Sa 520

Auditing standards don't specify what types of planning analytics to use. 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. Analytical procedures are performed as an overall review of the financial statements at the end of the audit to assess whether they are consistent with the auditorâ??s understanding of the entity. Final analytical procedures are not conducted to obtain additional substantive assurance. If irregularities are found, risk assessment should be performed again to consider any additional audit procedures are necessary. Analytical procedures - (i) set and document overall expectations based on past changes, management discussions, company minutes, etc (ii) compare prior period numbers to creating risk assessments at the financial statement reporting level.. (iii) add any key industry ratios tracked by management and those charged with governance (iv) summarise conclusions. These conclusions may indicate risk of material misstatement.

Sudha Reddy

CA Final

★ 20K+

23-Aug-22 14:19