Analytical procedures include ratio analysis, comparisons with prior periods and budgets, and expectation models. For example, whether total staff costs are reasonable can be tested from headcount and average salary.
These procedures are used at the planning stage to identify risk areas, during the audit as substantive procedures, and at the end of the audit for the overall review.
Source: BDS 520
Related terms
Substantive proceduresTests of details and analytical procedures performed on account balances, transactions and disclosures to detect material misstatements in the financial statements.Audit evidenceAny information and documents the auditor uses to reach the conclusions on which the opinion is based.Review of interim financial informationAn engagement in which interim financial information is reviewed, mainly through inquiry and analytical procedures, and negative assurance is provided.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Assurance engagementAn engagement providing assurance, against specified criteria, on a subject matter other than an audit or review of historical financial information.
Last updated: October 22, 2026 · This definition is for general information only.