SimplyCPA
Quick Sheets/AUD/Analytical Procedures

AUD — Quick Sheet

Analytical Procedures

Read time: ~5 minutes

One-minute revision

  • Required in planning (risk assessment) and final review; optional as a substantive procedure
  • 4 steps: develop expectation → set tolerable difference → compare → investigate & corroborate
  • Management's explanation alone is never sufficient — corroborate it
  • Effective when relationships are plausible/predictable and data is reliable
  • Income statement relationships more predictable than balance sheet ones