Which method is least effective for verifying all sales invoices if an auditor is conducting a fraud risk assessment?

Analytical procedures involve evaluating financial information by studying relationships and trends within the data, which can be useful for identifying anomalies that may indicate fraud. However, this method is inherently less effective for verifying individual sales invoices when compared to more direct verification methods.

In the context of a fraud risk assessment, the aim is to ensure accuracy and authenticity regarding specific transactions. Analytical procedures might highlight issues or provide insights into overall trends, but they do not deliver the concrete validation of individual sales transactions. For instance, if an auditor uncovers a trend showing increased sales, this does not confirm the legitimacy of each related invoice; it merely prompts further investigation.

On the other hand, inquiry and observation, sampling of transactions, and inspecting shipping documents provide more direct measures of transaction validation. Each of these methods involves looking closely at specific invoices and corresponding evidence, thus revealing potential irregularities more effectively than broader analytical assessments. Therefore, when it comes to verifying all sales invoices specifically, analytical procedures are the least effective choice in an environment focusing on fraud risk implications.