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1. “Analytical procedures are used as substantive procedures when the auditor considers that the use of analytical procedures can be more effective or efficient than tests of details in reducing the risk of material misstatements at the assertion level to an acceptably low level.”
2. Analytical procedures are used as substantive procedures when the auditor considers that the use of analytical procedures can be more effective or efficient than tests of details in ASSESSING the risk of material misstatements at the assertion level.
which statement is correct???
1 – substantive analytical procedures (SAPs) are applied to obtain audit evidence, which reduces the risk of material misstatement.
Analytical procedures used at the planning stage (“preliminary analytical procedures”) help assess risk.
For more details see the purposes of analytical procedures and use of SAPs sections of this article https://www.accaglobal.com/crsh/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/analytical-procedures.html
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