Academy of Accounting and Financial Studies Journal (Print ISSN: 1096-3685; Online ISSN: 1528-2635)


The Impact of Applying Analytical Procedures by External Auditor in Accordance With ISA 520 on Audit Performance Improvement: An Exploratory Study in the Iraqi Audit Firms and Companies

Author(s): Adnan Kadhum Matrood, Diana Naeemah Abd alrazaq, Naeem Sabah Khilkhal

The accounting and auditing profession has faced serious challenges in distorting the financial statements it presents, contrary to the reality of events or economic events related thereto. Data can be manipulated to achieve different objectives. To ensure the fairness and clarity of the financial statements, there must be an effective internal control system that ensures the preservation of the material resources of the economic unit and the accuracy of the financial statements. Therefore, the management and other beneficiaries must be persuaded to rationalize and maintain the resources. Errors, manipulation, detection and treatment when they occur. In addition, there should be an external independent control body that checks and examines the various activities according to predefined criteria and bases The outcome of these bodies, in cooperation and coordination with the internal control bodies, should be to verify the correctness of the accounting information provided and ensure they are free of material errors and thus reflect the fairness and clarity of the results of the activity within a specified period of time and the financial position at the end of that period. The study has reached some conclusions, the most important of which are: (1) the use of analytical auditing procedures helps the auditor in the planning and timing of the audit because of its significant impact in detecting manipulation and misrepresentation of financial statements, and (2) the lack of conducting training courses represents an obstacle that prevents the Iraqi auditor from using the analytical auditing procedures. Finally, the study ended up with some important recommendations the most important of which are: (1) Certified Public Accountants Association should organize workshops, courses and seminars for Iraqi chartered accountant on the use of analytical procedures, (2) Supervising audit firms, including the Iraqi Association of Certified Public Accountants, must require audit offices to develop performance control procedures.