Determine the factors of auditors, Financial Management

Determine the factors of auditors

When anticipating to apply analytical review as a substantive procedure, auditors determine a number of factors like:


Impact on use

Plausibility/predictability of relationships

If relationship is strong (for example commission on sales) analytical procedure may suffice.

Degree of disaggregation of available


Procedures are more effective when applied to components.

Availability of financial and non-financial


Independently prepared non-financial data will allow more effective procedures.

Relevance of information

Budgets which are based on expectation are more useful than targets.

Comparability of information

Broad industry data (for example RPI) mayn't be relevant to specialised industry.

Knowledge gained previously

Effective procedures are based on recognising unexpected/unusual variations.

If knowledge is limited, it's difficult to know what to expect.

Reliability of various forms of data

If data used is unreliable, then any results are equally unreliable hence procedures less effective.

Nature of enterprise and its operations

Some businesses lend themselves to analytical procedures as steady trends develop therefore easier to know what to expect and spot variations.


Posted Date: 9/3/2013 5:05:24 AM | Location : United States

Related Discussions:- Determine the factors of auditors, Assignment Help, Ask Question on Determine the factors of auditors, Get Answer, Expert's Help, Determine the factors of auditors Discussions

Write discussion on Determine the factors of auditors
Your posts are moderated
Related Questions
What is the time value of money? The time value of money signifies that money you hold in your hand today is worth more than money you expect to receive in the future. Likewise

Explain the significant feature of the wealth maximisation The significant feature of the wealth maximisation criterion is that it considers is that it considers both the quali

Q. Definition of Capital Budgeting? Capital Budgeting is the procedure of making decisions for investment in long-term assets. It is a method of deciding whether or not to inve

A Video Rental store has two employees. The Supervisor is paid $2,200 per month. The other employee, Mark is paid $1,200 per month. In addition, Mark is paid a commission of 20 cen

Prepare your recommendation on Agarwal Cast Company

a. You only need to complete the 2012 column, leave the 2011 column as is. b. Base you net income and certain other information needed from the income statement you completed in

Significance of Secondary Markets: High liquidity and constant demand in the market need a diversified investor base with different preferences of demand, maturity and risk. Ap

Role of Financial Intermediaries in the financial system: Having designed the instrument, the issuer should then ensure that these financial assets reach the ultimate investor

Types of Financial Assets Majority of financial assets used worldwide are in the form of deposits, stocks and debt. Deposits Deposits can be made either with banking or

Critical investment decisions may be taken based on the ratings offered by the credit rating agency. In order to ensure that the rating leads to good investment d