Analytical Procedures - Unit 17

Webby

Can someone summarise what they are exactly, they keep coming up in my notes but I can never remember what they are.

Anyone got any advice on how to remember them?

Cheers

Rinske

Uhm, it's all the ratio calculating and checking with all things you can think of (previous periods, sales with expenses etc).

The best advice I can give you is to look for a number of posts of Steve Collings here and to have a look on his articles on auditing on the website www.accountancystudents.co.uk/news/headlines/C65/

I do hope he doesn't mind me linking to him all the time, but he is way better in explaining stuff than I will ever be!

Steve Collings

Rinske - link away!!! you're more than welcome!

Analytical procedures can be adopted to analyse trends between certain items in the financial statements. For example, the auditor will use analytical procedures to identify if there has been any unexpected distortion in (say) gross profit margins. If there has, then the auditor will need to perform procedures to identify whether there are any underlying errors/misstatements giving rise to such a distortion.

There are lots of articles which I have written which Rinske has linked to so have a read of those and if you need any further clarification, then please feel free to post.
Regards

Steve

Webby

Cheers Steve, I will do that.