ISA 520 — Analytical Procedures

ISA 520 DEALS with the auditor’s USE of analytical procedures as substantive procedures (‘Substantive Analytical Procedures’).

ISA 520 – Introduction

1. Scope of this ISA

It also deals with the auditor’s responsibility to perform analytical procedures Near the end of the audit that assist the auditor when forming an overall conclusion on the financial statements.

ISA 315 (Revised) deals with the use of analytical procedures as ‘RISK Assessment Procedures‘.

2. Effective Date

This ISA is EFFECTIVE for audits of financial statements for periods beginning on or after December 15, 2009.

ISA 520

ISA 520 – Objectives

The Objectives of the ‘Auditor’ are:

  • To obtain relevant and reliable audit evidence when using substantive analytical procedures; AND
  • To design and perform analytical procedures near the end of the audit.

ISA 520 – Definition

1. Analytical Procedures

Evaluations of ‘Financial Information‘ through analysis of PLAUSIBLE relationships Among both financial and non-financial data.

ISA 520 – Requirements

1. Substantive Analytical Procedures

When designing and performing substantive analytical procedures, EITHER alone or in combination with tests of details as substantive procedures in accordance with ISA 330, the ‘Auditor’ shall:

(a) DETERMINE the suitability of particular substantive analytical procedures for given assertions;
(b) EVALUATE the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed;
(c) DEVELOP an expectation of recorded amounts or ratios; AND
(d) DETERMINE the amount of any difference of recorded amounts from expected values that is acceptable.

2. Analytical Procedures that Assist When Forming an Overall Conclusion

The ‘Auditor’ shall DESIGN and PERFORM analytical procedures Near the end of the audit that Assist the auditor when forming an overall conclusion as to whether the financial statements are consistent with the auditor’s understanding of the entity.

3. Investigating Results of Analytical Procedures

If analytical procedures performed in accordance with this ISA identify fluctuations or relationships that are Inconsistent with other relevant information or that differ from expected values by a significant amount, the ‘Auditor’ shall INVESTIGATE such differences by:

  • INQUIRING of Management and obtaining appropriate audit evidence relevant to Management’s responses; AND
  • PERFORMING other audit procedures as Necessary in the circumstances.


ISA 520 Analytical Procedures DEALS with the auditor’s USE of analytical procedures as Substantive Procedures.

[500-599] Audit Evidence 

ISA 500

ISA 501

ISA 505

ISA 510

ISA 530

ISA 540

ISA 550

ISA 560

ISA 570

ISA 580

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