analytical review

analytical review
An auditing technique that focuses on analysis of the movements in *account balances over time, and on assessing the *reasonableness of financial statement items. At the level of financial statements, an auditor’s analytical review typically focuses on changes over time in high-level balances and ratios. It also includes assessments of the interrelationships between items in financial statements. For example, if an organization’s *revenues double in size from one *financial reporting period to the next, then (all things being equal) one would expect the level of *accounts receivable to increase significantly between the two time periods. If accounts receivable did not follow the trend of revenues, analytical review might highlight this apparent inconsistency as an area for further investigation. The analytical review of financial statements may also comprise comparisons with the financial data of similar organizations - for example, an industry average of payroll cost per employee is a common *benchmark to assess the reasonableness of payroll costs. At the level of the *general ledger, analytical review procedures typically involve a scanning of entries in an account for evidence of unusual items, and the analysis of *variances between actual and budgeted balances. Auditors’ analytical review procedures are intended to highlight potential, *material *misstatements in the general ledger or in financial statements. As a high-level audit technique, analytical review usually raises (rather than answers) questions, and therefore tends to be a means of identifying areas for further review. For this reason, analytical review is often a key element in the *audit planning process, though it is considered a valuable *substantive auditing test in its own right. Further reading: Glover et al. (2000); Lin et al. (2003)

Auditor's dictionary. 2014.

Игры ⚽ Поможем написать курсовую

Look at other dictionaries:

  • Analytical Review — Saltar a navegación, búsqueda Analytical Review Joseph Johnson, co fundador del Analytical Review …   Wikipedia Español

  • Analytical Review — Langue Anglais Fondateur Joseph Johnson et Thomas Christie Date de fondation 1788 Éditeur Londres …   Wikipédia en Français

  • Analytical Review — right|thumb|Joseph Johnson, co founder of the Analytical Review (engraving by William Sharp after a painting by Moses Haughton) The Analytical Review was a periodical established in London in 1788 by the publisher Joseph Johnson and the writer… …   Wikipedia

  • analytical review — An audit test designed to provide evidence of the completeness, accuracy, and validity of accounting records and financial statements. Analytical review is a type of substantive test that may be used in planning and undertaking an audit. It works …   Accounting dictionary

  • analytical review — noun an auditing procedure based on ratios among accounts and tries to identify significant changes • Hypernyms: ↑review, ↑limited review …   Useful english dictionary

  • analytical auditing — An analytical approach to an audit that compares figures and other financial and non financial data, either internally or with external data, to decide whether the picture presented appears to be reasonable. Analytical auditing is used in the… …   Accounting dictionary

  • review — 1. A formal assessment of an activity with the intention of suggesting or implementing changes. In the context of external auditing, a review implies an audit type investigation that does not meet the full requirements of *Generally Accepted… …   Auditor's dictionary

  • Analytical Marxism — refers to a particular Marxist approach that was prominent amongst English speaking philosophers and social scientists during the 1980s. It was mainly associated with the September Group of academics, so called because of their biennial September …   Wikipedia

  • Analytical Chemistry — Beschreibung Peer Review Fachzeitschrift Fachgebiet Analytische Chemie Sprache Englisch …   Deutsch Wikipedia

  • Analytical Chemistry Insights — [http://la id=1] is a peer reviewed open access academic journal focussing on analytical chemistry. The journal is published by Libertas Academica [http://la] . Aims and Scope Analytical Chemistry Insights… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”