Page 134 - CA Inter Audit PARAM

CA Ravi Taori
We can analyze data to understand the relationship to another account and through this, disaggregate the
transactions flowing to and from the balance sheet account (e.g., sales and cash receipts flowing through trade
receivables), or to compare ratios over time as this enhances our ability to obtain audit evidence for balance
sheet accounts.

(ii)Predictability:
The auditor should consider the following factors for Substantive Audit Procedures: Substantive analytical
procedures are more appropriate when an account balance or relationships between items of data are
predictable (e.g., between sales and cost of sales or between trade receivables and cash receipts). A predictable
relationship is one that may reasonably be expected to exist and continue over time.

(iii)Nature of Assertions:
Substantive analytical procedures may be more effective in providing evidence for some assertions (e.g.,
completeness or valuation) than for others (e.g., rights and obligations). Predictive analytical procedures using
data analytics can be used to address completeness, valuation/measurement and occurrence.

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