Analytical Procedures: A Data Envelopment Analysis Approach
Ehsan H. Feroz
University of Washington, Tacoma-Milgard School of Business; Vernon Zimmerman Center, University of Illinois; US Government Accountability Office
Rutgers Business School - Camden
Raymond L. Raab
University of Minnesota, Duluth - Labovitz School of Business and Economics (LSBE)
August 1, 2003
Journal of Emerging Technologies in Accounting, Vol. 2, pp.17-31, 2005
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.
Number of Pages in PDF File: 34
Keywords: Risk, Analytical Procedures, Benchmarks, Red Flags, Audit, DEA
JEL Classification: C44, C61, C67, D57, G1, G2, G3, M4Accepted Paper Series
Date posted: July 30, 2008 ; Last revised: June 15, 2009
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