This paper reports the results of the first comprehensive survey to investigate the use of analytical review (AR) by external auditors in the UK. The research indicates that extent of usage varies significantly according to firm size and with each audit stage. Results suggest that the recent Auditing Standard which mandates the use of AR at both the planning and review stages will raise standards of practice; in particular those of smaller firms. More effective audit comfort, rather than competition between firms, was regarded as the most important factor driving the increased use of AR. Straightforward AR techniques were regarded as cost-effective and were found to dominate. Regression analysis, on the other hand, was regarded as cost ineffective and to require expert knowledge.
FRASER, I. A. M., HATHERLY, D. J., & LIN, Z. K. (1997). An empirical investigation of the use of analytical review by external auditors. British Accounting Review, 29(1), 35-47. https://doi.org/10.1006/bare.1996.0034