{"id":"F2009L04090","name":"ASA 520 - Analytical Procedures - October 2009","slug":"asa-520-analytical-procedures-october-2009","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":81666,"registerId":"commonwealth-F2009L04090-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a Copy of this Auditing Standa","sectionType":"section","heading":"Obtaining a Copy of this Auditing Standard","content":"##### Obtaining a Copy of this Auditing Standard\n\nThe most recently compiled versions of Auditing Standards, original Standards and amending Standards (see Compilation Details) are available on the AUASB website: www.auasb.gov.au","sortOrder":0},{"sectionNumber":"Contact Details","sectionType":"section","heading":"Contact Details","content":"##### Contact Details\n\n| Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204Collins Street WestMelbourne Victoria 8007AUSTRALIA |\n| --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- |","sortOrder":1},{"sectionNumber":"COPYRIGHT","sectionType":"section","heading":"COPYRIGHT","content":"##### COPYRIGHT\n\n© 2021 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).\n\nRequests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.\n\nThis Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.\n\nFurther information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Any decision to approve a request may also require the agreement of IFAC.\n\nISSN 1833-4393","sortOrder":2},{"sectionNumber":"CONTENTS","sectionType":"part","heading":"CONTENTS","content":"# CONTENTS\n\nCOMPILATION DETAILS\n\nAUTHORITY STATEMENT\n\nCONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING\n\nParagraphs\n\nApplication......................................................Aus 0.1-Aus 0.2\n\nOperative Date.........................................................Aus 0.3\n\nIntroduction\n\nScope of this Auditing Standard..................................................1\n\nEffective Date...............................................................2\n\nObjectives..................................................................3\n\nDefinition..................................................................4\n\nRequirements\n\nSubstantive Analytical Procedures.................................................5\n\nAnalytical Procedures that Assist When Forming an Overall Conclusion.....................6\n\nInvestigating Results of Analytical Procedures........................................7\n\nApplication and Other Explanatory Material\n\nDefinition of Analytical Procedures............................................A1-A3\n\nSubstantive Analytical Procedures............................................A4-A16\n\nAnalytical Procedures that Assist When Forming an Overall Conclusion...............A17-A19\n\nInvestigating Results of Analytical Procedures..................................A20-A21","sortOrder":3},{"sectionNumber":"COMPILATION DETAILS","sectionType":"part","heading":"COMPILATION DETAILS","content":"##### Obtaining a Copy of this Auditing Standard\n\nThe most recently compiled versions of Auditing Standards, original Standards and amending Standards (see Compilation Details) are available on the AUASB website: www.auasb.gov.au\n\n##### Contact Details\n\n| Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204Collins Street WestMelbourne Victoria 8007AUSTRALIA |\n| --------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- |\n\n##### COPYRIGHT\n\n© 2021 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).\n\nRequests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.\n\nThis Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.\n\nFurther information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Any decision to approve a request may also require the agreement of IFAC.\n\nISSN 1833-4393\n\n# CONTENTS\n\nCOMPILATION DETAILS\n\nAUTHORITY STATEMENT\n\nCONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING\n\nParagraphs\n\nApplication......................................................Aus 0.1-Aus 0.2\n\nOperative Date.........................................................Aus 0.3\n\nIntroduction\n\nScope of this Auditing Standard..................................................1\n\nEffective Date...............................................................2\n\nObjectives..................................................................3\n\nDefinition..................................................................4\n\nRequirements\n\nSubstantive Analytical Procedures.................................................5\n\nAnalytical Procedures that Assist When Forming an Overall Conclusion.....................6\n\nInvestigating Results of Analytical Procedures........................................7\n\nApplication and Other Explanatory Material\n\nDefinition of Analytical Procedures............................................A1-A3\n\nSubstantive Analytical Procedures............................................A4-A16\n\nAnalytical Procedures that Assist When Forming an Overall Conclusion...............A17-A19\n\nInvestigating Results of Analytical Procedures..................................A20-A21\n\n  \n\n# COMPILATION DETAILS\n\n### Auditing Standard ASA 520 Analytical Procedures (as Amended)\n\nThis compilation takes into account amendments made up to and including 3 March 2020 and was prepared on 10 November 2021 by the Auditing and Assurance Standards Board (AUASB).\n\nThis compilation is not a separate Auditing Standard made by the AUASB. Instead, it is a representation of ASA 520 (October 2009) as amended by other Auditing Standards which are listed in the Table below.\n\n##### Table of Standards\n\n| Standard       | Date made       | Operative Date                                                                                         |\n| -------------- | --------------- | ------------------------------------------------------------------------------------------------------ |\n| ASA 520 [A]    | 27 October 2009 | Financial reporting periods commencing on or after 1 January 2010.                                     |\n| ASA 2018-1 [B] | 5 December 2018 | Financial reporting periods commencing on or after 15 December 2019, with early adoption permitted[*]. |\n| ASA 2020-1 [C] | 3 March 2020    | Financial reporting periods commencing on or after 15 December 2021[#]                                 |\n\n\\[A\\] Federal Register of Legislation – registration number F2009L04090, 11 November 2009\n\n\\[B\\] Federal Register of Legislation – registration number F2019L00016, 3 January 2019\n\n\\[C\\] Federal Register of Legislation – registration number F2020L00252, 13 March 2020\n\n##### Table of Amendments\n\n| Paragraph affected | How affected | By … [paragraph] |\n| ------------------ | ------------ | ---------------- |\n| A12Footnote 4      | Amended      | ASA 2018-1 [53]  |\n| 1Footnote 1        | Amended      | ASA 2020-1 [133] |\n| A18Footnote 10     | Amended      | ASA 2020-1 [134] |\n\n  \n\n## AUTHORITY STATEMENT\n\nAuditing Standard ASA 520 Analytical Procedures (as amended to 3 March 2020) is set out in paragraphs Aus 0.1 to A21.\n\nThis Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.\n\n##### Conformity with International Standards on Auditing\n\nThis Auditing Standard conforms with International Standard on Auditing ISA 520 Analytical Procedures, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).\n\nParagraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.\n\nCompliance with this Auditing Standard enables compliance with ISA 520.","sortOrder":4},{"sectionNumber":"Auditing Standard ASA 520 Analytical Pro","sectionType":"division","heading":"Auditing Standard ASA 520 Analytical Procedures (as Amended)","content":"### Auditing Standard ASA 520 Analytical Procedures (as Amended)\n\nThis compilation takes into account amendments made up to and including 3 March 2020 and was prepared on 10 November 2021 by the Auditing and Assurance Standards Board (AUASB).\n\nThis compilation is not a separate Auditing Standard made by the AUASB. Instead, it is a representation of ASA 520 (October 2009) as amended by other Auditing Standards which are listed in the Table below.","sortOrder":5},{"sectionNumber":"Table of Standards","sectionType":"section","heading":"Table of Standards","content":"##### Table of Standards\n\n| Standard       | Date made       | Operative Date                                                                                         |\n| -------------- | --------------- | ------------------------------------------------------------------------------------------------------ |\n| ASA 520 [A]    | 27 October 2009 | Financial reporting periods commencing on or after 1 January 2010.                                     |\n| ASA 2018-1 [B] | 5 December 2018 | Financial reporting periods commencing on or after 15 December 2019, with early adoption permitted[*]. |\n| ASA 2020-1 [C] | 3 March 2020    | Financial reporting periods commencing on or after 15 December 2021[#]                                 |\n\n\\[A\\] Federal Register of Legislation – registration number F2009L04090, 11 November 2009\n\n\\[B\\] Federal Register of Legislation – registration number F2019L00016, 3 January 2019\n\n\\[C\\] Federal Register of Legislation – registration number F2020L00252, 13 March 2020","sortOrder":6},{"sectionNumber":"Table of Amendments","sectionType":"section","heading":"Table of Amendments","content":"##### Table of Amendments\n\n| Paragraph affected | How affected | By … [paragraph] |\n| ------------------ | ------------ | ---------------- |\n| A12Footnote 4      | Amended      | ASA 2018-1 [53]  |\n| 1Footnote 1        | Amended      | ASA 2020-1 [133] |\n| A18Footnote 10     | Amended      | ASA 2020-1 [134] |\n\n  \n\n## AUTHORITY STATEMENT\n\nAuditing Standard ASA 520 Analytical Procedures (as amended to 3 March 2020) is set out in paragraphs Aus 0.1 to A21.\n\nThis Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.\n\n##### Conformity with International Standards on Auditing\n\nThis Auditing Standard conforms with International Standard on Auditing ISA 520 Analytical Procedures, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).\n\nParagraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.\n\nCompliance with this Auditing Standard enables compliance with ISA 520.","sortOrder":7},{"sectionNumber":"AUTHORITY STATEMENT","sectionType":"part","heading":"AUTHORITY STATEMENT","content":"## AUTHORITY STATEMENT\n\nAuditing Standard ASA 520 Analytical Procedures (as amended to 3 March 2020) is set out in paragraphs Aus 0.1 to A21.\n\nThis Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.","sortOrder":8},{"sectionNumber":"Conformity with International Standards ","sectionType":"section","heading":"Conformity with International Standards on Auditing","content":"##### Conformity with International Standards on Auditing\n\nThis Auditing Standard conforms with International Standard on Auditing ISA 520 Analytical Procedures, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).\n\nParagraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.\n\nCompliance with this Auditing Standard enables compliance with ISA 520.","sortOrder":9},{"sectionNumber":"Auditing Standard ASA 520","sectionType":"part","heading":"Auditing Standard ASA 520","content":"Auditing Standard ASA 520\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 520 Analytical Procedures pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 520 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 3 March 2020 (see Compilation Details).\n\n## Auditing Standard ASA 520\n\n### Analytical Procedures\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). 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 report. ASA 315[\\[1\\]](#_ftn3) deals with the use of analytical procedures as risk assessment procedures. ASA 330 includes requirements and guidance regarding the nature, timing and extent of audit procedures in response to assessed risks; these audit procedures may include substantive analytical procedures.[\\[2\\]](#_ftn4)\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objectives\n\n1.  The objectives of the auditor are:\n    1.  To obtain relevant and reliable audit evidence when using substantive analytical procedures; and\n    2.  To 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 report is consistent with the auditor’s understanding of the entity.\n\n##### Definition\n\n1.  For purposes of the Australian Auditing Standards, the term “analytical procedures” means evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount. (Ref: Para. A1-A3)\n\n##### Requirements\n\n###### Substantive Analytical Procedures\n\n1.  When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures in accordance with ASA 330,[\\[3\\]](#_ftn5) the auditor shall: (Ref: Para. A4-A5)\n    1.  Determine the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions; (Ref: Para. A6-A11)\n    2.  Evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of source, comparability, and nature and relevance of information available, and controls over preparation;  \n        (Ref: Para. A12-A14)\n    3.  Develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated; and (Ref: Para. A15)\n    4.  Determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation as required by paragraph 7 of this Auditing Standard. (Ref: Para. A16)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion\n\n1.  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 report is consistent with the auditor’s understanding of the entity. (Ref: Para. A17-A19)\n\n  \n\n###### Investigating Results of Analytical Procedures\n\n1.  If analytical procedures performed in accordance with this Auditing Standard 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:\n    1.  Enquiring of management and obtaining appropriate audit evidence relevant to management’s responses; and\n    2.  Performing other audit procedures as necessary in the circumstances.  \n        (Ref: Para. A20-A21)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Definition of Analytical Procedures (Ref: Para. 4)\n\n1.  Analytical procedures include the consideration of comparisons of the entity’s financial information with, for example:\n\n-   Comparable information for prior periods.\n-   Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor, such as an estimation of depreciation.\n-   Similar industry information, such as a comparison of the entity’s ratio of sales to accounts receivable with industry averages or with other entities of comparable size in the same industry.\n\n1.  Analytical procedures also include consideration of relationships, for example:\n\n-   Among elements of financial information that would be expected to conform to a predictable pattern based on the entity’s experience, such as gross margin percentages.\n-   Between financial information and relevant non-financial information, such as payroll costs to number of employees.\n\n1.  Various methods may be used to perform analytical procedures. These methods range from performing simple comparisons to performing complex analyses using advanced statistical techniques. Analytical procedures may be applied to a consolidated financial report, components and individual elements of information.\n\n###### Substantive Analytical Procedures (Ref: Para. 5)\n\n1.  The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both. The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgement about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level.\n2.  The auditor may enquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.\n\nSuitability of Particular Analytical Procedures for Given Assertions (Ref: Para. 5(a))\n\n1.  Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be predictable over time. The application of planned analytical procedures is based on the expectation that relationships among data exist and continue in the absence of known conditions to the contrary. However, the suitability of a particular analytical procedure will depend upon the auditor’s assessment of how effective it will be in detecting a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated.\n2.  In some cases, even an unsophisticated predictive model may be effective as an analytical procedure. For example, where an entity has a known number of employees at fixed rates of pay throughout the period, it may be possible for the auditor to use this data to estimate the total payroll costs for the period with a high degree of accuracy, thereby providing audit evidence for a significant item in the financial report and reducing the need to perform tests of details on the payroll. The use of widely recognised trade ratios (such as profit margins for different types of retail entities) can often be used effectively in substantive analytical procedures to provide evidence to support the reasonableness of recorded amounts.\n3.  Different types of analytical procedures provide different levels of assurance. Analytical procedures involving, for example, the prediction of total rental income on a building divided into apartments, taking the rental rates, the number of apartments and vacancy rates into consideration, can provide persuasive evidence and may eliminate the need for further verification by means of tests of details, provided the elements are appropriately verified. In contrast, calculation and comparison of gross margin percentages as a means of confirming a revenue figure may provide less persuasive evidence, but may provide useful corroboration if used in combination with other audit procedures.\n4.  The determination of the suitability of particular substantive analytical procedures is influenced by the nature of the assertion and the auditor’s assessment of the risk of material misstatement. For example, if controls over sales order processing are deficient, the auditor may place more reliance on tests of details rather than on substantive analytical procedures for assertions related to receivables.\n5.  Particular substantive analytical procedures may also be considered suitable when tests of details are performed on the same assertion. For example, when obtaining audit evidence regarding the valuation assertion for accounts receivable balances, the auditor may apply analytical procedures to an ageing of customers’ accounts in addition to performing tests of details on subsequent cash receipts to determine the collectability of the receivables.\n\nConsiderations Specific to Public Sector Entities\n\n1.  The relationships between individual financial report items traditionally considered in the audit of business entities may not always be relevant in the audit of governments or other non-business public sector entities; for example, in many public sector entities there may be little direct relationship between revenue and expenditure. In addition, because expenditure on the acquisition of assets may not be capitalised, there may be no relationship between expenditures on, for example, inventories and fixed assets and the amount of those assets reported in the financial report. Also, industry data or statistics for comparative purposes may not be available in the public sector. However, other relationships may be relevant, for example, variations in the cost per kilometre of road construction or the number of vehicles acquired compared with vehicles retired.\n\nThe Reliability of the Data (Ref: Para. 5(b))\n\n1.  The reliability of data is influenced by its source and nature and is dependent on the circumstances under which it is obtained. Accordingly, the following are relevant when determining whether data is reliable for purposes of designing substantive analytical procedures:\n    1.  Source of the information available. For example, information may be more reliable when it is obtained from independent sources outside the entity;[\\[4\\]](#_ftn6)\n    2.  Comparability of the information available. For example, broad industry data may need to be supplemented to be comparable to that of an entity that produces and sells specialised products;\n    3.  Nature and relevance of the information available. For example, whether budgets have been established as results to be expected rather than as goals to be achieved; and\n    4.  Controls over the preparation of the information that are designed to ensure its completeness, accuracy and validity. For example, controls over the preparation, review and maintenance of budgets.\n2.  The auditor may consider testing the operating effectiveness of controls, if any, over the entity’s preparation of information used by the auditor in performing substantive analytical procedures in response to assessed risks. When such controls are effective, the auditor generally has greater confidence in the reliability of the information and, therefore, in the results of analytical procedures. The operating effectiveness of controls over non-financial information may often be tested in conjunction with other tests of controls. For example, in establishing controls over the processing of sales invoices, an entity may include controls over the recording of unit sales. In these circumstances, the auditor may test the operating effectiveness of controls over the recording of unit sales in conjunction with tests of the operating effectiveness of controls over the processing of sales invoices. Alternatively, the auditor may consider whether the information was subjected to audit testing. ASA 500 establishes requirements and provides guidance in determining the audit procedures to be performed on the information to be used for substantive analytical procedures.[\\[5\\]](#_ftn7)\n3.  The matters discussed in paragraphs A12(a)-A12(d) are relevant irrespective of whether the auditor performs substantive analytical procedures on the entity’s period end financial report, or at an interim date and plans to perform substantive analytical procedures for the remaining period. ASA 330 establishes requirements and provides guidance on substantive procedures performed at an interim date.[\\[6\\]](#_ftn8)\n\nEvaluation Whether the Expectation Is Sufficiently Precise (Ref: Para. 5(c))\n\n1.  Matters relevant to the auditor’s evaluation of whether the expectation can be developed sufficiently precisely to identify a misstatement that, when aggregated with other misstatements, may cause the financial report to be materially misstated, include:\n\n-   The accuracy with which the expected results of substantive analytical procedures can be predicted. For example, the auditor may expect greater consistency in comparing gross profit margins from one period to another than in comparing discretionary expenses, such as research or advertising.\n-   The degree to which information can be disaggregated. For example, substantive analytical procedures may be more effective when applied to financial information on individual sections of an operation or to financial reports of components of a diversified entity, than when applied to the financial report of the entity as a whole.\n-   The availability of the information, both financial and  \n    non-financial. For example, the auditor may consider whether financial information, such as budgets or forecasts, and non-financial information, such as the number of units produced or sold, is available to design substantive analytical procedures. If the information is available, the auditor may also consider the reliability of the information as discussed in paragraphs A12-A13 above.\n\nAmount of Difference of Recorded Amounts from Expected Values that Is Acceptable (Ref: Para. 5(d))\n\n1.  The auditor’s determination of the amount of difference from the expectation that can be accepted without further investigation is influenced by materiality[\\[7\\]](#_ftn9) and the consistency with the desired level of assurance, taking account of the possibility that a misstatement, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated. ASA 330 requires the auditor to obtain more persuasive audit evidence the higher the auditor’s assessment of risk.[\\[8\\]](#_ftn10) Accordingly, as the assessed risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[\\[9\\]](#_ftn11)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion (Ref: Para. 6)\n\n1.  The conclusions drawn from the results of analytical procedures designed and performed in accordance with paragraph 6 are intended to corroborate conclusions formed during the audit of individual components or elements of the financial report. This assists the auditor to draw reasonable conclusions on which to base the auditor’s opinion.\n2.  The results of such analytical procedures may identify a previously unrecognised risk of material misstatement. In such circumstances, ASA 315 requires the auditor to revise the auditor’s assessment of the risks of material misstatement and modify the further planned audit procedures accordingly.[\\[10\\]](#_ftn12)\n3.  The analytical procedures performed in accordance with paragraph 6 may be similar to those that would be used as risk assessment procedures.\n\n###### Investigating Results of Analytical Procedures (Ref: Para. 7)\n\n1.  Audit evidence relevant to management’s responses may be obtained by evaluating those responses taking into account the auditor’s understanding of the entity and its environment, and with other audit evidence obtained during the course of the audit.\n2.  The need to perform other audit procedures may arise when, for example, management is unable to provide an explanation, or the explanation, together with the audit evidence obtained relevant to management’s response, is not considered adequate.","sortOrder":10},{"sectionNumber":"Analytical Procedures","sectionType":"division","heading":"Analytical Procedures","content":"Auditing Standard ASA 520\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 520 Analytical Procedures pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 520 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 3 March 2020 (see Compilation Details).\n\n## Auditing Standard ASA 520\n\n### Analytical Procedures\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). 