Choice "A" is correct. Identifying reasonable explanations for unexpected differences before talking to client management helps the auditor in assessing if management's explanation is reasonable. Management's explanation should always be corroborated with other evidence.
Choice "c" is incorrect. Unaudited account balances are less reliable.
Choice "b" is incorrect. Analytical procedures assume that plausible relationships among data may reasonably be expected to exist and continue in the absence of known conditions to the contrary. Conditions that might cause variations in these relationships include unusual events. Expectations cannot be developed when there is no explanation of what caused a pattern of unusual changes.
Choice "d" is incorrect. Since the data is obtained from sources within the entity, it is not as reliable for developing expectations.