Analytical Procedures in Audit: AICPA and PCAOB Standards

The AICPA's main standard that addresses the use of analytical procedures is SAS 122, AU-C Section 520,Analytical Procedures. One of their standards that discuss the use of analytical procedures to provide substantive evidence is SAS 122, 135, 140, AU-C Section 930,Interim Financial Reporting, paragraph A13. Another section of a standard on using analytical procedures for substantive evidence is SAS 122, AU-C Section 520,Analytical Procedures, paragraphs A7 and A9. A third standard with a section for substantive evidence is SAS 142, AU-C Section 500,Audit Evidence, paragraphs A59 and A61. The PCAOB's main standard that addresses the use of analytical procedures is AS 2305,Substantive Analytical Procedures. One section of a standard that discusses the use of analytical procedures to provide substantive evidence is AS 1105,Audit Evidence, paragraph 21. Another section of a standard on using analytical procedures for substantive evidence is AS 2301,The Auditor's Responses to the Risks of Material Misstatement, paragraph 23. Both planning analytical procedures and substantive analytical procedures are used to assess the accuracy and completeness of financial statements. That being said, there are many similarities and differences between the two. The first way they are similar is that they both are used to compare current financial data to historical data or industry benchmarks to identify trends or deviations. Another similarity is that they are both used to gather evidence to support the auditor's opinion on the financial statements. Although they have a lot in common, there are also differences between the two. First, they are used in different stages of the audit, with the planning analytical procedures being used during the planning phase and the substantive analytical procedures being used during the internal control testing phase. Another difference is that the results of the planning analytical procedures are used to determine the nature and scope of the substantive analytical procedures.