Determine the factors of auditors
When anticipating to apply analytical review as a substantive procedure, auditors determine a number of factors like:
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Factor
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Impact on use
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Plausibility/predictability of relationships
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If relationship is strong (for example commission on sales) analytical procedure may suffice.
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Degree of disaggregation of available
information
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Procedures are more effective when applied to components.
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Availability of financial and non-financial
data
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Independently prepared non-financial data will allow more effective procedures.
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Relevance of information
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Budgets which are based on expectation are more useful than targets.
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Comparability of information
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Broad industry data (for example RPI) mayn't be relevant to specialised industry.
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Knowledge gained previously
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Effective procedures are based on recognising unexpected/unusual variations.
If knowledge is limited, it's difficult to know what to expect.
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Reliability of various forms of data
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If data used is unreliable, then any results are equally unreliable hence procedures less effective.
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Nature of enterprise and its operations
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Some businesses lend themselves to analytical procedures as steady trends develop therefore easier to know what to expect and spot variations.
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