ANALYTICAL PROCEDURES: A Data Envelopment Analysis Approach

34 Pages Posted: 30 Jul 2008 Last revised: 27 Aug 2014

Ehsan H. Feroz

University of Washington, Tacoma - Milgard School of Business; University of Illinois at Urbana-Champaign; Government of the United States of America - US GAO Advisory Council; University of Minnesota - Duluth - Department of Accounting

Sungsoo Kim

Rutgers Business School - Camden

Raymond L. Raab

University of Minnesota, Duluth - Labovitz School of Business and Economics (LSBE)

Date Written: August 1, 2003

Abstract

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

JEL Classification: C44, C61, C67, D57, G1, G2, G3, M4

Suggested Citation

Feroz, Ehsan H. and Kim, Sungsoo and Raab, Raymond L., ANALYTICAL PROCEDURES: A Data Envelopment Analysis Approach (August 1, 2003). Journal of Emerging Technologies in Accounting, Vol. 2, pp.17-31, 2005 . Available at SSRN: https://ssrn.com/abstract=1179302

Ehsan H. Feroz (Contact Author)

University of Washington, Tacoma - Milgard School of Business ( email )

1900 Commerce Street, Campus Box 358420
Tacoma, WA 98402-3100
United States
(253) 692 4728 (Phone)
253 692 4523 (Fax)

HOME PAGE: http://www.tacoma.washington.edu/business

University of Illinois at Urbana-Champaign ( email )

515 East Gregory Drive# 2307
Champaign, IL 61820
United States

Government of the United States of America - US GAO Advisory Council ( email )

441 G Street NW
Washington, DC 20548-0001
United States

University of Minnesota - Duluth - Department of Accounting ( email )

10 University Drive
137 SBE
Duluth, MN 55812
United States
218-726-6988 (Phone)
218-726-8510 (Fax)

Sungsoo Kim

Rutgers Business School - Camden ( email )

227 Penn Street
Camden, NJ 08102
United States
856-225-6584 (Phone)

Raymond L. Raab

University of Minnesota, Duluth - Labovitz School of Business and Economics (LSBE) ( email )

412 Library Drive
Duluth, MN 55812-3029
United States

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