Designing and performing effective analytical procedures

One of the most common review engagement issues noted in peer review is deficiencies in the performance and documentation of analytical procedures. Analytical procedures involve the study, comparison, and evaluation of relationships among financial and nonfinancial data at a point in time and the trend in those relationships over a period of time. A basic premise underlying analytical procedures is that plausible relationships among data may reasonably be expected to exist in the absence of known conditions to the contrary. This report provides practical guidance on performing effective analytical procedures in accordance with professional standards.