ASA 520 - Analytical Procedures - April 2006
Investigating Unusual ItemsInvestigating Unusual Items
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Investigating Unusual Items
27 When analytical procedures identify significant fluctuations or relationships that:
(a) are inconsistent with other relevant information; or
(b) deviate from predicted amounts,
the auditor shall investigate and obtain adequate explanations and appropriate corroborative audit evidence.
28 The investigation of unusual fluctuations and relationships ordinarily begins with enquiries of management, followed by:
(a) corroboration of management responses, for example by comparing them with the auditor’s understanding of the entity and other audit evidence obtained during the course of the audit; and
(b) consideration of the need to apply other audit procedures based on the results of such enquiries if management is unable to provide an explanation, or if the explanation is not considered adequate.