What Are Analytical Procedures and When Are They Used?


Research Specialist
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Analytical procedures are used by accountants in multiple levels of service, and they are critical to evaluating financial data and variations that occur in financial data. But selecting and documenting analytical procedures are subjective processes, so the area of analytical procedures is one that can cause frustration for accountants. 

Analytical procedures are "evaluations of financial information through analysis of plausible relationships among both financial and nonfinancial data," according to an AICPA statement on audit standards related to analytical procedures. "Analytical procedures also encompass such investigation, as is necessary, of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount." In other words, analytical procedures are an important aspect of not only understanding financial data, but also of flagging and researching inconsistencies. As a result, accountants are often...

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