Accession Number : ADA119738

Title :   Analytical Review: A Comparison of Procedures and Techniques Used in Auditing.

Descriptive Note : Doctoral thesis,

Corporate Author : AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH

Personal Author(s) : Coakley,James Richard

Report Date : AUG 1982

Pagination or Media Count : 443

Abstract : This study compares some of the analytical review procedures which are currently used by practicing auditors. The comparison is based on the measured efficiency and effectiveness of the analytical review procedures applied to actual financial data. The measure of efficiency is the type I error rate and the measure of effectiveness is the type II error rate. A simulation process is used to measure the type I and type II error rates of the alternative analytical review procedures. Personal interviews are conducted with each participating auditor to derive the needed information. The simulation process applies each of the analytical review procedures to actual financial data seeded with monetary errors of various size and various monthly distributions across the account balances. The results of the simulation identify specific analytical review procedures which are considered most efficient for a specified level of effectiveness. The major finding of this study is that the precision currently used with analytical review procedures may be too restrictive. Many investigations are signalled by the analytical review procedures as a result of normal fluctuations in the financial data, prior to the introduction of monetary error into the account balances. The results of the study suggest that analytical review procedures may not provide sufficient audit assurance when applied as substantive tests.

Descriptors :   *Auditing, *Accounting, Methodology, Comparison, Efficiency, Models, Finance, Sampling, Errors, Simulation, Information systems, Theses

Subject Categories : Administration and Management

Distribution Statement : APPROVED FOR PUBLIC RELEASE