Title

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

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Full-text Version

Publisher’s Version

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