What types of analytical procedures are used by internal auditors?
Specific analytical procedures include ratio, trend, and regression analysis; reasonableness tests; period-to-period comparisons; comparisons with budgets; forecasts; and external economic information. Analytical procedures assist internal auditors in identifying conditions that may require additional audit procedures.
In which situations in the audit are analytical procedures used?
Analytical procedures are also commonly used in non-audit and assurance engagements, such as reviews of prospective financial information, and non-audit reviews of historical financial information.
What are substantive analytical procedures?
Likewise, substantive analytical procedures are the audit procedures that auditors perform to obtain evidence about the reasonableness of amounts shown in the financial statements by using such plausible relationships among data.
What is the difference between analytical procedures and substantive procedures?
Substantive tests, aka tests of balances, are more statistical driven and really dig into the details of the balances themselves. Analytical Procedures ARE $ubstantive Procedures. Notice the S in substantive. There are two main types of activities auditors perform–tests of internal controls and $ubstantive testing.
What is the purpose of analytical procedures in an audit?
The purpose of applying analytical procedures in planning the audit is to assist in planning the nature, timing, and extent of auditing procedures that will be used to obtain evidential matter for specific account balances or classes of transactions.
What is the difference between substantive procedures and analytical procedures?
What are analytical review procedures?
The accounting profession defines analytical review procedures as, ”evaluations of financial information through analysis of plausible relationships among both financial and non-financial data.
How do auditors use analytical procedures?
Experienced auditors use analytical procedures in all stages of the audit. For example, analytical procedures may help the auditor during the planning stage to determine the nature, timing and extent of auditing procedures that will be used to obtain audit evidence for specific account balances or classes of transactions.
What are examples of analytical procedures?
Examples of analytical procedures are as follows: Compare the days sales outstanding metric to the amount for prior years. This relationship between receivables and sales should remain about the same over time, unless there have been changes in the customer base, the credit policy of the organization, or its collection practices.
What are substantive procedures in auditing with examples?
Substantive Audit Testing: Definition, Explanation, and Example Overview: Substantive testing or substantive procedure is the technique used by the auditor to obtain the audit evidence in order to support auditor opinion. Financial Assertions: Verified completeness. Explanation: As mention above, the substantive audit procedures are performing at the execution stag after auditors prepared audit planning.
Substantive analytical procedures are used to obtain evidential matter about particular assertions related to account balances or classes of transactions. Final analytical procedures are used as an overall review of the financial information in the final review stage of the audit.