Statement on auditing standards, 023

              Statement on
Auditing Standards
Issued by the Auditing Standards Executive Committee
AICPA American Institute of
Certified Public Accountants
October 1978 23
Analytical Review Procedures
1. This Statement applies to analytical review procedures in an
examination made in accordance with generally accepted auditing
standards. 1 It provides guidance for consideration by the auditor
when he applies such procedures, but no specific analytical review
procedures are required by this Statement.
2. Analytical review procedures are substantive tests of financial
information made by a study and comparison of relationships among
data. The auditor's reliance on substantive tests may be derived
from tests of details of transactions and balances, from analytical
review procedures, or from any combination of both. That decision
is a matter of the auditor's judgment of the expected effectiveness
and efficiency of the respective types of procedures ( see SAS No. 1,
section 320.73).
3. A basic premise underlying the application of analytical re­view
procedures is that relationships among data may reasonably
be expected by the auditor to exist and continue in the absence of
known conditions to the contrary. The presence of those relation-
1 This Statement amends the first sentence of section 320.70 of SAS No. 1 to read
as follows:
The evidential matter required by the third standard is obtained through
two general classes of auditing procedures: ( a) tests of details of transac­tions
and balances and ( b) analytical review procedures applied to financial
information.
Copyright © 1978 by the
American Institute of Certified Public Accountants, Inc.
1211 Avenue of the Americas, New York, N. Y. 10036