Preliminary Analytical Procedures — ICAI Audit Working Paper

The preliminary analytical procedures working paper from ICAI AASB's Audit Working Paper Templates (June 2023). Pre-stamped with your firm letterhead, editable in Word.

Free · ICAI AASB (June 2023)

Updated 28 May 2026

Source

ICAI AASB (June 2023)

Chapter

2. Planning

Section

2.13

Format

Microsoft Word (.docx)

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Preliminary Analytical Procedures — ICAI Audit Working Paper

28 August 2026

(Following draft may be used)

Preliminary Analytical

Objective:

The objective of this document is to assess whether the overall review of financial statements at the end of the audit are consistent with our findings during the audit.

Procedures Performed:

Obtained the financial statements for the year and previous year. Refer other analytical procedures as per para A13 of SA 315.

Plotted the numbers of both the years for each caption of financial statements. (Statement of Profit & Loss and Balance Sheet).

Computed the variances between both the years in terms of numbers and percentage.

Noted down the reasons for such variances. When particularly complex or unusual issues/variances are involved, and the audit is performed by a sole practitioner, it may be desirable to consult with other suitably experienced auditors or the auditor’s professional body. Discussed the variances with the management and take appropriate action.

Outcome:

Refer attachment.

(In the attachment, financial statements/information provided by entity/any other information used for working and variances to be attached)

Chapter	2.14*		Name
Topic	Variance Analysis-BS	Prepared	C
The client	XYZ Company Private Limited	Reviewed	T
Task	Statutory Audit	Approved	A
Period	for the year ended March 31, 2xx3

(Following draft may be used)

* The table given below is for illustrative purpose.

Balance Sheet	Year ended March 31, 2xx3	Year ended March 31, 2xx2	Varia-nce	% Variance
ASSETS
Non-current assets
Property, plant, and equipment				xx.xx%
Capital work-in-progress				xx.xx%
Financial assets
i. Loans - Security Deposit (Non-Current)				x.xx%
ii. Other financial assets – a. Fixed deposits with banks with maturity period for more than 12 months				x.xx%
b. Insurance claim receivable				xx.xx%
iii. Government grants				-
Current tax assets (net)			-	-
Advance Tax/Tax Deducted at Source Receivable				xx.xx%
Other non-current assets			-	-
Prepaid expenses	-			xx.xx%
Capital advances	-			xx.xx%
Current assets:
Inventories
Raw Materials and Packing Materials				xx.xx%
Stores and Spares				xx.xx%
Finished Goods - Repacking (SIT)				xx.xx%
Finished Goods - Manufactured				xx.xx%
Work in Progress				xx.xx%
Financial assets
i. Trade receivables				xx.xx%
ii. Cash and cash equivalents			-	-
Balance with banks				xx.xx%
Cash on hand				xx.xx%
iii. Loans - Security Deposit (Current)				xx.xx%
Other current assets
- Prepaid expenses				xx.xx%
- Balance with government authorities				xx.xx%
- Imprest advances				xx.xx%
- Advance to suppliers for goods and services				xx.xx%
- Tax receivable from exports				x.xx%
TOTAL ASSETS

EQUITY AND LIABILITIES
Equity
Equity share capital			-	-
Other Equity				xx.xx%
Non-current liabilities
i. Borrowings			-	-
ii. Other financial liabilities - non-Current
Lease Liability				xxx.xx%
Interest accrued but not due on borrowings	-			xxx.xx%
Security deposits				xxx.xx%
Provisions - Non-Current
- Provision for gratuity				xx.xx%
- Provision for Compensated absences				xx.xx%
- Provision for decommissioning				x.xx%
Other liabilities
Deferred grant				xx.xx%
Current liabilities			-	-
Financial liabilities
i. Borrowings - Loans from Local Banks				xx.xx%
ii. Trade payables				xx.xx%
iii. Other financial liabilities
- Dues to Related Party-Current maturities of long-term debt			-	-
Interest accrued but not due on borrowings				xx.xx%
- Employee benefits payable				xx.xx%
Accounts Payable Other Assets Overseas		-
- Capital creditors	-			xxx.xx%
- Capital creditors related parties				xx.xx%
- Derivative Liability (MTM Loss)				xx.xx%
- Lease Liability				xx.xx%
Provisions
- Provision for gratuity				xx.xx%
- Provision for compensated absences				xx.xx%
- Provision for expenses				xx.xx%
Other liabilities
- Statutory dues payable				xx.xx%
- Advance from customers				xx.xx%
- Accrued expenses				xx.xx%
TOTAL LIABILITIES
Difference

Chapter	2.14*		Name
Topic	Variance Analysis-PL	Prepared	C
The client	XYZ Company Private Limited	Reviewed	T
Task	Statutory Audit	Approved	A
Period	for the year ended March 31, 2xx3

(Following draft may be used)

* The table given below is for illustrative purpose.

