TITLE

Audit Analytical Procedures: A Field Investigation

AUTHOR(S)
Hirst, D. Eric; Koonce, Lisa
PUB. DATE
September 1996
SOURCE
Contemporary Accounting Research;Fall1996, Vol. 13 Issue 2, p457
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Analytical procedures have become an increasingly important part of financial statement auditing over the last 10 years. First recommended for audits by the Auditing Standards Board in 1978, analytical procedures are mandated for planning and overall review purposes by Statement on Auditing Standards (SAS) No. 56. In response to increased concerns about audit efficiency and effectiveness, analytical procedures are increasingly being used in place of and as a supplement to substantive tests of details. Despite their increased use, little is known about how analytical procedures are performed in practice. The purpose of this study is to describe how auditors perform analytical procedures at the planning, substantive testing, and overall review stages of the audit. To accomplish this, we conducted a series of interviews with 36 audit professionals at various levels of experience and responsibility (i.e., seniors, managers, and partners) representing all the U.S. Big Six accounting firms. The contributions of our study are threefold. First, by contributing to a more complete understanding of how analytical procedures are performed, we provide the basis for accounting researchers to identify current analytical procedure problems/issues and, thus, perform more relevant research. Second, we provide the Auditing Standards Board members with relevant information about current practice for their deliberations on revised guidance for analytical procedures. Third, we provide educators with a characterization of analytical procedures as performed in practice, thereby facilitating their classroom coverage of this important topic.
ACCESSION #
10986361

 

Related Articles

  • IFRS guidance issued for auditors.  // Accountancy;Sep2004, Vol. 134 Issue 1333, p14 

    The article focuses on guidance for auditors related to financial statements. The ICAEW's Audit and Assurance Faculty has launched new guidance for auditors on International Financial Reporting Standards (IFRS). The guidance is designed to help auditors think about the challenges they will face...

  • Predicting Impending Bankruptcy From Auditor Qualified Opinions And Audit Firm Changes. Senteney, David L.; Chen, Yinning; Gupta, Ashok // Journal of Applied Business Research;First Quarter 2006, Vol. 22 Issue 1, p41 

    Unlike prior research, we investigate the incremental explanatory power of both auditor qualified opinions and auditor changes beyond the information conveyed by traditional financial statement ratios in predicting bankruptcy. We find that qualified auditor opinion and auditor changes are both...

  • On a Problem in Standards of Auditing From the Viewpoint of Statistical Practice. Deming, W. Edwards // Journal of Accounting, Auditing & Finance;Spring79, Vol. 2 Issue 3, p197 

    Every auditor relying on tests to form an opinion on a set of financial statements faces the possibility that he used a poor method of sampling or that he examined an insufficient number of transactions. Statistical theory has, therefore, been drawn upon to assist practicing auditors in the ex...

  • Audit-Firm Tenure and the Quality of Financial Reports. Johnson, Van E.; Khurana, Inder K.; Reynolds, J. Kenneth // Contemporary Accounting Research;Winter2002, Vol. 19 Issue 4, p637 

    This study examines whether the length of the relationship between a company and an audit firm (audit-firm tenure) is associated with financial-reporting quality. Using two proxies for financial-reporting quality and a sample of Big 6 clients matched on industry and size, we find that relative...

  • Auditor Commitment to Privately Held Clients and its Effect on Value-Added Audit Service. Herda, David N.; Lavelle, James J. // Auditing;Feb2013, Vol. 32 Issue 1, p113 

    This study examines auditor commitment to clients and how it affects the level of value-added audit service (e.g., management letter comments) provided to the clients. Our research model is based on social exchange theory. Using a sample of 204 auditors at two public accounting firms that...

  • Auditors As Advocates For Their Clients: Perceptions Of The Auditor-Client Relationship. Jenkins, J. Gregory; Lowe, D. Jordan // Journal of Applied Business Research;Spring99, Vol. 15 Issue 2, p73 

    Reports on the result of a survey of an accounting firm's auditing managers and senior managers regarding the issue of advocacy as it relates to audit clients and auditors' perceptions of business relationships with their clients. Details on the survey; Auditor-client relationships; Discussion...

  • Evaluating the Materiality of Errors in Financial Statements. Landsittel, David L.; Serlin, Jerry E. // Journal of Accounting, Auditing & Finance;Summer82, Vol. 5 Issue 4, p291 

    Authoritative auditing literature deals with materiality only in general terms, acknowledging that it is inherent in the work of the independent auditor but not clearly specifying the relationship between materiality considerations and audit effort. This article classifies the different types of...

  • Reporting Materiality for Investors. Wright, Gail B.; Taylor, Robert D. // Journal of Accounting, Auditing & Finance;Summer82, Vol. 5 Issue 4, p301 

    In a setting of numerous unsuccessful professional attempts to define materiality criteria and in light of several court decisions which held auditors liable for material misstatements in published financial statements, investors find themselves uncertain as to what is not explicitly reported in...

  • How the Auditor-Client Relationship Affects the Extent of Value-Added Service Provided to the Client. Herda, David N.; Lavelle, James J. // Current Issues in Auditing;2013, Vol. 7 Issue 1, pP9 

    This article summarizes our recent study, ''Auditor Commitment to Privately Held Clients and its Effect on Value-Added Audit Service'' (Herda and Lavelle 2013), which examines how the relationship between individual auditors and their clients affects the extent of value-added services that...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sign out of this library

Other Topics