Page 217 - AAA Integrated Workbook STUDENT S18-J19

Review of interim financial information

3.3 Procedures in review engagements

Procedures will include:

 Enquiries of relevant parties (usually management).

 Analytical procedures.

 Other review procedures as necessary to obtain sufficient appropriate evidence

 Written representations from management

Analytical procedures should be designed to identify relationships and individual
items that appear unusual. Such procedures might include:

 Comparison of the current financial statements vs. prior periods.

 Comparison of the current financial statements vs. forecasts or budgets.

 Review relationships within the financial statements that would be expected to
conform to a predictable pattern based on previous patterns for the entity or
industry norms:

– Gross profit margin

– Net profit margin

– Interest cover

– Receivables days

– Payables days

– Inventory days.

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