What does analytical procedures mean on the CPA exam?
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Analytical procedures. Evaluations of financial information by studying plausible relationships among financial and nonfinancial data. Required twice, once as a risk assessment procedure and once near the end of the audit. Using them as a substantive test is optional.
Defined against AU-C 520.04, .06.
Which CPA exam sections use analytical procedures?
Analytical procedures appears in the AUD section of the CPA exam.
Related terms
- risk assessment procedures: The audit procedures designed and performed to identify and assess the risks of material misstatement at the financial statement and assertion levels.
- audit procedures: The specific work performed: inspection, observation, inquiry, confirmation, recalculation, reperformance and analytical procedures.
- further audit procedures: The work done in response to assessed risk: tests of controls and substantive procedures.
- tests of details: Substantive procedures aimed at individual transactions, balances or disclosures, rather than at the relationships between numbers that analytical procedures examine.
- substantive procedures: Work aimed directly at detecting misstatement in a balance or disclosure, as opposed to testing whether a control operated.
- nature, timing, and extent: The three dials on any audit procedure: what kind of test, when it is run, and how much of the population it covers.