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The Use of Analytical Procedures in the United Kingdom
Author(s) -
Mulligan Christina,
Inkster Nicola
Publication year - 1999
Publication title -
international journal of auditing
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.583
H-Index - 21
eISSN - 1099-1123
pISSN - 1090-6738
DOI - 10.1111/1099-1123.00052
Subject(s) - audit , accounting , analytical procedures , business , audit plan , external auditor , sample (material) , audit risk , actuarial science , joint audit , risk analysis (engineering) , internal audit , chemistry , chromatography
Statement of Auditing Standard (SAS) 410 requires auditors to apply analytical procedures at the planning and overall review stages of the audit. This paper reports on a questionnaire completed by audit partners in the United Kingdom (UK), investigating their usage of analytical procedures in the external audit. Results suggest that analytical procedures are used extensively in practice, particularly by Big 6 and large firms. However, simple techniques continue to dominate practice, particularly in smaller firms, and are considered effective by UK practitioners. This is surprising given that increased use of computers, which should make sophisticated techniques more cost‐effective, is rated highly as an influence on the increased use of analytical procedures. The risk‐based approach to audit is perceived by most respondents as the main factor promoting usage of analytical techniques. Increasingly, practitioners are relying on the results of analytical techniques to justify lower levels of detailed testing.