Financial statement auditors need to be able to analyze financial results to not only enhance audit quality but also improve client service through being a better business advisor. Reading and interpreting financial information is a critical skill that this module will enhance.
Major Topics:
- Financial statement analysis, and communicating insights to financial statement users
- Improving audit quality through strong analytic procedures, including identifying and responding to risk of material misstatement
- Developing plausible expectations for comparison to actual financial results
- Detecting earnings management and other risks through analytic procedures
Prerequisites
Prerequisite: Experience on basic audit engagements.
Designed For: Accountants responsible for using analytic procedures to provide greater insight into the financial results for both audit and client service.
Learning Objective
- Explain common ratios used to analyze and interpret financial results, focusing on areas such as profitability, liquidity, operating efficiency, and leverage.
- Describe how to improve the use of analytic procedures to detect earnings management and other anomalies.
- Explain how to leverage analytic procedures as audit evidence.
- Discuss how to draw conclusions from financial statement analysis.
Last updated/reviewed: March 23, 2024
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Jennifer Louis
CPA, President of Emergent Solutions Group LLC
INTRODUCTION AND OVERVIEW
- Learning Objectives for Maximizing Analytic Procedure Evidence 0:49
- Introduction 12:39
- Profitability Ratio 11:40
- Liquidity Ratio 7:57
- A/R Activity-Operating Effectiveness Ratios 6:23
- Inventory Activity-Operating Effectiveness Ratios 8:50
- Other Operating Effectiveness Ratios 4:25
- Leverage Ratios 8:01
FINANCIAL STATEMENT ANALYSIS
- Financial Statement Analysis Case Study 9:06
- Market Strength Ratios 6:46
- Analytic Procedures in Audits 14:09
- Focus on Strengthening Substantive Analytics 10:12
CONTINUOUS PLAY
SUPPORTING MATERIAL
- Slides: Maximizing Analytic Procedure Evidence - Adding Value Through Useful Financial Statement Analysis PDF
- Maximizing Analytic Procedure Evidence - Adding Value Through Useful Financial Statement Analysis Glossary/ Index PDF
REVIEW AND TEST
- REVIEW QUESTIONS quiz
- FINAL EXAM exam
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