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- Why auditors increasingly rely on analytical procedures : an empirical approach in PortugalPublication . Pinho, Carlos; Santos, Paula; Martins, António Eduardo Pais Falcão BarbosaThe increasing sophistication and quantity of transactions considered to be financial facts included in accounting records and financial statements raises additional issues in terms of financial auditing. Finding more corroborating evidence for the claims made in balances, transaction classes and disclosures is naturally made more difficult by the fact that accounting information and financial reports are increasingly complex both in terms of the corroborative strength of the evidence and its quantity. Auditing work therefore relies increasingly on statistical and non-statistical data and on the auditor's use of substantive analytical review procedures, or, to put it briefly, analytical procedures. The conclusions of this empirical study point to the fact that, in general terms, the increasing use of analytical procedures stems from a risk-based approach to auditing together with reasons that have to do with time pressure and the need to carry out more efficient audits with fewer substantive detail tests as well as improvements in the interpretation of standards applicable to auditing work
- Analytical procedures: are they useful for auditing purposes? An Iberian Peninsula approachPublication . Pinho, Carlos; Santos, Paula; Martinho, CarlaThe use of analytical audit procedures has been reinforced in view of the increase in the number and complexity of transactions of the audited entities. Previous studies indicate that its use is more significant in the planning and opinion formation phases. Even so, the growing use of software to support audit work has reinforced its usefulness in the phase of collecting audit evidence. To complement those conclusions, the investigation of this article is: in which areas analytical procedures are more suitable for use as evidence gathering? In fact, several studies have been carried out to understand the usefulness of analytical procedures during the different steps of a financial audit, but there is a lack of studies concerning in what financial statements / auditing areas such procedures are more likely to be useful. This study focused on a survey carried out with auditing partners from Big4 audit firms in the Iberian Peninsula, in order to obtain their perception of the areas of work in which analytical procedures are most frequently used as evidence collection. The results obtained, based on statistical descriptive analysis and confidence intervals prepared at a 95% level of confidence, point to the fact that analytical procedures are mostly used in areas of work related to the Profit & Loss Account, particularly in the areas of (i) Sales / Customers, (ii) Purchases / Suppliers, (iii) Personnel Expenses and (iv) Income / Financial Expenses. At a significantly lower level, it is shown that in the areas of the Balance Sheet the use of analytical procedures is considered in a much lesser degree. Furthermore, it appears that the typology of analytical procedures used in these areas correspond mainly to comparison tests, trend analysis, ratio analysis, reasonability tests, all those categorized to be less complex analytical procedures.
- The usefulness of analytical procedures : an empirical approach in the auditing sector in PortugalPublication . Pinho, CarlosThe conceptual conflict between the efficiency and efficacy on financial auditing arises from the fact that resources are scarce, both in terms of the time available to carry out the audit and the quality and timeliness of the information available to the external auditor. Audits tend to be more efficient, the lower the combination of inherent risk and control risk is assessed to be, allowing the auditor to carry out less extensive and less timely auditing tests, meaning that in some cases analytical audit procedures are a good tool to support the opinions formed by the auditor. This research, by means of an empirical study of financial auditing in Portugal, aims to evaluate the extent to which analytical procedures are used during a financial audit engagement in Portugal, throughout the different phases involved in auditing. The conclusions point to the fact that, in general terms and regardless of the size of the audit company and the way in which professionals work, Portuguese auditors use analytical procedures more frequently during the planning phase rather than during the phase of evidence gathering and the phase of opinion formation.
- A utilização de procedimentos analíticos de auditoria : o caso portuguêsPublication . Pinho, Carlos; Costa, Carlos Baptista da; Pinto, Nuno Gama de OliveiraA problemática associada ao conflito entre eficiência e eficácia de um trabalho de auditoria decorre do facto de, no âmbito deste tipo de trabalhos, existir escassez de recursos, quer ao nível do tempo de execução, quer ao nível da qualidade e tempestividade da informação disponível para o auditor externo. Os trabalhos de auditoria tendem a ser mais eficientes, ou seja, a consumir menos recursos, quanto menor é a aferição da combinação do risco inerente e do risco de controlo, permitindo que o auditor desenvolva testes de auditoria menos extensos. A presente investigação, através de um trabalho empírico no contexto da auditoria financeira em Portugal, procura aferir em que medida o recurso a procedimentos analíticos é efectuado em Portugal, mormente relativamente às fases e às áreas de auditoria em que são adoptados, quais os procedimentos que proporcionam maior segurança aos auditores e em que medida os normativos em vigor condicionam ou não o uso deste tipo de procedimentos. As conclusões apontam para o facto de os auditores em Portugal utilizarem com maior frequência procedimentos analíticos na fase de planeamento sendo, por outro lado, mais utilizados em áreas com maior volume de transacções tendencialmente rotineiras. Quanto aos normativos em vigor, as conclusões indiciam que a percepção que os auditores têm dos mesmos vai no sentido de uma clara imprecisão e indefinição de orientações concretas. O estudo revela, ainda, que os auditores apoiados na metodologia do risk based approach e em face da pressão temporal dos trabalhos de auditoria, recorrem mais frequentemente a procedimentos analíticos com o intuito de detectar erros e fraudes e de reduzir o volume de testes substantivos de detalhe.