Investigating the use of analytical procedures: An update and extension

The importance of analytical procedures (AP) in the audit examination is evidenced by their extensive use by auditors. Previous research efforts are updated by surveying practicing auditors to identify the current use of 6 APs. This includes an investigation of the following: 1. the use of APs in audits conducted by both large and smaller certified public accountant (CPA) firms, and 2. the relative importance of several factors influencing the use of APs. The results of this study indicate that auditors utilize relatively simple APs in the audit examination compared to more sophisticated APs. In addition, APs appear to be used extensively in the planning, substantive testing and review stages of the audit examination. It appears that auditors consider the use of APs to be appropriate for recurring audit engagements, clients with an effective internal control structures, and accounts having a low risk of material misstatement.