APPLICATION OF ECONOMIC ANALYSIS METHODS IN THE ACCOUNTING SYSTEM AND AUDIT

Abstract

This article examines the significance of economic analysis methods in the accounting system and audit, including vertical, horizontal, trend, factor and ratio analyses. The most frequently detected errors in audit of financial statements were simulated (overstatement of the share of inventories in assets, systematic error in the classification of expenses over three years, outpacing growth of costs compared to revenue, incorrect transition from PBU 5/01 to FSBU 5/2019, decrease in current liquidity ratio below the standard). On their basis, using economic analysis methods, scenarios for eliminating the identified misstatements were developed: from adjusting materiality levels to changing accounting policies for inventories and accounts receivable. The novelty of the approach lies in linking each of the five economic analysis methods to specific auditing standards (ISA 320, 450, 315, 520) and accounting standards (FSBU 5/2019). The results of the study are intended for auditors, financial managers and chief accountants of organizations. The recommendations proposed in the study can be applied both in the course of audit engagements and when the accounting service performs internal audit of financial statements, as well as used in the formation of internal audit methodologies and improving the quality of financial control.