Analytical procedures
Financial Dictionary — Auditing Procedures
Definition
Evaluations of financial information by studying plausible relationships among data.
Detailed Explanation
Analytical procedures involve evaluating financial data by analyzing relationships among both financial and non-financial information.
Common Uses
- Used in audit planning to understand risks and design procedures.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
Practical Example
- Example: The auditor references **Analytical procedures** when designing procedures and documenting conclusions in the audit file.
Why This Term Matters
- Why it matters: Supports high-quality, defensible audit conclusions and helps detect material misstatements and control weaknesses.