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 report. ASA 315[\\[1\\]](#_ftn3) deals with the use of analytical procedures as risk assessment procedures. ASA 330 includes requirements and guidance regarding the nature, timing and extent of audit procedures in response to assessed risks; these audit procedures may include substantive analytical procedures.[\\[2\\]](#_ftn4)\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objectives\n\n1.  The objectives of the auditor are:\n    1.  To obtain relevant and reliable audit evidence when using substantive analytical procedures; and\n    2.  To 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 report is consistent with the auditor’s understanding of the entity.\n\n##### Definition\n\n1.  For purposes of the Australian Auditing Standards, the term “analytical procedures” means evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount. (Ref: Para. A1-A3)\n\n##### Requirements\n\n###### Substantive Analytical Procedures\n\n1.  When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures in accordance with ASA 330,[\\[3\\]](#_ftn5) the auditor shall: (Ref: Para. A4-A5)\n    1.  Determine the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions; (Ref: Para. A6-A11)\n    2.  Evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of source, comparability, and nature and relevance of information available, and controls over preparation;  \n        (Ref: Para. A12-A14)\n    3.  Develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated; and (Ref: Para. A15)\n    4.  Determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation as required by paragraph 7 of this Auditing Standard. (Ref: Para. A16)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion\n\n1.  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 report is consistent with the auditor’s understanding of the entity. (Ref: Para. A17-A19)\n\n  \n\n###### Investigating Results of Analytical Procedures\n\n1.  If analytical procedures performed in accordance with this Auditing Standard 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:\n    1.  Enquiring of management and obtaining appropriate audit evidence relevant to management’s responses; and\n    2.  Performing other audit procedures as necessary in the circumstances.  \n        (Ref: Para. A20-A21)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Definition of Analytical Procedures (Ref: Para. 4)\n\n1.  Analytical procedures include the consideration of comparisons of the entity’s financial information with, for example:\n\n-   Comparable information for prior periods.\n-   Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor, such as an estimation of depreciation.\n-   Similar industry information, such as a comparison of the entity’s ratio of sales to accounts receivable with industry averages or with other entities of comparable size in the same industry.\n\n1.  Analytical procedures also include consideration of relationships, for example:\n\n-   Among elements of financial information that would be expected to conform to a predictable pattern based on the entity’s experience, such as gross margin percentages.\n-   Between financial information and relevant non-financial information, such as payroll costs to number of employees.\n\n1.  Various methods may be used to perform analytical procedures. These methods range from performing simple comparisons to performing complex analyses using advanced statistical techniques. Analytical procedures may be applied to a consolidated financial report, components and individual elements of information.\n\n###### Substantive Analytical Procedures (Ref: Para. 5)\n\n1.  The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both. The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgement about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level.\n2.  The auditor may enquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.\n\nSuitability of Particular Analytical Procedures for Given Assertions (Ref: Para. 5(a))\n\n1.  Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be predictable over time. The application of planned analytical procedures is based on the expectation that relationships among data exist and continue in the absence of known conditions to the contrary. However, the suitability of a particular analytical procedure will depend upon the auditor’s assessment of how effective it will be in detecting a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated.\n2.  In some cases, even an unsophisticated predictive model may be effective as an analytical procedure. For example, where an entity has a known number of employees at fixed rates of pay throughout the period, it may be possible for the auditor to use this data to estimate the total payroll costs for the period with a high degree of accuracy, thereby providing audit evidence for a significant item in the financial report and reducing the need to perform tests of details on the payroll. The use of widely recognised trade ratios (such as profit margins for different types of retail entities) can often be used effectively in substantive analytical procedures to provide evidence to support the reasonableness of recorded amounts.\n3.  Different types of analytical procedures provide different levels of assurance. Analytical procedures involving, for example, the prediction of total rental income on a building divided into apartments, taking the rental rates, the number of apartments and vacancy rates into consideration, can provide persuasive evidence and may eliminate the need for further verification by means of tests of details, provided the elements are appropriately verified. In contrast, calculation and comparison of gross margin percentages as a means of confirming a revenue figure may provide less persuasive evidence, but may provide useful corroboration if used in combination with other audit procedures.\n4.  The determination of the suitability of particular substantive analytical procedures is influenced by the nature of the assertion and the auditor’s assessment of the risk of material misstatement. For example, if controls over sales order processing are deficient, the auditor may place more reliance on tests of details rather than on substantive analytical procedures for assertions related to receivables.\n5.  Particular substantive analytical procedures may also be considered suitable when tests of details are performed on the same assertion. For example, when obtaining audit evidence regarding the valuation assertion for accounts receivable balances, the auditor may apply analytical procedures to an ageing of customers’ accounts in addition to performing tests of details on subsequent cash receipts to determine the collectability of the receivables.\n\nConsiderations Specific to Public Sector Entities\n\n1.  The relationships between individual financial report items traditionally considered in the audit of business entities may not always be relevant in the audit of governments or other non-business public sector entities; for example, in many public sector entities there may be little direct relationship between revenue and expenditure. In addition, because expenditure on the acquisition of assets may not be capitalised, there may be no relationship between expenditures on, for example, inventories and fixed assets and the amount of those assets reported in the financial report. Also, industry data or statistics for comparative purposes may not be available in the public sector. However, other relationships may be relevant, for example, variations in the cost per kilometre of road construction or the number of vehicles acquired compared with vehicles retired.\n\nThe Reliability of the Data (Ref: Para. 5(b))\n\n1.  The reliability of data is influenced by its source and nature and is dependent on the circumstances under which it is obtained. Accordingly, the following are relevant when determining whether data is reliable for purposes of designing substantive analytical procedures:\n    1.  Source of the information available. For example, information may be more reliable when it is obtained from independent sources outside the entity;[\\[4\\]](#_ftn6)\n    2.  Comparability of the information available. For example, broad industry data may need to be supplemented to be comparable to that of an entity that produces and sells specialised products;\n    3.  Nature and relevance of the information available. For example, whether budgets have been established as results to be expected rather than as goals to be achieved; and\n    4.  Controls over the preparation of the information that are designed to ensure its completeness, accuracy and validity. For example, controls over the preparation, review and maintenance of budgets.\n2.  The auditor may consider testing the operating effectiveness of controls, if any, over the entity’s preparation of information used by the auditor in performing substantive analytical procedures in response to assessed risks. When such controls are effective, the auditor generally has greater confidence in the reliability of the information and, therefore, in the results of analytical procedures. The operating effectiveness of controls over non-financial information may often be tested in conjunction with other tests of controls. For example, in establishing controls over the processing of sales invoices, an entity may include controls over the recording of unit sales. In these circumstances, the auditor may test the operating effectiveness of controls over the recording of unit sales in conjunction with tests of the operating effectiveness of controls over the processing of sales invoices. Alternatively, the auditor may consider whether the information was subjected to audit testing. ASA 500 establishes requirements and provides guidance in determining the audit procedures to be performed on the information to be used for substantive analytical procedures.[\\[5\\]](#_ftn7)\n3.  The matters discussed in paragraphs A12(a)-A12(d) are relevant irrespective of whether the auditor performs substantive analytical procedures on the entity’s period end financial report, or at an interim date and plans to perform substantive analytical procedures for the remaining period. ASA 330 establishes requirements and provides guidance on substantive procedures performed at an interim date.[\\[6\\]](#_ftn8)\n\nEvaluation Whether the Expectation Is Sufficiently Precise (Ref: Para. 5(c))\n\n1.  Matters relevant to the auditor’s evaluation of whether the expectation can be developed sufficiently precisely to identify a misstatement that, when aggregated with other misstatements, may cause the financial report to be materially misstated, include:\n\n-   The accuracy with which the expected results of substantive analytical procedures can be predicted. For example, the auditor may expect greater consistency in comparing gross profit margins from one period to another than in comparing discretionary expenses, such as research or advertising.\n-   The degree to which information can be disaggregated. For example, substantive analytical procedures may be more effective when applied to financial information on individual sections of an operation or to financial reports of components of a diversified entity, than when applied to the financial report of the entity as a whole.\n-   The availability of the information, both financial and  \n    non-financial. For example, the auditor may consider whether financial information, such as budgets or forecasts, and non-financial information, such as the number of units produced or sold, is available to design substantive analytical procedures. If the information is available, the auditor may also consider the reliability of the information as discussed in paragraphs A12-A13 above.\n\nAmount of Difference of Recorded Amounts from Expected Values that Is Acceptable (Ref: Para. 5(d))\n\n1.  The auditor’s determination of the amount of difference from the expectation that can be accepted without further investigation is influenced by materiality[\\[7\\]](#_ftn9) and the consistency with the desired level of assurance, taking account of the possibility that a misstatement, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated. ASA 330 requires the auditor to obtain more persuasive audit evidence the higher the auditor’s assessment of risk.[\\[8\\]](#_ftn10) Accordingly, as the assessed risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[\\[9\\]](#_ftn11)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion (Ref: Para. 6)\n\n1.  The conclusions drawn from the results of analytical procedures designed and performed in accordance with paragraph 6 are intended to corroborate conclusions formed during the audit of individual components or elements of the financial report. This assists the auditor to draw reasonable conclusions on which to base the auditor’s opinion.\n2.  