Discussant's response to analytical auditing: A status report;

              Discussant's Response to
Analytical Auditing: A Status Report
Donald R. Nichols
University of Kansas
I have been an admirer of Rod Anderson's work in analytical auditing and statistical sampling in auditing for quite some time. The current paper has not affected that view. The explicit purposes for the paper were to provide: a) a historical overview of the development of "Analytical Auditing," b) reasons for the initial experimentation, c) the nature and purpose of subsequent modifica­tions
and d) a current evaluation of its success in practice. Each of these topics was considered in the paper, and as a result, we now have considerable insight into how and why analytical auditing was developed and also information about its current status. Anderson has done an admirable job in achieving the ob­jectives
set forth for the paper.
My comments are primarily directed toward providing 1) an historical perspective on "analytical" and "conventional" auditing to identify the former's contribution to auditing thought and 2) a comparison of current analytical and conventional auditing to identify remaining differences.
Two Basic Contentions
Two basic contentions stated in my paper are that 1) analytical auditing, when originally introduced, was an innovative and important contribution to auditing thought and practice and 2) that the concepts and procedures of ana­lytical
auditing and conventional auditing have evolved so that, in most respects, they are currently virtually identical.
In order to support the first contention, the concept of analytical auditing will be compared and contrasted with apparent prevailing conventional auditing concepts and principles existing at the time of its introduction. Sources for this comparison are the Skinner and Anderson book of 19661 and several Anderson articles2 for analytical auditing. Since a single, complete description of the pre­vailing
conventional auditing concepts and principles in the early 1960's does not exist, this concept was derived from Auditing Standards and Procedures,3 which was codified in 1963, and a summary review of journal articles and auditing textbooks available during the early to mid sixties, supplemented by my own limited experience during those years. The possibility of errors in description of the concepts and principles exists for both auditing approaches, and major differences in application undoubtedly exist both between and within specific firms. Thus, the descriptions are generalities, not necessarily accurate for any specific firm or auditor. Each approach will be discussed in the context
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