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Analytical Procedures in Auditing
- Evaluate financial information by studying relationships among financial and non-financial data
- Involve investigating fluctuations and relationships that match or deviate from expectations
Types of Analytical Procedures
- Comparing with: • Similar information from previous periods • Budgeted or forecasted results of the entity • Auditor's predictions • Industry benchmarks • Financial elements expected to follow a pattern based on the entity's past (e.g., gross profit and sales relationship)
Other Analytical Procedures
- Comparing financial data with relevant non-financial data (e.g., payroll costs and number of employees)
Conducting Analytical Procedures
- Various methods can be used, from simple comparisons to complex statistical analyses
- Methods can be applied at different levels (company, branch, or account level)
- Choice of method is based on auditors' professional judgement
Use of Information Technology
- Information technology is often extensively used in conducting analytical procedures during risk assessment
Analytical Procedures in Auditing
- Evaluate financial information by studying relationships among financial and non-financial data
- Involve investigating fluctuations and relationships that match or deviate from expectations
Types of Analytical Procedures
- Comparing with: • Similar information from previous periods • Budgeted or forecasted results of the entity • Auditor's predictions • Industry benchmarks • Financial elements expected to follow a pattern based on the entity's past (e.g., gross profit and sales relationship)
Other Analytical Procedures
- Comparing financial data with relevant non-financial data (e.g., payroll costs and number of employees)
Conducting Analytical Procedures
- Various methods can be used, from simple comparisons to complex statistical analyses
- Methods can be applied at different levels (company, branch, or account level)
- Choice of method is based on auditors' professional judgement
Use of Information Technology
- Information technology is often extensively used in conducting analytical procedures during risk assessment
This quiz covers the analytical procedures used in auditing, including evaluating financial information and investigating relationships among data. Learn about the types of analytical procedures and their application in the risk assessment stage of an audit.
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