The Audit and Attest Standards staff, with input from the AICPA Accounting and Review Services Committee, developed this Practice Aid, Analytical Review Procedures in a Review of Financial Statements, to illustrate and demonstrate the importance of two of the most misunderstood concepts when applying analytical procedures in a review engagement:
forming expectations, and
considering the precision of the expectation.
These concepts are particularly important because the results of the accountant’s analytical procedures substantially contribute to the information the accountant