What is Analytical procedure?

We conducted a short interview on a handful of college students that are not taking any
accounting-related course. Here are their answers to the question “What comes to your mind
when you hear ‘analytical procedures’?”.

“It is a procedure that is well thought of. It should be carefully analyzed before executed.”- Patricia
Endozo, BS Financial Management

“A procedure to be analyzed?” - Vea Magsaysay, BS Legal Management:

“A process analyzed by a researcher.” - Karen Principe, AB in Mass Communication

“A procedure needed to be analyzed.” - Chantel Villanueva, BS Psychology

“These are procedures used to analyze data to be used for comparison and such.”- Jaydee Dalay, BS
Occupational Therapy

“For us chemistry majors, analytical procedures are accurate processes of determination of products,
components, and the like.” Jensine Juanitez, BS Pharmacy

“Just a procedure. That's all.”- Kathlyn Bejosano, BS Business Administration

“Procedures that are analyzed by a professional.” – Marc Arabia, BS Aircraft Maintenance Technology
 What is Analytical procedure?
We conducted a short interview on a handful of certified public accountants and a chartered
financial consultant. Here are their answers to the question “Using your own words, how can
you define the term Analytical procedures?”

“Analytical procedures are set of actions which help the auditor identify key audit items. Analytical
procedures usually makes use of historical data and trends, and through it, uncommon fluctuations can
be observed easily. It usually involves financial ratio analysis.” - Xian Apego, CPA (October 2013)

“Used to asses risk. Anyway, analytical procedure, nag eevaluate ka ng relationship among financial and
non financial information that can indicate risk or unusual transaction.” - Pamela Tondoc, CPA (October
2017)

“It's making use of the relationship of financial (and nonfinancial) info, comparing whats expected and
what is recorded to verify assertions.”- Luella Yasol, CPA (October 2017)

“Analytical Procedures are required in the prelimary phase and wrap up phase of an FS Audit. Analytical
Procedures are used to identify if there are plausible relationships that exist between accounts or data
related to FS. These procedures may also be used to compare financial data within the company or
between a different company.” – Chelsea Cabiling, CPA (October 2017)

“Analytical procedure is a method used to gather audit evidence in order to determine the
reasonableness of the recorded amounts by comparing the relationships between data.”- Tina Acobo,
CPA (October 2016)

“Analytical procedures are used to identify any significant trends or changes in an account which may be
used as basis to determine other audit procedures needed to be performed.”- Paquito Alvez lll , CPA
(October 2016)

“Analytical procedures are one of the essential steps in conducting an audit. It involves using ratios and
patterns in the financial statements to determine the potential errors or misstatements in the said
financial statements of the company. The auditor examines the interrelationships of the accounts using
the said ratios and patterns to see if there are large discrepancies between these amounts and a specific
standard. The result of this examination will be added evidence in the conduct of the audit.” – Aina
Espiritu, CPA (October 2017)

“Analytical procedures are used for the following purposes: a. To assist the auditor in planning the
nature, timing, and extent of other auditing procedures b. As a substantive test to obtain audit evidence
about particular assertions related to account balances or classes of transactions c. As an overall review
of the financial information in the final review stage of the audit.” – Ron Romero, CFA (2005)
“Analytical procedures are the processes employed by the auditor to understand the entity’s business
and (to) identify (other) audit procedures needed to address potential risk areas that may imperil the
entity’s status as a going concern. These include a clear understanding/overview of the entity’s
corporate/organizational structure, business model, systems and procedures in place, regulatory
environment, past performances and root cause of unresolved problems.” - Elbert Jacob, CPA (1985)