ANALYTICAL PROCEDURE Definition

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ANALYTICAL PROCEDURE is a comparison of financial statement amounts with an auditor's expectation. An example is to compare actual interest expense for the year (a financial statement amount) with an estimate of what that interest expense should be. The estimate can be found by multiplying a reasonable interest rate times the average balance of interest bearing debt outstanding during the year (the auditor's expectation). If actual interest expense differs significantly from the expectation, the auditor explains the difference in audit documentation.

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CONTROLLERSHIP is the position of controller. See CONTROLLER.

INTERNATIONAL ACCOUNTING STANDARDS BOARD (IASB), based in London, UK. The IASB is responsible for setting International Financial Reporting Standards. The IASB hopes that through the creation of international standards, it makes one set of financial statements more compatible with the rest of the world. Currently, a companys financial report would be different for each country based on local generally accepted accounting principles. There are fourteen members of the IASB, of whom twelve are full-time members (ie employed only by the IASB). Five members must be former auditors, three former preparers of accounts, three former users of accounts and one an academic. The remaining two may be of any of these, or other, backgrounds. The non-profit organization IASC Foundation, incorporated in March 2001 in Delaware, US is the parental body of the IASB. The IASC Foundation is also the parent of the Standards Advisory Council and the International Financial Reporting Interpretations Committee.

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