Analytical procedures
Analytical procedures are a type of audit technique used by auditors to evaluate financial information. They involve the examination of relationships among both financial and non-financial data, and are used to identify potential misstatements or discrepancies in the financial statements. Analytical procedures can include comparisons of financial data to industry averages, trend analysis , and ratio analysis , among others. They are often used as a risk assessment tool by auditors to identify areas where further testing is needed. An example of an analytical procedure would be a trend analysis, where the auditor compares financial data from the current year to previous years in order to identify any unusual patterns or fluctuations. For example , if the company's sales have consistently increased by 10% each year, but in the current year sales only increased by 5%, the auditor may investigate why this deviation from the trend occurred. Another example would be ratio analysis, w