Statement of Profit & Loss	Year ended March 31, 2xx3	% Variance
Income
Revenue from operations:
Sale of products (including excise duty)*		xx.xx%
Other operating revenue (e.g. Scrap Sales)		xx.xx%
Other income
Interest income
from financial assets at amortised cost		xx.xx%
On Income Tax Refund		xxx.xx%
Gain on foreign exchange fluctuation (Net)		xx.xx%
Income from Government grants		xx.xx%
Miscellaneous income		xx.xx%
Gain on derivatives		-
Allowances for Expected Credit Loss - written back		xx.xx%
Total Income		xx.xx%
Expenses:
Cost of materials Consumed		xx.xx%
Opening Stock		x.xx%
Purchases during the year		xx.xx%
Less: - Inventory destroyed due to Fire	-	xx.xx%
Less: Closing Stock		xx.xx%
Purchase of stock-in-trade
- Traded Goods		xx.xx%
Finished Goods - Re-packed Goods		xx.xx%
Changes in inventories of work-in-progress, stock-in-trade and finished goods		xxx.xx%
Stock at the end of the year		xx.xx%
- Finished Goods		xx.xx%
- Stock-in-Trade (Merchandise)		xx.xx%
- Work-In-Progress		xx.xx%
Less: Stock at the beginning of the year		xx.xx%
- Finished Goods		xx.xx%
- Stock-in-Trade		xx.xx%
- Work-In-Progress		xx.xx%
Employee benefit expenses		xx.xx%
Salaries, wages and bonus		xx.xx%
Contract, Manpower and Contribution to provident and other funds		xx.xx%
Gratuity expenses		xxx.xx%
Staff welfare expenses		xx.xx%
Depreciation and amortisation expense		x.xx%
Depreciation of property, plant, and equipment		xx.xx%
Amortization of leasehold land		xx.xx%
Depreciation of ROU Asset		xx.xx%
Finance costs		xx.xx%
Interest expense on		xx.xx%
- Unwinding of discount on decommissioning provision		xx.xx%
- ROU Asset		xx.xx%
- Interest on External Commercial Borrowing Loan		xx.xx%
- MSMED		xx.xx%
- local borrowings
Exchange Differences arising from foreign currency borrowings, to the extent that they are regard as an adjustment to Interest Cost		xx.xx%
Other expenses		xx.xx%
Spares and Stores Consumed		xx.xx%
Repairs Machinery		xx.xx%
Repair-Others		xx.xx%
Royalty		xx.xx%
Power and Fuel		xx.xx%
Rent		xx.xx%
Rates and Taxes		xx.xx%
Printing and Stationery		xx.xx%
Communication		xx.xx%
Travelling and Conveyance		xx.xx%
Legal and Professional		xx.xx%
Auditor’s Remuneration (excluding taxes)		xx.xx%
- Audit fees		xx.xx%
- Tax audit fees		xx.xx%
- Reimbursement of expenses		xx.xx%
- Other Services		xx.xx%
Training and Conference		xx.xx%
Insurance		xx.xx%
Foreign exchange loss		xx.xx%
Recruitment charges		xx.xx%
Advertisement		xx.xx%
Commission and Brokerage		xx.xx%
Vehicle running and maintenance		xx.xx%
Business promotion expenses		xx.xx%
Selling and Distribution Expenses		xx.xx%
Freight		xx.xx%
Allowances for Expected Credit Loss		xx.xx%
Custom Duty (EPCG)		xx.xx%
Loss on sale of PPE		xx.xx%
Loss on Derivative		xx.xx%
Miscellaneous Expenses		xx.xx%
Total Expenses		xx.xx%
Profit/(Loss) before exceptional items and tax		xx.xx%
Exceptional Items		xx.xx%
Profit/(Loss) for the year (A)		xx.xx%
Other comprehensive income for the year, net of tax (B)
Total comprehensive income for the year (A+B)		xx.xx%

(*) Excise Duty shall form part of expenses as per the provisions of Ind AS and shall be netted off from the sale price (turnover) as per the provisions of Accounting Standards (AS).

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What’s inside

An excerpt from the template.

The objective of this document is to assess whether the overall review of financial statements at the end of the audit are consistent with our findings during the audit.

Obtained the financial statements for the year and previous year. Refer other analytical procedures as per para A13 of SA 315.

Plotted the numbers of both the years for each caption of financial statements. (Statement of Profit & Loss and Balance Sheet).

Computed the variances between both the years in terms of numbers and percentage.

↑ Excerpt only — the full template is what you download as Word

About this template

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Common questions

FAQs.

What's the difference between analytical procedures at planning vs. later in the audit?

SA 520 planning-stage analytics are risk-assessment procedures — comparing current-year to prior-year figures and ratios to flag unusual fluctuations needing investigation; substantive analytics performed later provide audit evidence directly on account balances.

What counts as a "significant fluctuation" worth investigating?

One that's inconsistent with other relevant information or expectations, evaluated against a threshold set relative to materiality — SA 520 doesn't require investigating every numerical movement, only the ones that don't fit the expected pattern.

Does an unexplained fluctuation automatically mean there's an error?

No — it means it needs inquiry and corroboration. The explanation might be a legitimate business reason, but SA 520 requires that explanation to actually be obtained and evaluated, not assumed.

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