ACCT 107 Lecture Notes - Lecture 27: Archive File
21 Oct 2020
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Per cas 520. 4: analytical procedures are evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data. They may be performed throughout the engagement: 1. During the risk response we are actually doing testing (saps). Here we are actually testing for material misstatements rather than just engaging. We"ve done all our testing and we"ve prepared the drafts of fs"s. We step back and look for differences and say have we tested these differences? ex. If there is a year over year difference in pp and e we need to ask ourselves if we tested it enough. The auditor typically compares the client"s balances and ratios with expected balances and ratios using one or more of the following types of analytical procedures. In each case, auditors compare client data with: industry data, similar prior-period data, client-determined expected results, auditor-determined expected results. The degree of precision of the analytical procedures is dependent on a number of different factors.
