All 18 Analytical Procedures questions
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What are analytical procedures? At what stages of the audit are analytical procedures used? What is ratio analysis in auditing? What is trend analysis? How do analytical procedures help in risk assessment (planning)? What is the difference between analytical procedures and tests of details in simple terms? What is a substantive analytical procedure and when is it appropriate? How do you develop an expectation for analytical procedures? How do you investigate significant fluctuations found by analytical procedures? Why is disaggregation important in analytical procedures?
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Auditing & Assurance › Analytical Procedures

What comparisons are commonly used in analytical procedures?

Beginner

Answer

Common comparisons are: current vs prior periods (trend analysis), actual vs budget/forecast, entity ratios vs industry averages, and relationships between financial and non-financial data (e.g., revenue vs units sold, payroll vs headcount). Each highlights unexpected changes warranting investigation.
Real-world example Comparing payroll cost to headcount reveals an unexpected rise that leads to discovering ghost employees.

Common follow-ups: Why compare financial to non-financial data? | What does actual-vs-budget reveal?

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All 18 Analytical Procedures questions