Analytical Methods In Auditing And Their Role In Detecting Financial Fraud In Financial Statements And Their Importance From The User’s Point Of View (An Analytical Study)

Abstract

The study aims to apply analytical methods to financial reports (financial statements) for early detection of financial fraud in the financial statements of the two Baghdad Soft Drinks companies, shed light on recent trends in applying analytical methods, and determine the impact of analytical methods in the three audit stages on the quality of the external auditor’s performance. In addition to the responsibility of the external auditor to detect financial fraud in the Iraqi environment in accordance with International Auditing Standard 240 by using analytical methods. For the purpose of achieving the objectives of the study, a sample was selected from the Iraqi industrial sector, which is (the two Baghdad Soft Drinks companies. The time limits of the study were the period (2017-2021). The results showed, through analyzing the previous turnover rate of the Baghdad Soft Drinks Company, that there was an increase in turnover rates for the years 2018 and 2019. With rates of (11% and 17%). In the year 2020, we notice a decrease in the turnover rate by (9%), and in the year 2021, the rate reached (18%) compared to the base year of 2017. This means that every dinar invested in fixed assets corresponds to (1.802). ) dinars, (2,007) dinars, (2,359) dinars, (2,579) dinars, and (2,098) dinars from sales during the years (2017, 2018, 2019, 2020, 2021), respectively.

Therefore, there is an increase in net sales (293,821,963,243) dinars, (331,351,800,403) dinars, (367,746,074,612) dinars, and (415,005,789,102) dinars. And (531,822,049,007) dinars during the years (2017, 2018, 2019, 2020, 2021) respectively, and the corresponding decrease in the values of fixed assets (in book value) amounting to (163,007,390,122) dinars. (165,033,166,351) dinars, (155,881,571,429) dinars, (160,888,080,779) dinars, and (253,398,680,549) dinars during the years (2017, 2018, (2019, 2020, 2021) and it is clear that analytical methods have contributed to identifying the company’s failures and positives through analyzing all paragraphs of the items of the financial position statement, the income statement (its revenues and expenses) and the cash flow statement, as the results showed the company’s strength in its financial performance and the strength of its financing through... Analyzing consistency in finance, the study recommends using analytical methods with financial ratios and comparisons is one of the most important tools of analytical methods adopted by the external auditor in the process of auditing and expressing an opinion, as analytical methods help the external auditor in converting the huge amount of financial data and information contained in the financial statements into quantitative Less and more useful in the decision making process.