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According to ISA 520, analytical procedure means “the evaluation of financial information through the analysis of...

According to ISA 520, analytical procedure means “the evaluation of financial information through
the analysis of plausible relationships among both financial and non-financial data. It includes the
investigation of identified fluctuations, or relationships that are inconsistent with other relevant
information, or that differ from expected values by significant amount”. Corona virus or the
COVID19 pandemic has affected most, if not all, of the business industries not only in Oman but all
over the world. This is due to the imposed “lockdown” of areas affected by the pandemic to not
spread the disease and worsen the situation. One of the industries that are considered affected by this
pandemic is the Pharmaceutical Industry. Based on the news, pharmaceutical companies are now
worried of drugs shortages as the pandemic affects many countries. Also, because employees are
getting sick or afraid to contract the virus, only few are able to report to work. Assume that you are a
member of an audit team assigned to analyze the effects of the corona virus (COVID19) pandemic
on businesses. Answer the following questions related to this business sector: Pharmaceutical
Industry (example Muscat Pharmacy)
Required: Answer the following questions on analytical procedures:
1. In your opinion, will this business sector be favorably or unfavorably affected by the COVID19
pandemic? Explain your answer focusing on the financial impact.
2. How could the auditor analyze the financial impact to the business sector given? Give at least two
suitable examples of analysis that you can use to analyze the impact of the pandemic to a specific
business belonging to the pharmaceutical industry, like the Muscat Pharmacy.

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