Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data. They range from simple comparisons to the use of complex models involving many relationships and elements of data. They involve comparisons of recorded amounts, or ratios developed from recorded amounts, to expectations developed by the auditors. Read the requirements. Requirements Requirement a. Describe the broad purposes of analytical procedures. The purposes of analytical procedures are: a. Describe the broad purposes of analytical procedures. b. When are analytical procedures required during an audit? Explain why auditors use analytical procedures extensively in all parts of the audit. Describe the factors that influence the extent to which an auditor will use the results of analytical procedures to reduce detailed tests in meeting audit objectives.* *AICPA adapted. Ascertain the effectiveness of the entity's internal controls. Assessment of the entity's ability to continue as a going concern. Determine the appropriate sample size for the population. Indication of the presence of possible misstatements in the financial statements. Provide a basis for review by supervisors and partners. Reduction of detailed audit tests. Understanding the client's business and industry. Print Done