Substantive Expectations (Burlington Bees)

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Developing an objective expectation is considered a critical step in conducting analytical procedures. This expectation is a sort of prediction of results in conducting these procedures, and has to be independent in order to carry more weight in the decision making process. In relation to the case at hand, the Burlington Bees (BBs), we will perform substantive analytical procedures in order to be able to verify ticket revenue for 2014, to a close proximity with 2013.
Analytical procedures are used at the initiation of an audit in order to carve a clear path into what areas, accounts in particular, of the financial statements of the company we will be placing more emphasis on in order to identify and assess the risks of material misstatement …show more content…

First, the development of an independent expectation is required, which will have to be objective in order for the procedures to be effective. In general, auditors will develop the expectation by using reasonable relationships depending on equivalent financial information from prior periods or information regarding the specific industry in which the client operates, as well as foreseen results (e.g. budgets). For our BBs case we will use information that we can verify even from outside of the company, as in the number of games played during the season and the numbers of attendance to the games, information that is usually published on periodicals and websites. We are fortunate enough that BBs are using and independent outside source, Tickets R Us, in order to provide us with the number of attendants to all the games in the season at hand, 2014. This will provide more assurance for us and reduce our risk of material misstatements because the information is not internal. In regards to the price of tickets we will use an estimated increase in the ticket sales from what we observe in our prior years working

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