The use of analytical procedures by external auditors in Canada
Document Type
Journal article
Source Publication
Journal of International Accounting, Auditing and Taxation
Publication Date
2003
Volume
12
Issue
2
First Page
153
Last Page
168
Keywords
Analytical procedures; Auditing standards; Audit effectiveness; Audit efficiency
Abstract
The Enron debacle and other scandals highlight the issue of whether analytical procedures (APs) or more traditional audit approaches based on substantive testing are more appropriate. This paper surveys the use of APs by Canadian external auditors and augments understanding of the impact of auditing standards on professional practice. Our results demonstrate that APs are extensively applied in practice, particularly by larger firms, and that their use dominates the final review stage of the audit regardless of firm size. While standards do not appear to be an important influence upon practice for audit firms in general, this is not the case for smaller firms. Though auditors place more reliance on APs to reduce tests of detail, there are limits to this reliance. Our results indicate that while auditors may have increased their use of APs with the expectation of efficiency gains, these may be realized at present only partially.
DOI
10.1016/j.intaccaudtax.2003.08.002
Print ISSN
10619518
E-ISSN
18791603
Publisher Statement
Copyright © 2003 Elsevier
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Lin, K. Z., & Fraser, I. A. M. (2003). The use of analytical procedures by external auditors in Canada. Journal of International Accounting, Auditing and Taxation, 12(2), 153-168. doi: 10.1016/j.intaccaudtax.2003.08.002