AFM415 Chapter Notes -Financial Audit, Larami, Financial Statement

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM415
• Professor: James Wainberg

Document Summary

After completing and discussing this case you should be able to. [1] review and analyze information relating to a. [3] understand how preliminary analytical proce(cid:173) company"s inventory and related accounts dures can help in planning the audit of inventory. [2] identify potential risks and areas requiring a greater amount of substantive audit attention. Analytical procedures can be powerful tools in conducting an audit. They help the auditor understand a client"s business and are useful in identifying potential risks and problem areas requiring greater substantive audit attention. If formulated carefully, they allow the auditor to arrive at a precise expectation of what an account balance ought to be; the balance per the client"s books is then compared against this expectation. Thus, analytics can sometimes provide a source of inexpensive and powerful substantive evidence that complements or even replaces time-consuming detailed testing.