What is the Analytical Procedures Report?
The Analytical Procedures (AP) is an 8-10 page report with comprehensive analysis including text, graphs, trend and ratio analysis, detailed industry comparisons and an analytical procedures documentation worksheet. This report can be used to save significant time in the initial and final –analytical procedures process.
Key Facts
- The Analytical Procedures is one of our most detailed reports.
- It is used by CPAs who are conducting an audit or review.
- AP helps comply with SSARS No. 122 section 80, SAS Nos. 132, 122 AU-C, 230, 265, 315, 520, 570, Audit Documentation and AICPA Review Guidelines.
- This report is used for audit and review documentation and analysis.
- AP automates the task of developing and documenting expected values for your working papers.
- Accountants use this report internally as part of working papers.
- The report can be downloaded into a portable Excel file and edited.
How to Generate an Analytical Procedures Report
To generate an Analytical Procedures report, click on the green 'Run Reports' box on the ProfitCents homepage. Then, select 'Analytical Procedures for Audits & Reviews'.
Run a New Report for a Company New to the System
I. COMPANY INFORMATION
Company ID: Assign your client an anonymous ID. This can be any combination of numbers or letters. The purpose of the Company ID is so you can identify the client but still keep the data anonymous. The Company ID can be edited/changed once the completed report is generated.
Country, State/Equivalent, Postal/Zip Code: Enter the appropriate information for the client in these fields. The Postal/Zip Code is an optional field and you may leave it blank if you wish. Your firm’s postal code can be used if the client’s is unknown.
Organization Type: Select the appropriate organization type from the dropdown box. This will help us classify the data, but does not change the report.
II. INDUSTRY SELECTION
Please select the industry in which the company operates. Our industries are organized by NAICS codes (2017).
1) GO: Type the exact NAICS code input box then click on "GO" the button. This will take you to the next step.
2) FIND: Type part or the entire industry name in this search box then click on the "FIND" button. This will bring up a list of industry codes associated with the word you typed. Click the link that matches the industry for which you are looking. This will take you to the next step.
3) Complete Search: To the right of the GO and FIND options you will see the "CLICK HERE FOR DETAILED NAICS LISTING" button that is linked to the NAICS website. Clicking this button will open the NAICS website in a new browser window. From the NAICS website you can perform a Keyword Search. By typing in a keyword, you will be given a list of possible industries and NAICS codes. Once you find the industry you are looking for, type the NAICS code into the Sageworks
industry FIND box. This will bring up the link associated with the NAICS code you entered. Click on the appropriate link. This will take you to the next step.
4) Drill-Down Search: Find the Primary Industry Category that the industry you are looking for would fall under in the scroll down box. Double click on that Primary Industry Category. This will bring up a list of Summary Industry Categories. Double click on the Summary Industry Category that best fits the industry for which you are looking. You will then see a list of possible industry codes. Select the appropriate industry code and click the "CONTINUE" button. This will take you to the next step.
III. ANALYSIS SELECTION
Number of Financial Periods to be Analyzed: You may enter two to five periods of financial data. The default is set to analyze three periods of data. Please note that you must enter at least three periods of data in order for Expected Values to be calculated. If you choose to only input two periods of data, Expected Values will not be included in the report, but the report will generate a prior year comparison with a percent change.
Length of Each Period: Select the length of each period of data you will enter. You may select a period length of one month to twelve months. You must enter ‘like’ periods (for example, three months compared to three months). * To annualize data, select “Twelve Months”
Type of Analysis: Choose which analysis you would like to perform. If you enter twelve months data, the analysis will be based on “12 months against the same 12 months from the previous year.” If you enter monthly data, you will have the option of analyzing the number of months against the same number of months that directly preceded them OR the same months from the previous year (for example, Jan 2009 vs. Jan 2008 OR Jan 2009 vs. Dec 2008). After this step is completed, click "CONTINUE".
IV. INCOME STATEMENT
You are now on the Income Statement page. This is the step in which you will input your client’s income statement data.
From here you can start by entering the Period End Date for the periods of data you will be inputting.
Input the appropriate data for the corresponding periods. Hover your cursor over the account name, Click the name and a pop-up will display the account explanation. Click the (T) to find its location on a tax form.
Adding a Sub-Account
In the Analytical Procedures report, you have the option of adding subaccounts to the input fields of the income statement and balance sheet. This will allow you to break down certain line items so that the input is more detailed and specific.
To add a subaccount on the Income Statement page, locate the input you would like to break down into subaccounts. To the right of that input field is a link folder icon, click on the folder icon and enter the sub-account name and value (multiple sub-accounts can be entered). After you name the subaccount, you may input the financial data for that account. There is a gray ‘X’ located to the left of the new subaccount. Clicking this ‘X’ will delete the subaccount you created.
QUICK TIP: All input fields will act as a calculator if needed.
Once you have completed the data entry for the Income Statement page, click "CONTINUE" at the bottom of the screen.
V. BALANCE SHEET
You are now at the Balance Sheet page. This is the step in which you will input your client’s balance sheet data.
From here, you can begin to input the data from your client’s balance sheet for each period.
Input the appropriate data for the corresponding periods. Hover your cursor over the account name, Click the name and a pop-up will display the account explanation. Click the (T) to find its location on a tax form.
QUICK TIP: If you leave the optional input of Number of Employees (FTE) as zero it will not be analyzed in the report and number of employees will not be included in the raw data section of the report.
Once you have completed the data entry for the Balance Sheet, click "CONTINUE" at the bottom of the screen.
VI. REPORT INFORMATION
After generating your report, you can customize it by clicking "Customize Report".
Accounting Method: Select the accounting method used to prepare the financial data. Choose between Cash Based or Accrual.
Scoring Format: Select the scoring format you would like to use on the report. Choose between Bar Scores, Number Scores, or Don't Show.
Chart Format: Select the chart format you would like to use on the report. Choose between 2D, 3D, or Don't Show.
SSARS No. 9 Analysis: Select whether or not you would like to include SSARS No. 9 Analysis.
Real Time Industry Data: Select if you would like to include industry data. If so, choose Include Real-Time Average or Include Real-Time Average and Industry Trends.
Include Client Data: If you have at least five clients for the chosen industry, you can choose whether to include client data.
Turnover Ratios: Select whether to include turnover ratios.
Tips for Improvement: Select whether you would like to include tips for improvement.
Further Customization: You may also:
• Build your own cover page and upload your firm logo
• You have the option to include real-time industry data and customize it with filters including time period, region, state and/or sales range
When you have completed the above steps, scroll to the bottom of the page and click on the "RUN REPORT AND SAVE AS A NEW REPORT" button. Your report will then be generated.