The results of such analytical procedures may identify a previously unrecognised risk of material misstatement. In such circumstances, ASA 315 requires the auditor to revise the auditor’s assessment of the risks of material misstatement and modify the further planned audit procedures accordingly.[\\[10\\]](#_ftn12)\n3.  The analytical procedures performed in accordance with paragraph 6 may be similar to those that would be used as risk assessment procedures.\n\n###### Investigating Results of Analytical Procedures (Ref: Para. 7)\n\n1.  Audit evidence relevant to management’s responses may be obtained by evaluating those responses taking into account the auditor’s understanding of the entity and its environment, and with other audit evidence obtained during the course of the audit.\n2.  The need to perform other audit procedures may arise when, for example, management is unable to provide an explanation, or the explanation, together with the audit evidence obtained relevant to management’s response, is not considered adequate.","sortOrder":11},{"sectionNumber":"Application","sectionType":"section","heading":"Application","content":"##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.","sortOrder":12},{"sectionNumber":"Operative Date","sectionType":"section","heading":"Operative Date","content":"##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]","sortOrder":13},{"sectionNumber":"Introduction","sectionType":"section","heading":"Introduction","content":"Auditing Standard ASA 520\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 520 Analytical Procedures pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 520 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 3 March 2020 (see Compilation Details).\n\n## Auditing Standard ASA 520\n\n### Analytical Procedures\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). 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 report. ASA 315[\\[1\\]](#_ftn3) deals with the use of analytical procedures as risk assessment procedures. ASA 330 includes requirements and guidance regarding the nature, timing and extent of audit procedures in response to assessed risks; these audit procedures may include substantive analytical procedures.[\\[2\\]](#_ftn4)\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objectives\n\n1.  The objectives of the auditor are:\n    1.  To obtain relevant and reliable audit evidence when using substantive analytical procedures; and\n    2.  To 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 report is consistent with the auditor’s understanding of the entity.\n\n##### Definition\n\n1.  For purposes of the Australian Auditing Standards, the term “analytical procedures” means evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount. (Ref: Para. A1-A3)\n\n##### Requirements\n\n###### Substantive Analytical Procedures\n\n1.  When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures in accordance with ASA 330,[\\[3\\]](#_ftn5) the auditor shall: (Ref: Para. A4-A5)\n    1.  Determine the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions; (Ref: Para. A6-A11)\n    2.  Evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of source, comparability, and nature and relevance of information available, and controls over preparation;  \n        (Ref: Para. A12-A14)\n    3.  Develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated; and (Ref: Para. A15)\n    4.  Determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation as required by paragraph 7 of this Auditing Standard. (Ref: Para. A16)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion\n\n1.  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 report is consistent with the auditor’s understanding of the entity. (Ref: Para. A17-A19)\n\n  \n\n###### Investigating Results of Analytical Procedures\n\n1.  If analytical procedures performed in accordance with this Auditing Standard 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:\n    1.  Enquiring of management and obtaining appropriate audit evidence relevant to management’s responses; and\n    2.  Performing other audit procedures as necessary in the circumstances.  \n        (Ref: Para. A20-A21)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Definition of Analytical Procedures (Ref: Para. 4)\n\n1.  Analytical procedures include the consideration of comparisons of the entity’s financial information with, for example:\n\n-   Comparable information for prior periods.\n-   Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor, such as an estimation of depreciation.\n-   Similar industry information, such as a comparison of the entity’s ratio of sales to accounts receivable with industry averages or with other entities of comparable size in the same industry.\n\n1.  Analytical procedures also include consideration of relationships, for example:\n\n-   Among elements of financial information that would be expected to conform to a predictable pattern based on the entity’s experience, such as gross margin percentages.\n-   Between financial information and relevant non-financial information, such as payroll costs to number of employees.\n\n1.  Various methods may be used to perform analytical procedures. These methods range from performing simple comparisons to performing complex analyses using advanced statistical techniques. Analytical procedures may be applied to a consolidated financial report, components and individual elements of information.\n\n###### Substantive Analytical Procedures (Ref: Para. 5)\n\n1.  The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both. The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgement about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level.\n2.  The auditor may enquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.\n\nSuitability of Particular Analytical Procedures for Given Assertions (Ref: Para. 5(a))\n\n1.  Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be predictable over time. The application of planned analytical procedures is based on the expectation that relationships among data exist and continue in the absence of known conditions to the contrary. However, the suitability of a particular analytical procedure will depend upon the auditor’s assessment of how effective it will be in detecting a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated.\n2.  In some cases, even an unsophisticated predictive model may be effective as an analytical procedure. For example, where an entity has a known number of employees at fixed rates of pay throughout the period, it may be possible for the auditor to use this data to estimate the total payroll costs for the period with a high degree of accuracy, thereby providing audit evidence for a significant item in the financial report and reducing the need to perform tests of details on the payroll. The use of widely recognised trade ratios (such as profit margins for different types of retail entities) can often be used effectively in substantive analytical procedures to provide evidence to support the reasonableness of recorded amounts.\n3.  Different types of analytical procedures provide different levels of assurance. Analytical procedures involving, for example, the prediction of total rental income on a building divided into apartments, taking the rental rates, the number of apartments and vacancy rates into consideration, can provide persuasive evidence and may eliminate the need for further verification by means of tests of details, provided the elements are appropriately verified. In contrast, calculation and comparison of gross margin percentages as a means of confirming a revenue figure may provide less persuasive evidence, but may provide useful corroboration if used in combination with other audit procedures.\n4.  The determination of the suitability of particular substantive analytical procedures is influenced by the nature of the assertion and the auditor’s assessment of the risk of material misstatement. For example, if controls over sales order processing are deficient, the auditor may place more reliance on tests of details rather than on substantive analytical procedures for assertions related to receivables.\n5.  Particular substantive analytical procedures may also be considered suitable when tests of details are performed on the same assertion. For example, when obtaining audit evidence regarding the valuation assertion for accounts receivable balances, the auditor may apply analytical procedures to an ageing of customers’ accounts in addition to performing tests of details on subsequent cash receipts to determine the collectability of the receivables.\n\nConsiderations Specific to Public Sector Entities\n\n1.  The relationships between individual financial report items traditionally considered in the audit of business entities may not always be relevant in the audit of governments or other non-business public sector entities; for example, in many public sector entities there may be little direct relationship between revenue and expenditure. In addition, because expenditure on the acquisition of assets may not be capitalised, there may be no relationship between expenditures on, for example, inventories and fixed assets and the amount of those assets reported in the financial report. Also, industry data or statistics for comparative purposes may not be available in the public sector. However, other relationships may be relevant, for example, variations in the cost per kilometre of road construction or the number of vehicles acquired compared with vehicles retired.\n\nThe Reliability of the Data (Ref: Para. 5(b))\n\n1.  The reliability of data is influenced by its source and nature and is dependent on the circumstances under which it is obtained. Accordingly, the following are relevant when determining whether data is reliable for purposes of designing substantive analytical procedures:\n    1.  Source of the information available. For example, information may be more reliable when it is obtained from independent sources outside the entity;[\\[4\\]](#_ftn6)\n    2.  Comparability of the information available. For example, broad industry data may need to be supplemented to be comparable to that of an entity that produces and sells specialised products;\n    3.  Nature and relevance of the information available. For example, whether budgets have been established as results to be expected rather than as goals to be achieved; and\n    4.  Controls over the preparation of the information that are designed to ensure its completeness, accuracy and validity. For example, controls over the preparation, review and maintenance of budgets.\n2.  The auditor may consider testing the operating effectiveness of controls, if any, over the entity’s preparation of information used by the auditor in performing substantive analytical procedures in response to assessed risks. When such controls are effective, the auditor generally has greater confidence in the reliability of the information and, therefore, in the results of analytical procedures. The operating effectiveness of controls over non-financial information may often be tested in conjunction with other tests of controls. For example, in establishing controls over the processing of sales invoices, an entity may include controls over the recording of unit sales. In these circumstances, the auditor may test the operating effectiveness of controls over the recording of unit sales in conjunction with tests of the operating effectiveness of controls over the processing of sales invoices. Alternatively, the auditor may consider whether the information was subjected to audit testing. ASA 500 establishes requirements and provides guidance in determining the audit procedures to be performed on the information to be used for substantive analytical procedures.[\\[5\\]](#_ftn7)\n3.  The matters discussed in paragraphs A12(a)-A12(d) are relevant irrespective of whether the auditor performs substantive analytical procedures on the entity’s period end financial report, or at an interim date and plans to perform substantive analytical procedures for the remaining period. ASA 330 establishes requirements and provides guidance on substantive procedures performed at an interim date.[\\[6\\]](#_ftn8)\n\nEvaluation Whether the Expectation Is Sufficiently Precise (Ref: Para. 5(c))\n\n1.  Matters relevant to the auditor’s evaluation of whether the expectation can be developed sufficiently precisely to identify a misstatement that, when aggregated with other misstatements, may cause the financial report to be materially misstated, include:\n\n-   The accuracy with which the expected results of substantive analytical procedures can be predicted. For example, the auditor may expect greater consistency in comparing gross profit margins from one period to another than in comparing discretionary expenses, such as research or advertising.\n-   The degree to which information can be disaggregated. For example, substantive analytical procedures may be more effective when applied to financial information on individual sections of an operation or to financial reports of components of a diversified entity, than when applied to the financial report of the entity as a whole.