Substantive Analytical Procedures

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Accounting glossary · Understand, connect, apply

Substantive analytical procedures use relationships among financial and nonfinancial information to develop an expectation and investigate significant differences from recorded amounts.

Example

An auditor estimates rental revenue using occupied units and contractual rates, then investigates a material difference from the ledger total.

Remember the difference

A useful expectation requires reliable data and enough precision to identify a potentially material misstatement.

Browse the accounting glossary · PCAOB reference: AS 2305

Prepared with AI assistance. Examples are fictional and simplified for learning.

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Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.

Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.

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