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:

Factor

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

information

Procedures are more effective when applied to components.

Availability of financial and non-financial

data

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
Differences in working capital for different industries   Manufacturing Retail Service Inventories H

Insider Trading Insider trading refers to dealing in securities by persons who are privy to specific information of companies. This possession of confidential information gives

Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of credit limit that electronics give to Booth Plastics.

FIXED ASSETS                          200 000                       LONG TERM LIABILITIES CURRENT ASSETS CASH             40 000                       LOAN

Q. What do you mean by S Corporation? S Corporation - An S Corporation is a corporation that, under Internal Revenue Code, is normally not subject to federal income taxes. In i

State about the Quick ratio or acid test Quick ratio = Current assets less inventories /Current liabilities(times) This  ratio  measures  immediate  solvency  of  a  busin

What are the types of major types of finance companies? There are three main types of finance companies: a. Sales finance institutions which make loans to customers of a cer

Q. Explain about Modern Approach of financial management? The modern approach considers the term financial management in a broad sense. According to this approach the finance f

What was the first argument against traditional approach The first argument against traditional approach was based on its emphasis on issues relating to procurement of funds by

Tests for Consistency The consistency of the index numbers have been tested over the years. The most important of these tests are: The time reversal test The