\n-   The availability of the information, both financial and  \n    non-financial. For example, the auditor may consider whether financial information, such as budgets or forecasts, and non-financial information, such as the number of units produced or sold, is available to design substantive analytical procedures. If the information is available, the auditor may also consider the reliability of the information as discussed in paragraphs A12-A13 above.\n\nAmount of Difference of Recorded Amounts from Expected Values that Is Acceptable (Ref: Para. 5(d))\n\n1.  The auditor’s determination of the amount of difference from the expectation that can be accepted without further investigation is influenced by materiality[\\[7\\]](#_ftn9) and the consistency with the desired level of assurance, taking account of the possibility that a misstatement, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated. ASA 330 requires the auditor to obtain more persuasive audit evidence the higher the auditor’s assessment of risk.[\\[8\\]](#_ftn10) Accordingly, as the assessed risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[\\[9\\]](#_ftn11)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion (Ref: Para. 6)\n\n1.  The conclusions drawn from the results of analytical procedures designed and performed in accordance with paragraph 6 are intended to corroborate conclusions formed during the audit of individual components or elements of the financial report. This assists the auditor to draw reasonable conclusions on which to base the auditor’s opinion.\n2.  The results of such analytical procedures may identify a previously unrecognised risk of material misstatement. In such circumstances, ASA 315 requires the auditor to revise the auditor’s assessment of the risks of material misstatement and modify the further planned audit procedures accordingly.[\\[10\\]](#_ftn12)\n3.  The analytical procedures performed in accordance with paragraph 6 may be similar to those that would be used as risk assessment procedures.\n\n###### Investigating Results of Analytical Procedures (Ref: Para. 7)\n\n1.  Audit evidence relevant to management’s responses may be obtained by evaluating those responses taking into account the auditor’s understanding of the entity and its environment, and with other audit evidence obtained during the course of the audit.\n2.  The need to perform other audit procedures may arise when, for example, management is unable to provide an explanation, or the explanation, together with the audit evidence obtained relevant to management’s response, is not considered adequate.","sortOrder":14},{"sectionNumber":"Scope of this Auditing Standard","sectionType":"section","heading":"Scope of this Auditing Standard","content":"###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). 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 report. ASA 315[\\[1\\]](#_ftn3) deals with the use of analytical procedures as risk assessment procedures. ASA 330 includes requirements and guidance regarding the nature, timing and extent of audit procedures in response to assessed risks; these audit procedures may include substantive analytical procedures.[\\[2\\]](#_ftn4)","sortOrder":15},{"sectionNumber":"Effective Date","sectionType":"section","heading":"Effective Date","content":"###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]","sortOrder":16},{"sectionNumber":"Objectives","sectionType":"section","heading":"Objectives","content":"##### Objectives\n\n1.  The objectives of the auditor are:\n    1.  To obtain relevant and reliable audit evidence when using substantive analytical procedures; and\n    2.  To 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 report is consistent with the auditor’s understanding of the entity.","sortOrder":17},{"sectionNumber":"Definition","sectionType":"section","heading":"Definition","content":"##### Definition\n\n1.  For purposes of the Australian Auditing Standards, the term “analytical procedures” means evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount. (Ref: Para. A1-A3)","sortOrder":18},{"sectionNumber":"Requirements","sectionType":"section","heading":"Requirements","content":"Auditing Standard ASA 520\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 520 Analytical Procedures pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 520 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 3 March 2020 (see Compilation Details).\n\n## Auditing Standard ASA 520\n\n### Analytical Procedures\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). 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 report. ASA 315[\\[1\\]](#_ftn3) deals with the use of analytical procedures as risk assessment procedures. ASA 330 includes requirements and guidance regarding the nature, timing and extent of audit procedures in response to assessed risks; these audit procedures may include substantive analytical procedures.[\\[2\\]](#_ftn4)\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objectives\n\n1.  The objectives of the auditor are:\n    1.  To obtain relevant and reliable audit evidence when using substantive analytical procedures; and\n    2.  To 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 report is consistent with the auditor’s understanding of the entity.\n\n##### Definition\n\n1.  For purposes of the Australian Auditing Standards, the term “analytical procedures” means evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount. (Ref: Para. A1-A3)\n\n##### Requirements\n\n###### Substantive Analytical Procedures\n\n1.  When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures in accordance with ASA 330,[\\[3\\]](#_ftn5) the auditor shall: (Ref: Para. A4-A5)\n    1.  Determine the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions; (Ref: Para. A6-A11)\n    2.  Evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of source, comparability, and nature and relevance of information available, and controls over preparation;  \n        (Ref: Para. A12-A14)\n    3.  Develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated; and (Ref: Para. A15)\n    4.  Determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation as required by paragraph 7 of this Auditing Standard. (Ref: Para. A16)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion\n\n1.  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 report is consistent with the auditor’s understanding of the entity. (Ref: Para. A17-A19)\n\n  \n\n###### Investigating Results of Analytical Procedures\n\n1.  If analytical procedures performed in accordance with this Auditing Standard 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:\n    1.  Enquiring of management and obtaining appropriate audit evidence relevant to management’s responses; and\n    2.  Performing other audit procedures as necessary in the circumstances.  \n        (Ref: Para. A20-A21)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Definition of Analytical Procedures (Ref: Para. 4)\n\n1.  Analytical procedures include the consideration of comparisons of the entity’s financial information with, for example:\n\n-   Comparable information for prior periods.\n-   Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor, such as an estimation of depreciation.\n-   Similar industry information, such as a comparison of the entity’s ratio of sales to accounts receivable with industry averages or with other entities of comparable size in the same industry.\n\n1.  Analytical procedures also include consideration of relationships, for example:\n\n-   Among elements of financial information that would be expected to conform to a predictable pattern based on the entity’s experience, such as gross margin percentages.\n-   Between financial information and relevant non-financial information, such as payroll costs to number of employees.\n\n1.  Various methods may be used to perform analytical procedures. These methods range from performing simple comparisons to performing complex analyses using advanced statistical techniques. Analytical procedures may be applied to a consolidated financial report, components and individual elements of information.\n\n###### Substantive Analytical Procedures (Ref: Para. 5)\n\n1.  The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both. The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgement about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level.\n2.  The auditor may enquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.\n\nSuitability of Particular Analytical Procedures for Given Assertions (Ref: Para. 5(a))\n\n1.  Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be predictable over time. The application of planned analytical procedures is based on the expectation that relationships among data exist and continue in the absence of known conditions to the contrary. However, the suitability of a particular analytical procedure will depend upon the auditor’s assessment of how effective it will be in detecting a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated.\n2.  In some cases, even an unsophisticated predictive model may be effective as an analytical procedure. For example, where an entity has a known number of employees at fixed rates of pay throughout the period, it may be possible for the auditor to use this data to estimate the total payroll costs for the period with a high degree of accuracy, thereby providing audit evidence for a significant item in the financial report and reducing the need to perform tests of details on the payroll. The use of widely recognised trade ratios (such as profit margins for different types of retail entities) can often be used effectively in substantive analytical procedures to provide evidence to support the reasonableness of recorded amounts.\n3.  Different types of analytical procedures provide different levels of assurance. Analytical procedures involving, for example, the prediction of total rental income on a building divided into apartments, taking the rental rates, the number of apartments and vacancy rates into consideration, can provide persuasive evidence and may eliminate the need for further verification by means of tests of details, provided the elements are appropriately verified. In contrast, calculation and comparison of gross margin percentages as a means of confirming a revenue figure may provide less persuasive evidence, but may provide useful corroboration if used in combination with other audit procedures.\n4.  The determination of the suitability of particular substantive analytical procedures is influenced by the nature of the assertion and the auditor’s assessment of the risk of material misstatement. For example, if controls over sales order processing are deficient, the auditor may place more reliance on tests of details rather than on substantive analytical procedures for assertions related to receivables.\n5.  Particular substantive analytical procedures may also be considered suitable when tests of details are performed on the same assertion. For example, when obtaining audit evidence regarding the valuation assertion for accounts receivable balances, the auditor may apply analytical procedures to an ageing of customers’ accounts in addition to performing tests of details on subsequent cash receipts to determine the collectability of the receivables.\n\nConsiderations Specific to Public Sector Entities\n\n1.  The relationships between individual financial report items traditionally considered in the audit of business entities may not always be relevant in the audit of governments or other non-business public sector entities; for example, in many public sector entities there may be little direct relationship between revenue and expenditure. In addition, because expenditure on the acquisition of assets may not be capitalised, there may be no relationship between expenditures on, for example, inventories and fixed assets and the amount of those assets reported in the financial report. Also, industry data or statistics for comparative purposes may not be available in the public sector. However, other relationships may be relevant, for example, variations in the cost per kilometre of road construction or the number of vehicles acquired compared with vehicles retired.\n\nThe Reliability of the Data (Ref: Para. 5(b))\n\n1.  The reliability of data is influenced by its source and nature and is dependent on the circumstances under which it is obtained. Accordingly, the following are relevant when determining whether data is reliable for purposes of designing substantive analytical procedures:\n    1.  Source of the information available. For example, information may be more reliable when it is obtained from independent sources outside the entity;[\\[4\\]](#_ftn6)\n    2.  Comparability of the information available. For example, broad industry data may need to be supplemented to be comparable to that of an entity that produces and sells specialised products;\n    3.  