What are analytical procedures and when are they used?
Analytical procedures are used by accountants in multiple levels of service, and they are critical to evaluating financial data and variations that occur in financial data. But selecting and documenting analytical procedures are subjective processes, so the area of analytical procedures is one that can cause frustration for accountants.
Analytical procedures are “evaluations of financial information through analysis of plausible relationships among both financial and nonfinancial data,” according to an AICPA statement on audit standards related to analytical procedures. “Analytical procedures also encompass such investigation, as is necessary, of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount.”
In other words, analytical procedures are an important aspect of not only understanding financial data, but also of flagging and researching inconsistencies. As a result, accountants are often planning and evaluating the results of analytical procedures.
Learn more about documenting analytical procedures here.
In review engagements, analytical procedures are used to help provide limited assurance that the financial statements don’t require material adjustments. For example, accountants develop expected values regarding various financial ratios, based on the accountant’s understanding of the company and industry trends, as well as the accountant’s understanding of potential areas of increased risk of misstatement.
In audit engagements, according to the AICPA statement AU Section 329, analytical procedures are used:
• To assist in planning the nature, timing and extent of other auditing procedures;
• As a substantive test to obtain audit evidence about particular assertions related to account balances or classes of transactions, and
• As an overall review of the financial information in the final review stage of the audit.
In other words, analytical procedures are used throughout the audit engagement – in audit planning, execution and review. As a result of their importance, developing and documenting analytical procedures can consume a lot of time.
Some accountants use software to streamline the preliminary analytics for audit and review and to standardize the analytical procedures. In this way, technology can allow the accountant to have more time available to look at overall conditions of the client’s finances, and at values that may be out of line.
To learn more about standardizing analytical procedures with ProfitCents, request information here.
Utaratibu wa uchambuzi ni nini na unatumiwa lini? Utaratibu wa uchambuzi hutumiwa na wahasibu katika ngazi nyingi za huduma, na ni muhimu kwa kutathmini data za kifedha na tofauti zinazotokea katika data za kifedha. Lakini kuchagua na kuorodhesha taratibu za uchambuzi ni michakato ya kibinafsi, kwa hivyo eneo la taratibu za uchambuzi ni moja ambayo inaweza kusababisha kukatishwa tamaa kwa wahasibu. Utaratibu wa uchambuzi ni "utathmini wa habari za kifedha kupitia uchambuzi wa mahusiano ya kuaminika kati ya data za kifedha na zisizo za kifedha", kulingana na taarifa ya AICPA juu ya viwango vya ukaguzi vinavyohusiana na taratibu za uchambuzi. "Utaratibu wa uchambuzi pia unahusisha uchunguzi kama unavyohitajika wa kutofautiana au mahusiano yaliyogunduliwa ambayo hayapatani na habari nyingine muhimu au ambayo hutofautiana na maadili ya kutarajia kwa kiasi kikubwa. "" Kwa maneno mengine, taratibu za uchambuzi ni kipengele muhimu cha sio tu kuelewa data ya kifedha, lakini pia ya alama na utafiti wa kutofautiana." Matokeo yake, wahasibu ni mara nyingi mipango na kutathmini matokeo ya taratibu za uchambuzi. Jifunze zaidi kuhusu kurekodi taratibu za uchambuzi hapa. Katika miradi ya ukaguzi, taratibu za uchambuzi hutumiwa kusaidia kutoa uhakika mdogo kwamba taarifa za kifedha hazihitaji marekebisho ya muhimu. Kwa mfano, wahasibu kuendeleza thamani ya kutarajia kuhusu uwiano mbalimbali wa kifedha, kulingana na uelewa wa wahasibu wa kampuni na sekta ya mwenendo, kama vile uelewa wa wahasibu wa maeneo ya uwezekano wa kuongezeka kwa hatari ya misstatement. Katika kazi za ukaguzi, kulingana na taarifa ya AICPA, sehemu ya 329, taratibu za uchambuzi hutumiwa kusaidia katika kupanga asili, wakati na kiwango cha taratibu nyingine za ukaguzi, kama mtihani wa msingi wa kupata ushahidi wa ukaguzi kuhusu madai maalum yanayohusiana na mabaki ya akaunti au aina za shughuli, na kama ukaguzi wa jumla wa habari za kifedha katika hatua ya mwisho ya ukaguzi. Kwa maneno mengine, taratibu za uchambuzi hutumiwa katika kazi yote ya ukaguzi - katika mipango ya ukaguzi, utekelezaji na ukaguzi. Kama matokeo ya umuhimu wao, kuendeleza na kumbukumbu taratibu za uchambuzi inaweza kutumia muda mwingi. Baadhi ya wahasibu kutumia programu ya kurahisisha uchambuzi wa awali kwa ajili ya ukaguzi na ukaguzi na standardize taratibu za uchambuzi. Kwa njia hii, teknolojia inaweza kuruhusu mhasibu kuwa na muda zaidi inapatikana kuangalia hali ya jumla ya fedha mteja, na katika maadili ambayo inaweza kuwa nje ya mstari. Ili kujifunza zaidi kuhusu standardizing taratibu za uchambuzi na ProfitCents, ombi habari hapa.