Question

• Why does an auditor need to perform analytical analysis and of what?

Answer 1

Auditors need to perform analytical analysis to evaluate the financial information.

To obtain evidential matter about particular assertions related to transactions.

For doing the analytical analysis auditor should have proper knowledge about client business and about transactions and events that are happening at client side.

To identify the areas that may represent specific risks relevant to audit.

Thus in short objective of the analysis is to identify existence of unusual transactions and events

Auditor also need to perform to check the effectiveness and efficiency of available procedures.

Main reason for what auditors should perform analytical analysis is for random fluctuations,misstatements,accounting and business changes,unusual transactions.