Nature and relevance of the information available. For example, whether budgets have been established as results to be expected rather than as goals to be achieved; and\n    4.  Controls over the preparation of the information that are designed to ensure its completeness, accuracy and validity. For example, controls over the preparation, review and maintenance of budgets.\n2.  The auditor may consider testing the operating effectiveness of controls, if any, over the entity’s preparation of information used by the auditor in performing substantive analytical procedures in response to assessed risks. When such controls are effective, the auditor generally has greater confidence in the reliability of the information and, therefore, in the results of analytical procedures. The operating effectiveness of controls over non-financial information may often be tested in conjunction with other tests of controls. For example, in establishing controls over the processing of sales invoices, an entity may include controls over the recording of unit sales. In these circumstances, the auditor may test the operating effectiveness of controls over the recording of unit sales in conjunction with tests of the operating effectiveness of controls over the processing of sales invoices. Alternatively, the auditor may consider whether the information was subjected to audit testing. ASA 500 establishes requirements and provides guidance in determining the audit procedures to be performed on the information to be used for substantive analytical procedures.[\\[5\\]](#_ftn7)\n3.  The matters discussed in paragraphs A12(a)-A12(d) are relevant irrespective of whether the auditor performs substantive analytical procedures on the entity’s period end financial report, or at an interim date and plans to perform substantive analytical procedures for the remaining period. ASA 330 establishes requirements and provides guidance on substantive procedures performed at an interim date.[\\[6\\]](#_ftn8)\n\nEvaluation Whether the Expectation Is Sufficiently Precise (Ref: Para. 5(c))\n\n1.  Matters relevant to the auditor’s evaluation of whether the expectation can be developed sufficiently precisely to identify a misstatement that, when aggregated with other misstatements, may cause the financial report to be materially misstated, include:\n\n-   The accuracy with which the expected results of substantive analytical procedures can be predicted. For example, the auditor may expect greater consistency in comparing gross profit margins from one period to another than in comparing discretionary expenses, such as research or advertising.\n-   The degree to which information can be disaggregated. For example, substantive analytical procedures may be more effective when applied to financial information on individual sections of an operation or to financial reports of components of a diversified entity, than when applied to the financial report of the entity as a whole.\n-   The availability of the information, both financial and  \n    non-financial. For example, the auditor may consider whether financial information, such as budgets or forecasts, and non-financial information, such as the number of units produced or sold, is available to design substantive analytical procedures. If the information is available, the auditor may also consider the reliability of the information as discussed in paragraphs A12-A13 above.\n\nAmount of Difference of Recorded Amounts from Expected Values that Is Acceptable (Ref: Para. 5(d))\n\n1.  The auditor’s determination of the amount of difference from the expectation that can be accepted without further investigation is influenced by materiality[\\[7\\]](#_ftn9) and the consistency with the desired level of assurance, taking account of the possibility that a misstatement, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated. ASA 330 requires the auditor to obtain more persuasive audit evidence the higher the auditor’s assessment of risk.[\\[8\\]](#_ftn10) Accordingly, as the assessed risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[\\[9\\]](#_ftn11)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion (Ref: Para. 6)\n\n1.  The conclusions drawn from the results of analytical procedures designed and performed in accordance with paragraph 6 are intended to corroborate conclusions formed during the audit of individual components or elements of the financial report. This assists the auditor to draw reasonable conclusions on which to base the auditor’s opinion.\n2.  The results of such analytical procedures may identify a previously unrecognised risk of material misstatement. In such circumstances, ASA 315 requires the auditor to revise the auditor’s assessment of the risks of material misstatement and modify the further planned audit procedures accordingly.[\\[10\\]](#_ftn12)\n3.  The analytical procedures performed in accordance with paragraph 6 may be similar to those that would be used as risk assessment procedures.\n\n###### Investigating Results of Analytical Procedures (Ref: Para. 7)\n\n1.  Audit evidence relevant to management’s responses may be obtained by evaluating those responses taking into account the auditor’s understanding of the entity and its environment, and with other audit evidence obtained during the course of the audit.\n2.  The need to perform other audit procedures may arise when, for example, management is unable to provide an explanation, or the explanation, together with the audit evidence obtained relevant to management’s response, is not considered adequate.","sortOrder":19},{"sectionNumber":"Substantive Analytical Procedures","sectionType":"section","heading":"Substantive Analytical Procedures","content":"###### Substantive Analytical Procedures\n\n1.  When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures in accordance with ASA 330,[\\[3\\]](#_ftn5) the auditor shall: (Ref: Para. A4-A5)\n    1.  Determine the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions; (Ref: Para. A6-A11)\n    2.  Evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of source, comparability, and nature and relevance of information available, and controls over preparation;  \n        (Ref: Para. A12-A14)\n    3.  Develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated; and (Ref: Para. A15)\n    4.  Determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation as required by paragraph 7 of this Auditing Standard. (Ref: Para. A16)","sortOrder":20},{"sectionNumber":"Analytical Procedures that Assist When F","sectionType":"section","heading":"Analytical Procedures that Assist When Forming an Overall Conclusion","content":"###### Analytical Procedures that Assist When Forming an Overall Conclusion\n\n1.  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 report is consistent with the auditor’s understanding of the entity. (Ref: Para. A17-A19)","sortOrder":21},{"sectionNumber":"Investigating Results of Analytical Proc","sectionType":"section","heading":"Investigating Results of Analytical Procedures","content":"###### Investigating Results of Analytical Procedures\n\n1.  If analytical procedures performed in accordance with this Auditing Standard 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:\n    1.  Enquiring of management and obtaining appropriate audit evidence relevant to management’s responses; and\n    2.  Performing other audit procedures as necessary in the circumstances.  \n        (Ref: Para. A20-A21)\n\n\\* \\* \\*","sortOrder":22},{"sectionNumber":"Application and Other Explanatory Materi","sectionType":"section","heading":"Application and Other Explanatory Material","content":"Auditing Standard ASA 520\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 520 Analytical Procedures pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 520 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 3 March 2020 (see Compilation Details).\n\n## Auditing Standard ASA 520\n\n### Analytical Procedures\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods commencing on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s use of analytical procedures as substantive procedures (“substantive analytical procedures”). 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 report. ASA 315[\\[1\\]](#_ftn3) deals with the use of analytical procedures as risk assessment procedures. ASA 330 includes requirements and guidance regarding the nature, timing and extent of audit procedures in response to assessed risks; these audit procedures may include substantive analytical procedures.[\\[2\\]](#_ftn4)\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objectives\n\n1.  The objectives of the auditor are:\n    1.  To obtain relevant and reliable audit evidence when using substantive analytical procedures; and\n    2.  To 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 report is consistent with the auditor’s understanding of the entity.\n\n##### Definition\n\n1.  For purposes of the Australian Auditing Standards, the term “analytical procedures” means evaluations of financial information through analysis of plausible relationships among both financial and non-financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount. (Ref: Para. A1-A3)\n\n##### Requirements\n\n###### Substantive Analytical Procedures\n\n1.  When designing and performing substantive analytical procedures, either alone or in combination with tests of details, as substantive procedures in accordance with ASA 330,[\\[3\\]](#_ftn5) the auditor shall: (Ref: Para. A4-A5)\n    1.  Determine the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions; (Ref: Para. A6-A11)\n    2.  Evaluate the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of source, comparability, and nature and relevance of information available, and controls over preparation;  \n        (Ref: Para. A12-A14)\n    3.  Develop an expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated; and (Ref: Para. A15)\n    4.  Determine the amount of any difference of recorded amounts from expected values that is acceptable without further investigation as required by paragraph 7 of this Auditing Standard. (Ref: Para. A16)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion\n\n1.  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 report is consistent with the auditor’s understanding of the entity. (Ref: Para. A17-A19)\n\n  \n\n###### Investigating Results of Analytical Procedures\n\n1.  If analytical procedures performed in accordance with this Auditing Standard 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:\n    1.  Enquiring of management and obtaining appropriate audit evidence relevant to management’s responses; and\n    2.  Performing other audit procedures as necessary in the circumstances.  \n        (Ref: Para. A20-A21)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Definition of Analytical Procedures (Ref: Para. 4)\n\n1.  Analytical procedures include the consideration of comparisons of the entity’s financial information with, for example:\n\n-   Comparable information for prior periods.\n-   Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor, such as an estimation of depreciation.\n-   Similar industry information, such as a comparison of the entity’s ratio of sales to accounts receivable with industry averages or with other entities of comparable size in the same industry.\n\n1.  Analytical procedures also include consideration of relationships, for example:\n\n-   Among elements of financial information that would be expected to conform to a predictable pattern based on the entity’s experience, such as gross margin percentages.\n-   Between financial information and relevant non-financial information, such as payroll costs to number of employees.\n\n1.  Various methods may be used to perform analytical procedures. These methods range from performing simple comparisons to performing complex analyses using advanced statistical techniques. Analytical procedures may be applied to a consolidated financial report, components and individual elements of information.\n\n###### Substantive Analytical Procedures (Ref: Para. 5)\n\n1.  The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both. The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgement about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level.\n2.  The auditor may enquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.\n\nSuitability of Particular Analytical Procedures for Given Assertions (Ref: Para. 5(a))\n\n1.  Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be predictable over time. The application of planned analytical procedures is based on the expectation that relationships among data exist and continue in the absence of known conditions to the contrary. However, the suitability of a particular analytical procedure will depend upon the auditor’s assessment of how effective it will be in detecting a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated.\n2.  