What Are The Auditing Procedures?

What are some examples of analytical procedures?

Examples of analytical procedures are as follows:Compare the days sales outstanding metric to the amount for prior years.

Review the current ratio over several reporting periods.

Compare the ending balances in the compensation expense account for several years.

Examine a trend line of bad debt expenses.More items…•.

What are the two types of substantive procedures?

There are two categories of substantive procedures – analytical procedures and tests of detail.

What are the three components of audit risk?

The three basic components of an audit risk model are:Control Risk.Detection Risk.Inherent Risk.

How do you identify audit risks?

4 tips to identify audit client risksDon’t be afraid to ask questions. To plan your audit, you need to identify your client’s specific risks. … Know your client’s industry and their transaction cycles. … Identify your client’s controls. … Evaluate the design and implementation of your client’s controls. … Tracy Harding, CPA, Principal, BerryDunn.

What are the five major types of analytical procedures in auditing?

To obtain audit evidence, the auditor performs one – or a combination – of the following procedures:inspection.observation.external confirmation.inquiry.reperformance.recalculation.analytical procedures.

What are the five process steps to an audit?

There are five phases of our audit process: Selection, Planning, Execution, Reporting, and Follow-Up.

What is audit control procedures?

A test of controls is an audit procedure to test the effectiveness of a control used by a client entity to prevent or detect material misstatements. Depending on the results of this test, auditors may choose to rely upon a client’s system of controls as part of their auditing activities.

What is risk assessment procedures in auditing?

Risk assessment is the foundation of an audit. … Audit risk assessment procedures are performed to obtain an understanding of your company and its environment, including your company’s internal control, to identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error.

What are the four different types of analytical methods?

Depending on the stage of the workflow and the requirement of data analysis, there are four main kinds of analytics – descriptive, diagnostic, predictive and prescriptive.

What is the purpose of analytical procedures in an audit?

Analytical procedures are used for the following purposes: To assist the auditor in planning the nature, timing, and extent of other auditing procedures. As a substantive test to obtain evidential matter about particular assertions related to account balances or classes of transactions.

What are the 5 Steps in risk assessment?

The 5 Steps to Risk Assessment Explained1: Identify the Hazards.2: Decide Who Might Be Harmed and How.3: Evaluate the Risks and Take Action to Prevent Them.4: Record Your Findings.5: Review the Risk Assessment.