What is Analytical procedures?

A test method in which the auditor compares financial information with other data and analyses the logical relationship between them. Under the international standard on auditing (ISA 520), they are evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. The idea is simple: unless there is a clear cause, relationships between data persist over time. The auditor first forms their own expectation (for example, revenue should grow in line with the volume sold), then compares it with the figure in the report. If a large difference appears between the expected and actual value, or the relationship contradicts other data, the auditor must investigate the cause. The procedures are used both in risk assessment and in substantive testing. On their own they do not always prove that the amount being tested is correct: more often they show where to look deeper.

Source: Xalqaro audit standarti (XAS) 520 "Analitik protseduralar"; ACCA: Analytical procedures