In some cases, even an unsophisticated predictive model may be effective as an analytical procedure. For example, where an entity has a known number of employees at fixed rates of pay throughout the period, it may be possible for the auditor to use this data to estimate the total payroll costs for the period with a high degree of accuracy, thereby providing audit evidence for a significant item in the financial report and reducing the need to perform tests of details on the payroll. The use of widely recognised trade ratios (such as profit margins for different types of retail entities) can often be used effectively in substantive analytical procedures to provide evidence to support the reasonableness of recorded amounts.\n3.  Different types of analytical procedures provide different levels of assurance. Analytical procedures involving, for example, the prediction of total rental income on a building divided into apartments, taking the rental rates, the number of apartments and vacancy rates into consideration, can provide persuasive evidence and may eliminate the need for further verification by means of tests of details, provided the elements are appropriately verified. In contrast, calculation and comparison of gross margin percentages as a means of confirming a revenue figure may provide less persuasive evidence, but may provide useful corroboration if used in combination with other audit procedures.\n4.  The determination of the suitability of particular substantive analytical procedures is influenced by the nature of the assertion and the auditor’s assessment of the risk of material misstatement. For example, if controls over sales order processing are deficient, the auditor may place more reliance on tests of details rather than on substantive analytical procedures for assertions related to receivables.\n5.  Particular substantive analytical procedures may also be considered suitable when tests of details are performed on the same assertion. For example, when obtaining audit evidence regarding the valuation assertion for accounts receivable balances, the auditor may apply analytical procedures to an ageing of customers’ accounts in addition to performing tests of details on subsequent cash receipts to determine the collectability of the receivables.\n\nConsiderations Specific to Public Sector Entities\n\n1.  The relationships between individual financial report items traditionally considered in the audit of business entities may not always be relevant in the audit of governments or other non-business public sector entities; for example, in many public sector entities there may be little direct relationship between revenue and expenditure. In addition, because expenditure on the acquisition of assets may not be capitalised, there may be no relationship between expenditures on, for example, inventories and fixed assets and the amount of those assets reported in the financial report. Also, industry data or statistics for comparative purposes may not be available in the public sector. However, other relationships may be relevant, for example, variations in the cost per kilometre of road construction or the number of vehicles acquired compared with vehicles retired.\n\nThe Reliability of the Data (Ref: Para. 5(b))\n\n1.  The reliability of data is influenced by its source and nature and is dependent on the circumstances under which it is obtained. Accordingly, the following are relevant when determining whether data is reliable for purposes of designing substantive analytical procedures:\n    1.  Source of the information available. For example, information may be more reliable when it is obtained from independent sources outside the entity;[\\[4\\]](#_ftn6)\n    2.  Comparability of the information available. For example, broad industry data may need to be supplemented to be comparable to that of an entity that produces and sells specialised products;\n    3.  Nature and relevance of the information available. For example, whether budgets have been established as results to be expected rather than as goals to be achieved; and\n    4.  Controls over the preparation of the information that are designed to ensure its completeness, accuracy and validity. For example, controls over the preparation, review and maintenance of budgets.\n2.  The auditor may consider testing the operating effectiveness of controls, if any, over the entity’s preparation of information used by the auditor in performing substantive analytical procedures in response to assessed risks. When such controls are effective, the auditor generally has greater confidence in the reliability of the information and, therefore, in the results of analytical procedures. The operating effectiveness of controls over non-financial information may often be tested in conjunction with other tests of controls. For example, in establishing controls over the processing of sales invoices, an entity may include controls over the recording of unit sales. In these circumstances, the auditor may test the operating effectiveness of controls over the recording of unit sales in conjunction with tests of the operating effectiveness of controls over the processing of sales invoices. Alternatively, the auditor may consider whether the information was subjected to audit testing. ASA 500 establishes requirements and provides guidance in determining the audit procedures to be performed on the information to be used for substantive analytical procedures.[\\[5\\]](#_ftn7)\n3.  The matters discussed in paragraphs A12(a)-A12(d) are relevant irrespective of whether the auditor performs substantive analytical procedures on the entity’s period end financial report, or at an interim date and plans to perform substantive analytical procedures for the remaining period. ASA 330 establishes requirements and provides guidance on substantive procedures performed at an interim date.[\\[6\\]](#_ftn8)\n\nEvaluation Whether the Expectation Is Sufficiently Precise (Ref: Para. 5(c))\n\n1.  Matters relevant to the auditor’s evaluation of whether the expectation can be developed sufficiently precisely to identify a misstatement that, when aggregated with other misstatements, may cause the financial report to be materially misstated, include:\n\n-   The accuracy with which the expected results of substantive analytical procedures can be predicted. For example, the auditor may expect greater consistency in comparing gross profit margins from one period to another than in comparing discretionary expenses, such as research or advertising.\n-   The degree to which information can be disaggregated. For example, substantive analytical procedures may be more effective when applied to financial information on individual sections of an operation or to financial reports of components of a diversified entity, than when applied to the financial report of the entity as a whole.\n-   The availability of the information, both financial and  \n    non-financial. For example, the auditor may consider whether financial information, such as budgets or forecasts, and non-financial information, such as the number of units produced or sold, is available to design substantive analytical procedures. If the information is available, the auditor may also consider the reliability of the information as discussed in paragraphs A12-A13 above.\n\nAmount of Difference of Recorded Amounts from Expected Values that Is Acceptable (Ref: Para. 5(d))\n\n1.  The auditor’s determination of the amount of difference from the expectation that can be accepted without further investigation is influenced by materiality[\\[7\\]](#_ftn9) and the consistency with the desired level of assurance, taking account of the possibility that a misstatement, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated. ASA 330 requires the auditor to obtain more persuasive audit evidence the higher the auditor’s assessment of risk.[\\[8\\]](#_ftn10) Accordingly, as the assessed risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[\\[9\\]](#_ftn11)\n\n###### Analytical Procedures that Assist When Forming an Overall Conclusion (Ref: Para. 6)\n\n1.  The conclusions drawn from the results of analytical procedures designed and performed in accordance with paragraph 6 are intended to corroborate conclusions formed during the audit of individual components or elements of the financial report. This assists the auditor to draw reasonable conclusions on which to base the auditor’s opinion.\n2.  The results of such analytical procedures may identify a previously unrecognised risk of material misstatement. In such circumstances, ASA 315 requires the auditor to revise the auditor’s assessment of the risks of material misstatement and modify the further planned audit procedures accordingly.[\\[10\\]](#_ftn12)\n3.  The analytical procedures performed in accordance with paragraph 6 may be similar to those that would be used as risk assessment procedures.\n\n###### Investigating Results of Analytical Procedures (Ref: Para. 7)\n\n1.  Audit evidence relevant to management’s responses may be obtained by evaluating those responses taking into account the auditor’s understanding of the entity and its environment, and with other audit evidence obtained during the course of the audit.\n2.  The need to perform other audit procedures may arise when, for example, management is unable to provide an explanation, or the explanation, together with the audit evidence obtained relevant to management’s response, is not considered adequate.","sortOrder":23},{"sectionNumber":"Definition of Analytical Procedures (Ref","sectionType":"section","heading":"Definition of Analytical Procedures (Ref: Para. 4)","content":"###### Definition of Analytical Procedures (Ref: Para. 4)\n\n1.  Analytical procedures include the consideration of comparisons of the entity’s financial information with, for example:\n\n-   Comparable information for prior periods.\n-   Anticipated results of the entity, such as budgets or forecasts, or expectations of the auditor, such as an estimation of depreciation.\n-   Similar industry information, such as a comparison of the entity’s ratio of sales to accounts receivable with industry averages or with other entities of comparable size in the same industry.\n\n1.  Analytical procedures also include consideration of relationships, for example:\n\n-   Among elements of financial information that would be expected to conform to a predictable pattern based on the entity’s experience, such as gross margin percentages.\n-   Between financial information and relevant non-financial information, such as payroll costs to number of employees.\n\n1.  Various methods may be used to perform analytical procedures. These methods range from performing simple comparisons to performing complex analyses using advanced statistical techniques. Analytical procedures may be applied to a consolidated financial report, components and individual elements of information.","sortOrder":24},{"sectionNumber":"Substantive Analytical Procedures (Ref: ","sectionType":"section","heading":"Substantive Analytical Procedures (Ref: Para. 5)","content":"###### Substantive Analytical Procedures (Ref: Para. 5)\n\n1.  The auditor’s substantive procedures at the assertion level may be tests of details, substantive analytical procedures, or a combination of both. The decision about which audit procedures to perform, including whether to use substantive analytical procedures, is based on the auditor’s judgement about the expected effectiveness and efficiency of the available audit procedures to reduce audit risk at the assertion level to an acceptably low level.\n2.  The auditor may enquire of management as to the availability and reliability of information needed to apply substantive analytical procedures, and the results of any such analytical procedures performed by the entity. It may be effective to use analytical data prepared by management, provided the auditor is satisfied that such data is properly prepared.\n\nSuitability of Particular Analytical Procedures for Given Assertions (Ref: Para. 5(a))\n\n1.  Substantive analytical procedures are generally more applicable to large volumes of transactions that tend to be predictable over time. The application of planned analytical procedures is based on the expectation that relationships among data exist and continue in the absence of known conditions to the contrary. However, the suitability of a particular analytical procedure will depend upon the auditor’s assessment of how effective it will be in detecting a misstatement that, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated.\n2.  In some cases, even an unsophisticated predictive model may be effective as an analytical procedure. For example, where an entity has a known number of employees at fixed rates of pay throughout the period, it may be possible for the auditor to use this data to estimate the total payroll costs for the period with a high degree of accuracy, thereby providing audit evidence for a significant item in the financial report and reducing the need to perform tests of details on the payroll. The use of widely recognised trade ratios (such as profit margins for different types of retail entities) can often be used effectively in substantive analytical procedures to provide evidence to support the reasonableness of recorded amounts.