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The Auditor's Guide to Analytical Procedures Under ISA 520
Complete guide: ISA 520 requirements quick reference, decision flowchart for when to use analytical procedures vs. tests of details, industry-specific ratio checklists for 12 sectors, threshold-setting guide by risk level, sample completed working paper, common quality-review findings, and documentation checklist.
Analytical Review Under ISA 520 in Belgium
Belgium has adopted ISA 520 Analytical Procedures as part of its auditing standards framework, implemented through the Instituut van de Bedrijfsrevisoren / Institut des Réviseurs d'Entreprises (IBR-IRE). The Belgian statutory auditor — the bedrijfsrevisor (Dutch) or réviseur d'entreprises (French) — is required to perform analytical procedures in accordance with ISA 520 as adopted for use in Belgium. The adoption of ISAs in Belgium follows the EU framework for statutory audit, with the IBR-IRE responsible for standard-setting and the Autorité des Services et Marchés Financiers / Autoriteit voor Financiële Diensten en Markten (FSMA) providing oversight of audit firms that audit PIE entities. Belgium's bilingual regulatory framework (Dutch and French) requires auditors to navigate standards and guidance published in both languages. The Belgian statutory audit framework is governed by the Code des Sociétés et des Associations / Wetboek van Vennootschappen en Verenigingen (CSA/WVV), which establishes mandatory audit thresholds and defines the scope of the auditor's reporting obligations. The bedrijfsrevisor/réviseur d'entreprises has responsibilities that extend beyond the financial statement audit, including reporting on contributions in kind, mergers and demergers, and the financial plan for newly incorporated entities, each of which may involve analytical review techniques.
FSMA and IBR-IRE Quality Oversight
The FSMA exercises oversight of audit quality for PIE audits in Belgium, while the IBR-IRE's quality review programme covers non-PIE audit engagements. Both oversight bodies have identified analytical procedures as an area where Belgian audit quality can be strengthened. The FSMA's annual transparency reports on audit quality highlight findings from its inspection programme, and analytical procedures feature as a recurring area of concern. Common findings include the following themes. The auditor's expectation is not always developed with sufficient rigour or documented with sufficient clarity to demonstrate that the procedure would be capable of identifying material misstatements. The threshold for investigating differences between expected and recorded amounts is not consistently established before the procedure is performed. The investigation of differences that exceed the threshold does not always include adequate corroboration of management explanations through independent evidence. The IBR-IRE's quality review programme (contrôle de qualité / kwaliteitscontrole) applies to all bedrijfsrevisoren/réviseurs d'entreprises and examines a sample of audit files to assess compliance with auditing standards. The IBR-IRE's quality review findings are communicated to individual auditors and, in aggregated form, to the profession. The IBR-IRE also provides continuing professional education and practice guidance to help Belgian auditors improve the quality of their analytical procedures.
Belgian GAAP Framework Considerations
Belgian entities that report under Belgian GAAP apply the accounting requirements set out in the Arrêté Royal du 30 janvier 2001 (Royal Decree on annual accounts) and the advices of the Commission des Normes Comptables / Commissie voor Boekhoudkundige Normen (CNC/CBN). Belgian GAAP differs from IFRS in several respects that affect the design and interpretation of analytical procedures. The Belgian chart of accounts (plan comptable minimum normalisé / minimum genormaliseerd rekeningstelsel) prescribes a standardised account structure that facilitates comparative analysis but produces financial statements with a different presentation than IFRS. Key Belgian GAAP characteristics that affect analytical review include the treatment of formation expenses (which may be capitalised and amortised under Belgian GAAP), the prohibition on revaluing financial assets to fair value for most entities, the detailed rules for provision recognition under Belgian GAAP that are more prescriptive than IAS 37, and the impact of the notional interest deduction (notionele intrestaftrek / déduction pour capital à risque) on the relationship between equity, tax, and profitability. Auditors performing analytical procedures on Belgian GAAP financial statements must develop expectations that reflect these framework-specific measurement and presentation rules, and must avoid applying IFRS-based assumptions to Belgian GAAP data.
Practical Considerations for Belgian Audits
Belgian auditors have access to several independent data sources that support the development of precise analytical expectations. The Banque Nationale de Belgique / Nationale Bank van België (BNB/NBB) operates the Centrale des Bilans / Balanscentrale, which collects and publishes annual accounts filed by Belgian entities. This database provides aggregated financial statistics by sector, size, and region, enabling auditors to benchmark entity performance against industry norms with considerable granularity. The BNB/NBB also publishes macroeconomic forecasts, business confidence surveys, and credit conditions data that serve as forward-looking inputs for analytical procedures. The Bureau fédéral du Plan / Federaal Planbureau provides medium-term economic projections for the Belgian economy. Statbel (the Belgian statistical office) publishes consumer price indices, industrial production data, and employment statistics. For audits of Belgian entities with cross-border operations in the Benelux region, analytical procedures should consider the economic interdependence of Belgium, the Netherlands, and Luxembourg, including shared trade patterns and coordinated regulatory developments. The IBR-IRE has published practice notes addressing the application of analytical procedures in the Belgian audit context, including guidance on the use of the Centrale des Bilans data for benchmarking purposes and the integration of data analytics into the analytical review process.
Common Inspection Findings — FSMA (Financial Services and Markets Authority) / IBR-IRE (Institute of Registered Auditors)
The following are typical findings from FSMA (Financial Services and Markets Authority) / IBR-IRE (Institute of Registered Auditors) inspections relating to analytical procedures:
Auditor's expectation not developed with sufficient rigour — reliance on general entity knowledge rather than quantified expectations based on identified data relationships
Investigation threshold for analytical differences not established before performing the procedure, reducing the objectivity of the assessment
Insufficient corroboration of management explanations for significant differences — auditor accepted explanations without obtaining independent supporting evidence
Documentation does not clearly demonstrate the data sources, assumptions, methodology, and conclusions underlying the analytical procedure