Analytical Procedures – Evaluation Techniques for Significant Misrepresentation

Author:Assistant Prof. Monica PETCU , PhD; Assistant Prof. Iulia DAVID-SOBOLEVSCHI, PhD

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Keywords:comparison, correlation, expected level, reasonable variance, significant difference

Abstract:
Considered as audit techniques, the analytical procedures, defined by ISA 520 as evaluations of the financial information based on the study of plausible relations between financial, non-financial information and on comparisons, with the discovery of deviations from the reference levels and the reasonable level of these, allow professional arguments which are relevant during the audit mission. In the planning stage, the analytical procedures allow a strict evaluation of the significant misrepresentation of the risk and an adequate determination of the procedures, process which reiterates at every section`s level in the substantive tests. In the general revision stage, the analytical procedures can make it easier to detect some deviations at the expected levels or oscillations which are not consistent with other relevant information and which call for additional proves in order to express an audit opinion.\r\n The article aims to describe in detail some of the analytical procedures, the adequate comparisons, necessary estimation and to point out the significance these procedures provide for the evaluation of a client in the environment and the field he develops and for the expression of an audit opinion.\r\n

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