What is an Analytical Review?
Analytical review is an audit procedure that examines financial information by studying plausible relationships among data.
Auditors use this technique to identify unusual trends, inconsistencies, or fluctuations that may indicate errors or require further investigation. Common methods include ratio analysis, trend analysis, and comparisons between current and prior periods or against industry benchmarks.
Analytical reviews helps auditors assess the reasonableness of financial statements efficiently, directing detailed testing toward high-risk areas. Modern accounting software often incorporates automated analytical review capabilities, enabling real-time monitoring and more comprehensive financial analysis throughout the audit engagement.
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