Dear sir,
Analytical procedures are confusing me.Is there an easy way to approach them?Is there a default set of calculations that I can do all the time.How do I know what to calculate?
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Analytical procedures
6y ago#1As summarised on page 71, analytical procedures
... must be used in risk assessment (see also page 52)
... may be used (i.e. optional) as substantive procedures
... must be used in final review.
Ratio analysis is just one type of analytical procedure and, as in financial statement analysis (F3/FA - F7/FR and P2/SBR) there is no single set of calculations to be made in all circumstances. When presented with financial statements (extracts) in Q1, for example, you should calculate a suitably considered range of ratios - profitability, liquidity, performance, gearing (possibly). The number of marks available for calculations alone will be capped (e.g. at 5 marks in S18 according to the examiner's report - please READ that report for the common issues that the examiner reported).
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