ANALYTICAL PROCEDURES: A Data Envelopment Analysis Approach
34 Pages Posted: 30 Jul 2008 Last revised: 4 Jan 2019
Date Written: August 1, 2003
We demonstrate the usefulness of Data Envelopment Analysis (DEA) as an analytical procedure for auditors, especially in the planning stage of the audit, to determine the extent of audit and to assess the preliminary risk level of the client. DEA based analytical procedures can provide consistent and reliable red flags and benchmarks for auditors to compare a client to other firms in the same industry. We provide an illustrative use of DEA as an analytical procedure for auditing a client in the oil and gas industry.
Keywords: Risk, Analytical Procedures, Benchmarks, Red Flags, Audit, DEA, Political Economy
JEL Classification: C44, C61, C67, D57, G1, G2, G3, M4
Suggested Citation: Suggested Citation