Analytical Procedures in Planning the Audit
- In the planning stage, analytical procedures assist the auditor in understanding the client’s business and in identifying areas of potential risk by indicating aspects of and developments in the entity’s business of which he was previously unaware.
- This information will assist the auditor in determining the nature, timing and extent of his other audit procedures.
- Analytical procedures in planning the audit use both financial data and non-financial information, such as number of employees, square feet of selling space, volume of goods produced and similar information.
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