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There have been a lot of talk in these posts about internal and external users, but what about the auditors? Can anyone tell us which one of these types of analysis would be beneficial to them? Could they use both? What about when auditing for materiality and fluctuations over time?

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There have been a lot of talk in these posts about internal and external users, but what about the auditors? Can anyone tell us which one of these types of analysis would be beneficial to them? Could they use both? What about when auditing for materiality and fluctuations over time?

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Certainly both could and should be used by the auditor to evaluate the company's financial data. The horizontal analysis looks at line items and compares those items to the same accounts in the previous period, or to the previous year. The auditor can then determine if any accounts need to be further analyzed, and can determine certain acceptable or unacceptable areas. For example, the auditor may ...

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