Analytical procedures are an important part of the audit process and consist of evaluations of financial information made by the study of plausible relationships among both financial and nonfinancial data. Analytical procedures are used to assist in planning other auditing procedures, as substantive tests in obtaining evidential matter, and as an overall review of the financial information.

Required:

a. Describe the factors that influence an auditor's decision to select analytical procedures as substantive tests, including the factors that affect their effectiveness and efficiency.

b. Describe an auditor's objectives in applying analytical procedures in the overall review stage of an audit and which analytical procedures generally would be included in the overall review stage.