Analytical procedures

This topic has 3 replies, 2 voices, and was last updated 9 years ago by Ken Garrett.

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April 19, 2017 at 10:42 am #382590
Anuja Nair
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Hi sir, i have a confusion regarding analytical procedures.
It’s a MUST for the auditor to use analytical procedures as risk assesment procedure during the planning stage.
And it’s also compulsory for the auditor to use analytical procedures in the final review stage, at the end of the audit.
But its OPTIONAL for the auditor to use analytical procedures as substantive procedures during the final audit.
Is my understanding correct sir ?
April 19, 2017 at 5:21 pm #382686
Ken Garrett
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It is a requirement ie compulsory to gather sufficient appropriate evidence and I can’t imagine why an auditor would not use analytical procedures during substantive tests as these. They are quick and easy and the auditor would need a very good reason not to use them.
April 20, 2017 at 3:50 am #382764
Anuja Nair
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So my understanding is correct right sir ?
April 20, 2017 at 8:09 am #382783
Ken Garrett
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Not really. The ISAs might not state that you have to do APs for substantive testing, but if the audit had gone wrong and you hadn’t done them, then you are liable to get into trouble because you had not performed important tests.
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