Business, Legal & Accounting Glossary
Analytical review is an auditing procedure that uses ratios to determine whether any significant changes have taken place.
An analytical review is an auditing test used to gather evidence of the validity, completeness and accuracy of financial statements and accounting records.
An analytical review is a kind of substantive test which can be used in the planning of or undertaking of an audit and is used by auditors to assess the reasonableness of account balances.
An Analytical review works by comparing data, figures, financial and non-financial data, either externally or internally to determine whether said data and figures are reasonable.
The procedure used may vary, it could simply be a comparison of data, for example comparing the amount held in a current account with that held in the same current account last year. Or it could be a more sophisticated procedure which uses computer auditing software as well as advanced statistical procedures, for example, using multiple regression analysis.
A CPA does this by comparing changes in account balances over time, as well as by comparing related accounts.
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This glossary post was last updated: 22nd November, 2021 | 0 Views.