In short
Analytical procedures evaluate financial information by analyzing plausible relationships among financial and nonfinancial data, and investigate fluctuations that are inconsistent with other information or differ from expected values.
Key takeaways
- They are required in risk assessment and near the end of the audit, and optional as substantive procedures.
- Precision depends on the expectation: disaggregated, reliable data gives a tighter expectation.
- Differences above the threshold must be investigated and management's explanations corroborated.
Where it's tested
AUD: Analytical Procedures — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
At which stages of the audit are analytical procedures REQUIRED?