When Are Analytical Procedures Required on AUD?
Analytical procedures can identify risk, provide substantive evidence, and support the overall final review.
Planning stage
Analytical procedures are used during planning to identify unexpected relationships, unusual fluctuations, and areas that may require more attention.
Substantive analytics
Analytical procedures can also be used as substantive procedures when appropriately designed. They are not automatically the substantive test for every account.
Final review
Analytical procedures are used near the end of the audit to evaluate whether the statements are consistent with the auditor's understanding of the entity.
Build expectations
A strong analytical procedure develops an expectation, compares recorded amounts to that expectation, and investigates significant unexplained differences.
The takeaway
Analytics can identify risk, obtain evidence, and evaluate the financial statements overall.
Related Summit guides
FAQ
Are analytics required during planning?
Yes under applicable auditing standards.
Are substantive analytics always required?
No.
Are analytics used at the end of the audit?
Yes.