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discuss the use of analytical procedures, what, how, when and why.

discuss the use of analytical procedures, what, how, when and why.

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The analytical procedures are used in the financial audit to help in proper understanding of operations of an entity and for identification of areas of potential risk which need to be addressed. In other words, it is a type of evidence used during the audit. The analytical procedures are performed by the auditors for making a comparison of the financial statements and expected relationships among the financial and non-financial data in an effort to locate the inconsistencies. When there are any fluctuations in the expected data relationships it may indicate the fraudulent or misrepresentation reporting by the company’s management.

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