The Role of the Analytical Procedures in Reducing the Audit Risks according to the International Auditing Standard (520)

Abstract

This study aims at identifying the role of the analytical procedures in

reducing the audit risks according to the International Auditing standard

(520) from the auditor's point of view.For achieving the study purpose , a

questionnaire consisting of 35 items was distributed in which four domains

were developed.After being subjected for reliability and validity, it was

distributed to 83 auditors study sample was chosen randomly of auditors

who are working in the West Bank.Means, standard deviations, one sample

(t- test) and Chronapach Alpha test have been used throughout using of the

Statistical Package of the Social Science (SPSS).

The study results showed that the understanding among the auditors for

the company activities, the evaluation for the continuity of the company, the

absence of significant differences when applying the analytical procedures

and their indication to potential deviations lead to reducing audit risks.

According to the study results, several recommendations have been

suggested included the following: First: The auditor should apply the

analytical procedures in the planning stage in order to assist him to

understand the company’s activities and to identify the potential risks.

Second: Investigations, suitable interpretations and reinforced evidences

should be attained by the auditor when the analytical procedures reveal

important changes or inconsistent relations with the related information.

Third: Analytical procedures should be applied when executing the audit

process by the auditor when making decisions if the financial statements are

consistent to his perception about the company’s field of work.Fourth: Special

training programs related to analytical procedures should be prepared by

Palestine Association of Certified Public Accountants in order to ensure their

implementations effectively.