has required that analytical procedures be performed during all audits of financial statements. The Auditing Standards Board did so through the issuance of Statement on Auditing Standards (SAS) No. 56 in 1988
Independent social audits
Ernst & Young audits Amazon.
All levels of public administration in the United States--from municipalities to the federal agencies--undergo performance audits
Deloitte
PCOAB Public Company Accounting Oversight Board
The first step in the analytical procedures process is the development of an expected account balance.
The three main types of audits are financial audits, operational audits, and compliance audits. Financial audits focus on financial statements and records to ensure accuracy and compliance with regulations. Operational audits assess efficiency and effectiveness of processes and procedures. Compliance audits verify adherence to laws and regulations.
Quality audits
They are not both "analytical", but "substantive" and "analytical". Substantive procedures are reviews of documents for a "substantial portion" of account activity, while analytical procedures includ controls test and test relying on mathematical relationships reflectinb accounting mecvhanics, contractual provisions [debt times interest rate], or business capabilities [production per machine hour or day].
Analytical procedures are "one of many financial audit processes which help an auditor understand the client's business and changes in the business, and to identify potential risk areas to plan other audit procedures." So essentially these are the procedures that an auditor goes through to look at risks within the business.
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developed by Hirst and Koonce (1996) describes the performance of analytical procedures as consisting of five components: expectation development, explanation generation, information search and explanation evaluation, decision making, and documentation
The procedures required for this to be proven
SAS No. 56 describes analytical procedures as the "evaluation of financial information made by a study of plausible relationships among both financial and non-financial data" (AICPA, 1998, 56 p. 1).
it is a matter of professional judgment in determining whether the evidence adequately supports the explanation. This is one of the most important steps of the analytical procedures process and is referred to as the decision phase of the process.
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The primary purpose of substantive analytical procedures is to evaluate the relationships and trends within financial information to identify any discrepancies or anomalies that may indicate potential misstatements or errors in the financial statements. This helps auditors assess the reasonableness of account balances and gather evidence to support their audit conclusions.