What is Substantive analytical procedures?
In short
Substantive analytical procedures are analytical procedures used as substantive evidence: the auditor develops an expectation precise enough to detect a material misstatement, compares it with the recorded amount, and investigates significant differences.
Key takeaways
- They work best for large volumes of transactions that are predictable over time, such as payroll or interest.
- Their reliability depends on the data used to develop the expectation.
- For a significant risk addressed only by substantive procedures, tests of details must be included.
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
Substantive analytical procedures are most effective and efficient when: