Analytical Test
Barron's Accounting Dictionary:
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Analytical Test
Procedure evaluating data relationships to derive substantive audit evidence. It identifies areas requiring additional audit attention. For example, auditors would compare actual financial statement figures against their professional expectations and the firm's experience. Discrepancies are noted and investigated. A comparison may also be made between figures of competing firms and industry norms. Further, financial information can be compared to nonfinancial information, where appropriate. An example is the relationship between sales and number of employees. Analytical tests can be conducted in measures other than dollars, if desired, such as in physical quantities and ratio percentages. If the tests uncover illogical relationships, the CPA will perform more detailed audit testing.
See also substantive test.
See also substantive test.
| Amount of $1, Amount Realized, Amortize | |
| Analyticalreview, Analyze, Annual Budget |
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Barron's Accounting Dictionary
Dictionary of Accounting Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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