\n3.  Different types of analytical procedures provide different levels of assurance. Analytical procedures involving, for example, the prediction of total rental income on a building divided into apartments, taking the rental rates, the number of apartments and vacancy rates into consideration, can provide persuasive evidence and may eliminate the need for further verification by means of tests of details, provided the elements are appropriately verified. In contrast, calculation and comparison of gross margin percentages as a means of confirming a revenue figure may provide less persuasive evidence, but may provide useful corroboration if used in combination with other audit procedures.\n4.  The determination of the suitability of particular substantive analytical procedures is influenced by the nature of the assertion and the auditor’s assessment of the risk of material misstatement. For example, if controls over sales order processing are deficient, the auditor may place more reliance on tests of details rather than on substantive analytical procedures for assertions related to receivables.\n5.  Particular substantive analytical procedures may also be considered suitable when tests of details are performed on the same assertion. For example, when obtaining audit evidence regarding the valuation assertion for accounts receivable balances, the auditor may apply analytical procedures to an ageing of customers’ accounts in addition to performing tests of details on subsequent cash receipts to determine the collectability of the receivables.\n\nConsiderations Specific to Public Sector Entities\n\n1.  The relationships between individual financial report items traditionally considered in the audit of business entities may not always be relevant in the audit of governments or other non-business public sector entities; for example, in many public sector entities there may be little direct relationship between revenue and expenditure. In addition, because expenditure on the acquisition of assets may not be capitalised, there may be no relationship between expenditures on, for example, inventories and fixed assets and the amount of those assets reported in the financial report. Also, industry data or statistics for comparative purposes may not be available in the public sector. However, other relationships may be relevant, for example, variations in the cost per kilometre of road construction or the number of vehicles acquired compared with vehicles retired.\n\nThe Reliability of the Data (Ref: Para. 5(b))\n\n1.  The reliability of data is influenced by its source and nature and is dependent on the circumstances under which it is obtained. Accordingly, the following are relevant when determining whether data is reliable for purposes of designing substantive analytical procedures:\n    1.  Source of the information available. For example, information may be more reliable when it is obtained from independent sources outside the entity;[\\[4\\]](#_ftn6)\n    2.  Comparability of the information available. For example, broad industry data may need to be supplemented to be comparable to that of an entity that produces and sells specialised products;\n    3.  Nature and relevance of the information available. For example, whether budgets have been established as results to be expected rather than as goals to be achieved; and\n    4.  Controls over the preparation of the information that are designed to ensure its completeness, accuracy and validity. For example, controls over the preparation, review and maintenance of budgets.\n2.  The auditor may consider testing the operating effectiveness of controls, if any, over the entity’s preparation of information used by the auditor in performing substantive analytical procedures in response to assessed risks. When such controls are effective, the auditor generally has greater confidence in the reliability of the information and, therefore, in the results of analytical procedures. The operating effectiveness of controls over non-financial information may often be tested in conjunction with other tests of controls. For example, in establishing controls over the processing of sales invoices, an entity may include controls over the recording of unit sales. In these circumstances, the auditor may test the operating effectiveness of controls over the recording of unit sales in conjunction with tests of the operating effectiveness of controls over the processing of sales invoices. Alternatively, the auditor may consider whether the information was subjected to audit testing. ASA 500 establishes requirements and provides guidance in determining the audit procedures to be performed on the information to be used for substantive analytical procedures.[\\[5\\]](#_ftn7)\n3.  The matters discussed in paragraphs A12(a)-A12(d) are relevant irrespective of whether the auditor performs substantive analytical procedures on the entity’s period end financial report, or at an interim date and plans to perform substantive analytical procedures for the remaining period. ASA 330 establishes requirements and provides guidance on substantive procedures performed at an interim date.[\\[6\\]](#_ftn8)\n\nEvaluation Whether the Expectation Is Sufficiently Precise (Ref: Para. 5(c))\n\n1.  Matters relevant to the auditor’s evaluation of whether the expectation can be developed sufficiently precisely to identify a misstatement that, when aggregated with other misstatements, may cause the financial report to be materially misstated, include:\n\n-   The accuracy with which the expected results of substantive analytical procedures can be predicted. For example, the auditor may expect greater consistency in comparing gross profit margins from one period to another than in comparing discretionary expenses, such as research or advertising.\n-   The degree to which information can be disaggregated. For example, substantive analytical procedures may be more effective when applied to financial information on individual sections of an operation or to financial reports of components of a diversified entity, than when applied to the financial report of the entity as a whole.\n-   The availability of the information, both financial and  \n    non-financial. For example, the auditor may consider whether financial information, such as budgets or forecasts, and non-financial information, such as the number of units produced or sold, is available to design substantive analytical procedures. If the information is available, the auditor may also consider the reliability of the information as discussed in paragraphs A12-A13 above.\n\nAmount of Difference of Recorded Amounts from Expected Values that Is Acceptable (Ref: Para. 5(d))\n\n1.  The auditor’s determination of the amount of difference from the expectation that can be accepted without further investigation is influenced by materiality[\\[7\\]](#_ftn9) and the consistency with the desired level of assurance, taking account of the possibility that a misstatement, individually or when aggregated with other misstatements, may cause the financial report to be materially misstated. ASA 330 requires the auditor to obtain more persuasive audit evidence the higher the auditor’s assessment of risk.[\\[8\\]](#_ftn10) Accordingly, as the assessed risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[\\[9\\]](#_ftn11)","sortOrder":25}],"analysis":{"kimi_summary":{"_metrics":{"provider":"moonshot","completionTokens":1890},"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"The standard remains focused on its original purpose: governing the use of analytical procedures in audits. While it has been amended twice (in 2018 and 2020) to update footnotes and cross-references to other standards, these are technical maintenance amendments that have not expanded the scope beyond analytical procedures."},"complexity_factors":["Multiple cross-references to other auditing standards (ASA 101, ASA 200, ASA 315, ASA 330, ASA 500) that must be read together","Technical defined terms requiring specialized audit knowledge (e.g., 'assertions', 'substantive procedures', 'material misstatement')","21 paragraphs of application guidance (A1-A21) explaining implementation with nested sub-points","Layered amendments with different operative dates (original 2009 standard, plus amendments from 2018 and 2020 with staggered commencement)","Conditional logic and professional judgment requirements throughout (e.g., 'if controls are effective...', 'sufficiently precise', 'acceptable without further investigation')","Specific carve-outs and considerations for public sector entities that differ from private sector application"],"plain_english_summary":"This standard tells auditors how to use **analytical procedures** — essentially, checking whether financial numbers make sense by examining relationships between them (like comparing this year’s sales to last year’s, or verifying that payroll costs match the number of employees).\n\n**Who it affects:**\nAuditors conducting financial statement audits under the *Corporations Act 2001* (for full years or half-years), as well as audits of other historical financial information.\n\n**What it requires:**\n*   **When gathering detailed evidence:** If auditors use analytical procedures to test specific claims (assertions) in the financial statements — called *substantive analytical procedures* — they must ensure the data is reliable, develop precise expectations of what the numbers should be, and decide what size difference is acceptable before investigating further.\n*   **At the end of every audit:** Auditors **must** perform analytical procedures to form an overall conclusion about whether the financial report as a whole matches their understanding of the business.\n*   **If something looks wrong:** When analysis reveals unexpected fluctuations or relationships, auditors must investigate by questioning management and performing additional checks if the explanations aren’t convincing.\n\n**Why it matters:**\nIt ensures auditors don’t just rely on checking individual invoices and records (*tests of details*), but also use “big picture” analysis to spot unusual patterns, errors, or potential fraud that detailed testing might miss."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":true,"description":"The AUASB adopted ISA 520 and added Australia‑specific material (prefix ‘Aus’), explicit application to audits under the Corporations Act and operative‑date provisions (Aus 0.1–Aus 0.3; Authority Statement). The core ISA subject‑matter remains, but the compilation and Amending Standards introduced local application notes, public‑sector considerations and paragraph amendments (Compilation Details; Table of Amendments), so scope is marginally extended for Australian statutory and sectoral contexts."},"complexity_factors":["Extensive reliance on auditor judgement to choose procedures and thresholds (Requirements: Para.5; A4–A5).","Multiple cross‑references to other standards (ASA 315, ASA 330, ASA 500) so application depends on reading several instruments (Introduction: Para.1; Authority Statement).","Assessment of data reliability requires evaluating source, comparability, nature and internal controls (Application material: A12–A14).","Need to develop sufficiently precise expectations and decide acceptable differences tied to materiality — a technical, context‑sensitive exercise (Ref: Para.5(c); A15–A16; A16/A5(d)).","Procedural variety from simple comparisons to advanced statistical models increases methodological complexity (Definition/Application material: A1–A3).","Special considerations for public sector entities change which relationships are relevant and may limit comparative data (Considerations Specific to Public Sector Entities).","Compilation and amendments across dates and added Australian‑specific paragraphs (Compilation Details; Aus 0.1–Aus 0.3) require attention to operative dates and localised text."],"plain_english_summary":"Mechanically, ASA 520 requires auditors to use analytical procedures as substantive audit tests and to perform analytical checks near audit completion: decide whether a procedure is suitable, assess the reliability of the data, form expectations and investigate significant deviations. It applies to audits of financial reports under the Corporations Act and other audits; the AUASB describes its purpose as obtaining relevant, reliable evidence and helping the auditor form an overall conclusion."}},"importantCases":[],"_links":{"self":"/api/acts/asa-520-analytical-procedures-october-2009","history":"/api/acts/asa-520-analytical-procedures-october-2009/history","analysis":"/api/acts/asa-520-analytical-procedures-october-2009/analysis","conflicts":"/api/acts/asa-520-analytical-procedures-october-2009/conflicts","importantCases":"/api/acts/asa-520-analytical-procedures-october-2009/important-cases","documents":"/api/acts/asa-520-analytical-procedures-october-2009/documents"}}