Analytical Procedures based on Statistical Analysis of Comparable data for Prior Financial Reporting Periods
Author:
Univ. Prof. Elisabeta JABA, Ph. D. Emeritus; Ioan-Bogdan ROBU, Ph. D. Student; Mihaela-Alina ROBU, Ph. D. Student
JEL:
C12, C58, M41, M42
DOI:
Keywords:
audit engagement, audit evidence, analytical procedures, financial ratios, financial years, Reapeated-Measures ANOVA, client company`s financial profile
Abstract:
The role of the auditor is essential to ensure a true and fair view of the listed companies on the capital market by issuing a professional, independent and objective audit opinion. During audit engagement, the opinion of the audit report is presented on the basis of sufficient appropriate audit evidence. However, in times of crisis, providing an audit engagement in accordance with quality standards and maintaining low audit costs is one of the challenges that the auditor should respond. The auditor should respond to the possible level budget restrictions in the audit engagement by obtaining sufficient appropriate audit evidence, however obtained at minimal cost. Of audit procedures involving the lowest costs can list analytical procedures using statistical methods. They can provide the auditor with information on the evolution of the position and the performance of the client company over several reporting periods. The study aims to analyze the evolution of the main ratios regarding the financial position and performance of the client company, in terms of economic and financial crisis. Identifying differences between financial ratios based on comparable data for prior reporting periods lead auditor to detect significant errors and financial fraud. The study was conducted on a sample of 41 Romanian companies listed on Bucharest Stock Exchange in the period 2008-2011. The study results claim that there are significant differences between values recorded by the financial ratios over several financial reporting periods and may represent a fair view of market evolution. By comparing these differences to those identified in the company-client auditor may signal a number of inconsistencies due to errors or frauds that need additional tests. The research results were obtained using statistical analysis of data with SPSS 20.0.\r\n\r\n