A research note on the use and perceived usefulness of analytical procedures by Australian auditors

The results of a study on the use and perceived useful of analytical procedures (AP) by a sample of experienced Australian auditors from Big 6 to non-Big 6 accounting firms are presented. The findings indicate that AP are used extensively by almost all auditors. The most commonly used AP include the simpler long-established techniques such as scanning the data, simple comparisons and standard ratio analysis. There appeared to be much less support for the use of more mathematically sophisticated AP - regression analysis, time series analysis and time series modeling. These AP were the least used by Big 6 and non-Big 6 auditors. The major reason for their relative lack of use was a commonly held perception that the more mathematically sophisticated AP were less effective than the simpler AP. The perceived usefulness of AP extends to all 3 stages of the audit - planning, detailed substantive testing, and final review. However, most auditors believed that AP were most useful in the final review process.