SPECIFIC APPLICATIONS OF ANALYTICAL PROCEDURES IN THE BUSINESS PARTNERSHIP’S EFFICIENCY AUDIT

The auditor, during the audit of business partnership efficiency, based on the result as the formation of appropriate evidence, should apply not only to the classical method of auditing, but also to specific analytical procedures. They will identify non-financial differences between potential business partners and, as a result, the auditor will carry out an appropriate assessment. There is an objective necessity of the analytical procedures application for auditing the efficiency of business partnership and problems related to the assessment of business partners, for the auditor, because, in this case, the control and test procedures will be actually enough. Analytical procedures for auditing the efficiency of business partnership include the use of not only financial, but also operating data. It is therefore necessary to supply the definition of analytical procedures, and it should be noted, that they consist of comparisons, calculations, observations, inspections, carried out to ensure that the auditor could satisfy the expectations about the correlation between financial and operational data. The methods of analytical procedures to be applied in solving this problem include a significant amount of work on establishing an acceptable level of acceptable risks and materiality to prevent material inconsistency, and using various mathematical and statistical methods. These statistical methods and analysis, such as comparison, grouping, detailing indicators, indices, elimination, balance, etc. are used in the analytical procedures of the audit. Analytical procedures include estimation of accounting and other reports based on the study and comparison of balance sheet ratios (ratios) and performance indicators of financial and economic activity of the studied potential business partners. The aim of their application is to assist the auditor in forming his reasonable competent opinion. The goal of the analytical procedures is to identify unusual or wrong reported economic facts and to establish the causes of errors and distortions. Analytical procedures are aimed at improving the efficiency of audits by reducing the complexity of the work performed and improving their quality. To perform analytical procedures template files should be prepared. This helps to perform and execute all calculations, taking into account a single methodological approach. They are substantive procedures, performed to detect material misstatement at the assertion level, and consist of checking details of transactions classes, account balances and disclosures, and so, they actually are analytical procedures. Analytical procedures may be performed throughout the audit, and the auditor should plan and perform analytical procedures at the planning stage, directly during the audit and at the end of work. Analytical procedures essentially tend more to the large volume of transactions that can be expected over time, and in some cases the auditor may determine that only performing analytical procedures can substantially reduce the risks of material misstatement to an acceptably low level. In other situations, the auditor may determine that appropriate checks of only details or a combination of analytical procedures and checks can essentially provide the most detailed information on the assessed risks. Thus, the analytical procedures efficiency of the business partnership audit is decisive, because they help the auditor obtain a broad evidence base to express an objective auditing opinion. Meanwhile, their use can minimize time and maximize verifying the audit’s accuracy, which is decisive in the today's demanding business environment.