Refer to the Standards Appendix at the end of this text. Identify the relevant auditing standards (PCAOB, AICPA, and IAASB) concerning using analytical procedures as a substantive test. Locate the standards on each organization's web site.
a. What is a basic premise underlying analytical procedures that is mentioned in all relevant professional guidance?
b. What types of documentation are appropriate for substantive analytical procedures?
c. Why might using substantive analytical procedures help auditors save time on the audit and achieve efficiencies? Why might auditors get criticized for using substantive analytical procedures as opposed to substantive tests of details?