res are used by auditors so the accounting experts could plan about an organization’s internal system, its business and core segments as well as to plan about degree of other auditing techniques, tools and instruments. Nevertheless, auditing is facilitated from these procedures as they could also help in identifying the areas where there are chances for greater ‘audit risk’. Indeed, the applications of such procedures are extremely helpful as they enhance the auditors’ awareness of various underlying areas in a business entity, which had not been touched upon in past and thus require more attention to identify possible auditing risks. Finally, analytical review procedures are largely based on periodic ‘financial information, management accounts and budgets’ (Internet: frc.org.uk, 1995).
It should be pointed out that auditors could use financial resources such as budgets, forecasts, statements etc. to develop expectations. In addition, non-financial information such as production and sales details in terms of number of units, sizes and packaging could also be beneficial, since it may prove to be pertinent during auditing process (Internet: frc.org.uk, 1995).
The two major types of auditing tests are Test of Control and Substantive test of transactions and balances. Indeed, the substantive test refers to an auditing technique through which the auditors tend to recheck balances of all accounts separately to verify whether amounts are rightly entered (in the ledgers or not), complete, accurate etc. In addition, the test not only centers about transactions and balances but it could also include analytical procedures for validation and auditing. For instance, these tests are conducted to ensure that accounting standards are rightly applied on business transactions to obtain correct balances as they are later used in preparation of financial statements. Any errors are rectified after complete auditing process. For example, a Chartered Accountant may verify