#4 Analytical procedurs - ANALYTICAL PROCEDURES It refers...

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ANALYTICAL PROCEDURES It refers to the analysis of significant ratios and trends, including the resulting investigation of fluctuations and relationships in both financial and nonfinancial data that are inconsistent with other relevant information or which deviate significantly from predicted amounts.
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Examples: a. Analytical procedures include the consideration of comparisons o the entity’s financial and nonfinancial information with, for example: Comparable information for prior periods. Anticipated results of an entity Predictive estimates prepared by the internal auditor Similar industry information b. Consideration of relationships: Among elements of the financial information that would be expected to conform to a predictable pattern based on the entity’s experience Between financial information and relevant nonfinancial information
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INHERENT RISKS KEY DATA/RELATIONSHIP Accrued and unearned income on stocks and bonds is recorded incorrectly as to account, amount and period.
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