Determine the analytical procedures of auditors, Financial Management

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Analytical procedures of auditors

Auditors must apply analytical procedures at the planning and overall review stage of audit.

Analytical procedures include the consideration of comparisons of entity's financial information with, for illustration:

  • Comparable information for prior periods.
  • Anticipated results of the entity, from forecasts orbudgets.
  • Predictive estimates prepared by the auditors, like estimation of depreciation charge for the year end.
  • Similar industry information, like comparison of the entity's ratio of sales to trade debtors with industry averages, or with ratios relating to other entities of comparable size in same industry.
  • Between financial information and relevant non-financial information, like relationship of payroll costs to number of employees.

 


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