[Anonymous]

What does it mean to aggregate analytical procedures at a low or high level?

[mtwst113]

Can you give a MCQ that this applies to? Not sure which aspect to explain

BEC | √
AUD| √
FAR| Spring 2015

[mtwst113]

Can you give a MCQ that this applies to? Not sure which aspect to explain

BEC | √
AUD| √
FAR| Spring 2015

[Anonymous]

So hard to find the exact MCQ you're looking for in Ninja MCQ. I guess the closest thing would be the AICPA, where seciton .07 says, “Analytical procedures used in planning the audit generally use data aggregated at a high level.” What does it mean when you say aggregate at either high or low level?

https://pcaobus.org/Standards/Auditing/Pages/AU329A.aspx#ps-pcaob_ff501d72-cb89-4940-889a-c04e7e3cc767

[Anonymous]

So hard to find the exact MCQ you're looking for in Ninja MCQ. I guess the closest thing would be the AICPA, where seciton .07 says, “Analytical procedures used in planning the audit generally use data aggregated at a high level.” What does it mean when you say aggregate at either high or low level?

https://pcaobus.org/Standards/Auditing/Pages/AU329A.aspx#ps-pcaob_ff501d72-cb89-4940-889a-c04e7e3cc767

[mtwst113]

.07

“Analytical procedures used in planning the audit generally use data aggregated at a high level. Furthermore, the sophistication, extent and timing of the procedures, which are based on the auditor's judgment, may vary widely depending on the size and complexity of the client. For some entities, the procedures may consist of reviewing changes in account balances from the prior to the current year using the general ledger or the auditor's preliminary or unadjusted working trial balance. In contrast, for other entities, the procedures might involve an extensive analysis of quarterly financial statements. In both cases, the analytical procedures, combined with the auditor's knowledge of the business, serve as a basis for additional inquiries and effective planning.”

I think this means that the majority of analytical procedures that auditors perform during planning use data that is “high level” in the sense that the auditor might only look at accounts payable, for instance, as a line item in the financial statement. So, the auditor isn't drilling down to see what AP is made up of during the planning phase, he/she is just taking a look to see if any overall account balances stand out as being unusual…and from there they can plan to dig deeper during the actual fieldwork.

BEC | √
AUD| √
FAR| Spring 2015

[mtwst113]

.07

“Analytical procedures used in planning the audit generally use data aggregated at a high level. Furthermore, the sophistication, extent and timing of the procedures, which are based on the auditor's judgment, may vary widely depending on the size and complexity of the client. For some entities, the procedures may consist of reviewing changes in account balances from the prior to the current year using the general ledger or the auditor's preliminary or unadjusted working trial balance. In contrast, for other entities, the procedures might involve an extensive analysis of quarterly financial statements. In both cases, the analytical procedures, combined with the auditor's knowledge of the business, serve as a basis for additional inquiries and effective planning.”

I think this means that the majority of analytical procedures that auditors perform during planning use data that is “high level” in the sense that the auditor might only look at accounts payable, for instance, as a line item in the financial statement. So, the auditor isn't drilling down to see what AP is made up of during the planning phase, he/she is just taking a look to see if any overall account balances stand out as being unusual…and from there they can plan to dig deeper during the actual fieldwork.

BEC | √
AUD| √
FAR| Spring 2015

[Study_Fiend]

To me, aggregated analytical procedures are not as valuable as disaggregated analytical procedures. When you do disaggregated analytics, you are able to drill deeper down into the smaller levels of the account or whatever you are analyzing. So in essence, aggregated analytical procedures would be something like fluctuations of revenue (high level) whereas disaggregated analytical procedures would be something like fluxing revenues by product division, or by geographical region (more granular level)

[Study_Fiend]

To me, aggregated analytical procedures are not as valuable as disaggregated analytical procedures. When you do disaggregated analytics, you are able to drill deeper down into the smaller levels of the account or whatever you are analyzing. So in essence, aggregated analytical procedures would be something like fluctuations of revenue (high level) whereas disaggregated analytical procedures would be something like fluxing revenues by product division, or by geographical region (more granular level)

[Author]

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