ACIS 4414 Chapter Notes - Chapter 5-8: Capacity Utilization, Historical Cost, Scienter

• School: Virginia Tech
• Department: Accounting and Information Systems
• Course: ACIS 4414
• Professor: G.Jenkins

Document Summary

Definition: evaluations of financial info through analysis of plausible relationships among financial & nonfinancial data. Nature of data used in analytics: operational: # of rooms, financial: cost per patient. Identify potential sources of risk of material misstatement (romm) (planning) Helps identify potential for misstatement, not detect them lol: better allocate audit effort and resources (planning, disaggregate data for testing (testing) Greater reliance on analytics, greater need to disaggregate: are there relationships/changes that you still don"t understand? (wrap. Final check on reasonableness of f/s numbers. Have to use analytical procedures in planning & wrap up: address going concern is secondary purpose in planning & wrap up. Knowing industry helps figure out risk of failure. But comparisons might not be meaningful because of diff business lines & accounting methods: similar prior period data, client-determined expected results. Was info changed to fit budget: auditor determined expected results. Calculate expected balance to compare to actual.