Analytical procedures used in planning the audit should focus on enhancing the auditor's understanding of the client's business and the transactions and events that have occurred since the last audit date.
The auditor should consider the methods the entity uses to process accounting information in planning the audit because such methods influence the design of internal control.
Knowledge about the design of relevant internal controls and whether they have been placed in operation should be used to identify types of misstatements.
When an analytical procedure is used as the principal substantive test of a significant financial statement assertion, the auditor is required to document both the auditor's expectation and the factors considered in developing that expectation.
Only reviewing drafts of the F/S will provide evidence regarding presentation and disclosure.
The objective of tests of details of transactions performed as substantive tests is to detect material (dollar) misstatement in the F/S.