Analytical Procedures - Audit Guide (2025)

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Better audit engagements start with good analytical procedures

Analytical procedures are a key part of the audit process. This guide contains core takeaways from applicable standards and other technical sources. It summarizes the auditor’s requirements and delivers how-to advice and examples for handling the four phases of performing analytical procedures:

• Forming an expectation
• Identification of unusual differences from expectations
• Investigation of the causes
• Evaluation of the likelihood of material misstatement and determination of further audit procedures

A case study is included to illustrate the use of analytical procedures, demonstrating real-world applications of the guidance.

Edition updates

This guide has been revised for:

• SAS No. 142, Audit Evidence
• SAS No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement

Key Topics

• Planning and substantive testing
• Key provisions of the risk assessment standards
• Trend analysis, ratio analysis, reasonableness testing, and regression analysis
• Case study illustrating the four types of expectation methods
• Financial ratios

Who Will Benefit

Practitioners who perform audit engagements