Comprehensive and Detailed Step-by-Step Explanation:
Trend Analysis: This technique identifies patterns or shifts in performance by analyzing data over
time. It is particularly effective for tracking metrics like revenue, expenses, or production volumes
across reporting periods to spot anomalies or trends.
Reference: The IIA Practice Guide on Analytical Procedures emphasizes trend analysis as a key tool
for understanding performance over time.
Other Options:
Ratio Analysis: Useful for comparing relationships between financial metrics but less effective in
visualizing performance changes over time.
Common Size Financial Statements: Focuses on comparing line items as a percentage of a base
amount, better suited for cross-sectional analysis (e.g., benchmarking).
Thus, the correct answer is A. Trend Analysis.
