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Tip 1: Enhance your preliminary analytical review procedures

Article author
Jonathon Plowman-Samson
  • Updated

Summary

Learn how to enhance your preliminary analytical review procedures.




How does this add value to your audit?

Visualize changes in the financials

Analyzing multiple periods allows you to visualize trends of balances, flows of transactions, and key ratios over time. If 5 years of client data is available, “expected ranges” will also be available for key ratios on the visualizations, whereby actual results outside of these ranges are exposed for investigation.

By grounding the preliminary analytical procedures in a broader assessment of trends in the business and relevant key performance indicators (i.e., ratios), the result is a more operationally relevant assessment of what’s changed in the financials.

Risk scoring

By risk scoring and stratifying all transactions in the general ledger by High, Medium, and Low risk on the Risk Overview dashboard, you can see transaction risk broken down over time, as well as risk at the account level.

These high-value graphs allow you to flag certain accounts (and their transactions, via an easy drill-down feature) to focus on, and consider risk as another “data point” together with year-over-year trends.

Quick high level understanding

Using the data table to interrogate the detail of certain accounts and “scan” the transactions, you’re able to better understand an explanation provided by the client or get a sense of what types of transactions are contributing to a certain observed high-level variance or an increased account-level risk score from previous years.


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