SUBSTANTIVE ANALYTICAL PROCEDURES

SUBSTANTIVE ANALYTICAL PROCEDURES

• The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both.
•  The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgment about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level. 
• The auditor may inquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. 
• It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.