Substantive Analytics
Set each income statement caption against an independent expectation, and find the ones that need explaining.
- Ledger + draft financial statements, caption by caption
- Compares with last year
How the result is read
A substantive analytical procedure develops an expectation precise enough to find a material misstatement, sets a difference that can be accepted without further work, and investigates the rest (ISA 520.5, AU-C 520.05; PCAOB AS 2305). Here the expectation comes from last year — the prior-year ledger when it is loaded, else the comparative in the draft accounts — and from one driver: costs that move with sales (cost of sales, materials) are expected to move as revenue moved; the other captions to stay where they were. The difference accepted is performance materiality. A caption beyond it needs management’s explanation, and the explanation needs evidence: an explanation that is not corroborated is not audit evidence (ISA 520.7(b)).
In the application
Substantive Analytics is filed under Completion, index letter L. "Run all analyses" runs it with every other analysis the ledger and the documents loaded can answer. The worksheet states the population it tested on its face — or "Not applicable" with the reason when a column it depends on is empty — and the Excel workbook the engagement exports files it under L, beside an index of the source files with their SHA-256 fingerprints.
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Run your next audit file test without the Excel crash.
One free engagement to evaluate, valid 60 days. The ledger never leaves the machine.
- 20 minutes
- Runs on a fictional engagement
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