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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
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