Annual Audit Manual
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7033.3 Compute differences
Jul-2017
In This Section
OAG Guidance
Step 3: Compute differences
The third step is the comparison of the expected value with the recorded amounts and the identification of significant differences, if any. This is simply a mechanical calculation. It is important to note that the computation of differences is done after the consideration of an expectation and threshold. In applying substantive analytical procedures, it is not appropriate to first compute differences from prior-period balances and then let the results influence the “expected” difference and the acceptable threshold.
Document the difference between our expected amount and the actual result. For documenting this step of the four-step process, use the substantive analytics procedures for the specific financial statement line item (FSLI) from the relevant cabinet: IFRS, or PSAS—Substantive Tests.