The Reel Wheel: Using Analytical Procedures as Substantive Tests of Account Balances

Document Type

Article

Publication Date

2-1-2020

Publication Title

Issues in Accounting Education

Volume

35

Issue

1

First page number:

13

Last page number:

24

Abstract

This case provides students an introductory experience to substantive analytical procedures in a realistic audit setting. Students are presented with a scenario, adapted from a real-world example, requiring them to (1) research relevant auditing standards, (2) develop an independent expectation for a client's revenue account, and (3) consider the precision of the estimate, additional audit procedures, and the reliability of the underlying data and evidence obtained. In completing the case, students will learn to: (1) explain the benefits and challenges of using substantive analytical procedures, (2) research relevant auditing standards, (3) create and analyze relevant substantive analytics, (4) evaluate the appropriateness of data aggregation in substantive analytical procedures, and (5) discuss factors affecting the reliability of data used by the auditor. The case is typically assigned as an out-of-class assignment, combined with a subsequent in-class discussion. It can be used in either undergraduate or graduate auditing courses.

Keywords

Substantive Analytical Procedures; Disaggregated Data; Data Analytics

Disciplines

Accounting | Business

Language

English

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