In auditing the financial statements of companies which use computerized accounting systems, the auditors may find that this traditional (audit) trail is often obscured. Various techniques can be used in order to give the auditors greater assurance when the audit trail is lost. Required Explain how the auditors can use analytical procedures in order to give them greater assurance when there is a loss of audit trail

Analytical procedures are substantive process which can be useful at most stages of the audit. As well as confirming figures directly (such as the PAYE due on salaries for a period) they may also be used to give additional comfort where other audit tests and other figures are also available.

The analytical procedures will not guarantee that certain transactions have been processed, but they will give some assurance that the records are accurate and complete.

Analytical procedures compare figures, trends and ratios to one another, to prior periods and to budgeted or forecast figures where variations occur from what is expected then investigations can be made to establish the reasons.

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