Research on the Lssues of Analytical Procedure Using in Audit Practice
|School||Dongbei University of Finance|
|Keywords||Analytical Procedure Risk Assessment Procedure SubstantiveProcedure Overall Review Procedure|
With the development of the times, the scale of enterprises is expanding and the business is more complex, the public has raised higher request to the Certified Public Accountants. The change of the economy promotes the development of audit model, and the detailed audit has developed to the risk-oriented audit. On the modern risk-based and audit-oriented model, auditors put more attention to assess and evaluate the risk, and one of the most important characteristics of the modern risk-based and audit-oriented model is focus on the use of analytical procedures.Using analytical procedure can save the audit resources and improve the auditing efficiency with a high audit quality. As the analytical procedure needs a lot of professional judgment, it can help auditors take full advantages of their experience and creativity.In1987, American Institute of Certified Public Accountants identified Analytical review procedure as:through researching, use procedures to financial information and analyze the relationship of data and information. In2006, Certified public accountant criterion1313-Analyze Procedure identified analytical procedure as through analyzing the relationship of the financial information, and the internal relationship of financial information and non financial information, assessing the financial information. Although the study of analytical procedure never stops, there are only a few related papers and other information, and most of them are focus on the basic theory, using condition and the main methods.As one of the most important audit procedures, analytical procedure runs throughout the entire audit process, and is widely used in the process of risk assessment, procedures and substantive procedures. Analytical procedure having its own applicative condition, that only when there is a expected relationship among the information which is going to be analyzed and the relationship will keep existing, the auditor could use analytical procedure. Therefore, when using analytical procedure during risk assessment, substantive procedure and overall review procedure, the aim, characteristic and the applicative methods are different.In the process of risk assessment, using analytical procedures aims to find the abnormal issues which may cause the risk of material misstatement, and auditors should pay attention to the aggregate data and the assurance level. In substantive procedures, the object of using analytical procedures is effectively finding material misstatements and auditors should focus on the applicability of specific assertion, reliability of data, the precision of the expected data, and the acceptable difference. In the process of overall review, the aim of using analytical procedure is assessing the rationality of the financial statements and the audit conclusion, and the auditors should notice that analytical procedures are mainly used on the financial statement level.Based on the background mentioned above, mainly using the method of normative research, this paper combines the development condition of analytical procedure and analyses the significance of the study. With the domestic and overseas research, summarizing the factors that should be considers and the methods that can be used when using analytical procedures in audit practice. Combining specific cases, this paper studies the aims, characteristics and the applicative methods of analytical procedures respectively when used in risk assessment, substantive procedure and overall review procedure. Point out the issues that auditors should pay attention to when using analytical procedures on around of the effect of the environment to the applicability of the analytical procedure, the combination of different analytical methods, the relationship between financial information and other information and the handling of the material inconsistencies. Also, this paper summarizes the limitation of analytical procedures and recommends the countermeasures in order to make contributions to the research and development of analytical procedures.