Analytical Procedures

Question 1

Analytical Procedures

Answer 1

Evaluations of financial information through analysis of plausible relationships among both financial and nonfinancial data

Question 2

Analytical Procedures Serve 3 purposes:

Answer 2

1) Used in planning for risk assessment purposes—Required, must be performed
2) Used for substantive purposes as a partial basis for conclusions—Not technically required for this purpose, but still widely used on a voluntary basis; referred to as “substantive analytical procedures” in this context
3) Used as a final review to determine that sufficient appropriate evidence has been gathered to support audit conclusions—Required, must be performed