to spot significant variances requiring further audit attention. Both fall under the analytical procedures defined in auditing standards (e.g., AU-C 520), which involve evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data. By contrast, inquiry of management (B) is a form of audit evidence obtained through questioning, not analysis; inspection of documents (C) is a substantive test of details involving examination of records; and observation of process (E) is a procedure of watching a process or procedure being performed, none of which constitute analytical procedures.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Ratio analysis
Why this is correct
Ratio analysis is an analytical procedure: it compares financial or operational relationships to identify unusual variances or trends warranting investigation. This qualifies as substantive audit evidence derived from analysis rather than direct testing of transactions or controls.
- ✗
Inquiry of management
Why it's wrong here
Inquiry collects representations from management, which are assertions rather than the independent expectations analytical procedures compare against recorded amounts. It is tempting because inquiry is used throughout every audit, but it supports corroboration and risk assessment, not the substantive analytical comparison of financial data.
- ✗
Inspection of documents
Why it's wrong here
Inspecting documents verifies existence and authorisation of records; it yields no expectation against which fluctuations or ratios can be compared. It is tempting because inspection is a core audit evidence technique, yet analytical procedures demand the auditor to develop an independent expectation, which document inspection never produces.
- ✓
Trend analysis
Why this is correct
Trend analysis is an analytical procedure that examines data patterns across successive periods to identify significant fluctuations or anomalies. It provides audit evidence by highlighting areas needing further investigation, matching the stem's requirement for analytical procedures.
- ✗
Observation of process
Why it's wrong here
Observation witnesses a process as it happens, producing direct evidence about performance, not the comparisons and ratio analyses that analytical procedures require. It is tempting because observation is a legitimate evidence-gathering technique, but it belongs to control testing and physical inspection, not to analytical review.
Go deeper
Related to this question
About these practice questions
This CISA question is part of Courseiva's 934-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
This CISA practice question is part of Courseiva's free ISACA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CISA exam.