ANALYTICAL PROCEDURE Definition

Bookmark and Share

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.

Learn new Accounting Terms

FLASH REPORT provides highlights of key information promptly to the responsible managerial accountant; also called EXCEPTION REPORT.

ASB see ACCOUNTING STANDARDS BOARD.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.