This SAS covers the auditor’s use of analytical procedures as substantive procedures (substantive analytical procedures) and his or her responsibility to perform analytical procedures near the end of the audit that assist the auditor when forming an overall conclusion on the financial statements. This clarified SAS refers to two other clarified SASs, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement (Redrafted) and Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained (Redrafted). These two SASs contain information on the use of analytical procedures as risk assessment procedures and the nature, timing, and extent of audit procedures in response to assessed risks.
You’ll recall that clarified SASs contain “objectives.” These objectives have to do with the objectives of the auditor. In this clarified SAS those objectives are:
- to obtain relevant and reliable audit evidence when using substantive analytical procedures and
- to design and perform analytical procedures near the end of the audit that assist the auditor when forming an overall conclusion about whether the financial statements are consistent with the auditor’s understanding of the entity.
You may download clarified auditing standards from the AICPA website www.aicpa.org/InterestAreas/AccountingAndAuditing/Resources.
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