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It is said that Substantive Analytical Procedures improve audit efficiency @ the substantive level by reducing the level of detailed substantive testing necessary. However I believe the auditor still has to perform a lot of Substantive Tests of Detail anyway to be sure of the truth & fairness of fin-stats–>could be wrong.
So … I’m wondering how useful substantive analytics really are AT THIS STAGE, i.e. they make sense in theory for the exam but do they really improve efficiency and are useful in real-world audits?
They are used at the substantive level insofar that if a ratio is similar to that of previous years, that is some evidence that the figure is correct. Less detailed testing would then be performed. If the ratio were very different then more detailed testing would be done.
In some ways the use of substantive procedures at the planning stages and substantive stages overlap.
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