Auditors' use and perceptions of analytical procedures in Singapore : an exploratory study
The use of analytical procedures as an auditing technique has had a long history, but only in recent years has it obtained the renewed interest of practitioners, academics and standard setting bodies. Much of the rise was preceded by the economic boom in the late 1970s and early...
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| Main Authors: | , , |
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| Format: | Final Year Project |
| Language: | English |
| Published: |
2013
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/51147 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | The use of analytical procedures as an auditing technique has had a long history, but only
in recent years has it obtained the renewed interest of practitioners, academics and
standard setting bodies. Much of the rise was preceded by the economic boom in the late
1970s and early 1980s (particularly in the West), technological developments and
increased threats of litigation [Higson, 1991]. As businesses expand, transactions increase
in both volume and complexity, forcing auditors to look for ways to reduce audit costs
while maintaining high service quality. Accordingly, analytical procedures seem to be a
proven way to increase the efficiency and effectiveness of the audit process [Albrecht,
1977; Smith, 1983; Blocher and Willingham, 1988; Calderon and Green, 1994].
It is not unexpected that Singapore too, may soon require a change in the way auditing is
traditionally performed, given its high growth in the past decade and its conferment with
the Developed Nation status on 1 January 1996. Singapore has also had its fair share of
corporate collapses and litigation against auditors, such as the Pan-Electric case in 1985
and more recently, the Barings collapse in 1995.
Are analytical procedures a panacea for all audit situations? The first part of this report,
comprising Chapters 1 to 3, provides a review of available literature on the potential
benefits of analytical procedures as well as certain considerations necessary for their use
as an auditing technique.
Considering the dearth of similar studies performed locally, Chapters 4 and 5 describe the
methodology and findings of a questionnaire survey conducted to obtain an insight into
the current use of analytical procedures by local practitioners, as well as their perceptions
on related issues. .
The report is concluded with a chapter on the position of the Institute of Certified Public
Accountants of Singapore (ICPAS) on these issues. In an interview, the Practice Review
Director of the Institute discusses significant observations from his reviews of local
auditors, the role of the Institute in promoting the use of analytical procedures, and the
future of analytical procedures in Singapore.
It is hoped that this study will help to create greater awareness of the importance of
analytical procedures as an audit technique, as well as provide a basis for future research
on related issues. |
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