Question

write a report discussing the auditor's use if analytical procedures in conducting an audit. what are the primary analytical procedures that auditors use? why are analytical procedures necessary on an audit? how do they help an auditor be more efficient and effective? at what stage of an audit are analytical procedures applied?

Answer 1

Analytical procedures are auditing procedures that involve analysis of relationship between financial and non-financial data. These involve investigation of identified variances and relationships that seem inconsistent with each other or with other available audit evidence.

Analytical procedures are used in the financial audit to assist in the understanding of business operations and in the identification of potential risk areas that need to be addressed. In other words, they are actions taken by auditors to understand the company’s finances, operating environment, and history.

Auditors perform these assessments to compare financial statements and expected relationships between financial and non-financial data in an effort to find inconsistencies. Fluctuations in the expected data relationships could point the auditors to some type of misrepresentation or fraudulent reporting by the company’s management.

Auditors also use this assessment to projected financial data as well the review of historical financial information.

These are all the information regarding analytical procedures required to solve the given questions.

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