Modern Analytical Auditing: Practical Guidance for Auditors and Accountants

Analytical auditing - or the generation of audit evidence from an analysis of the relationships among financial and nonfinancial data - is now a widely used technique in audit practice. This volume is intended to help auditors at all experience levels by providing a better understanding of the range of available analytical auditing techniques, the underlying theory supporting these techniques, and the solutions to practical problems in applying these techniques. 16 different practical analytical auditing procedures are discussed and illustrated in detail, including the graphical, average change, and weighted average methods of simple time series analysis; simple reasonableness tests; various structural modelling and ratio analysis techniques. In addition to coverage of key analytical auditing techniques, McKee also presents a comprehensive discussion of evidence theory that will enable auditors to appropriately combine evidence from analytical auditing with evidence from more traditional audit procedures. He reviews the relevant professional auditing standards for all types of auditors, including international auditing standards, those of the American Institute of CPAs, internal auditing standards, and governmental auditing standards. Also, there is an extended discussion and illustrations of computer applications of analytical auditing techniques. Throughout the book, tables and figures illustrate the techniques and concepts presented.