Audit Mod. G
Select the proper order in performing Audit Data Analytics: 1. Evaluate the results and conclude on whether the purpose and specific objectives of performing the ADA have been achieved 2. Consider the relevance and reliability of the data used 3. Plan the ADA 4. Perform the ADA 5. Access and prepare the data for purposes of the ADA
3,5,2,4,1
Which of the following best describes what audit data analytics are?
All of these choices are correct
Documentation of an Audit Data Analytic (ADA), should be sufficient enough such that:
An experienced auditor, with no prior connection to the engagement could understand the conclusions reached and significant judgments made
Which of the following are benefits that distributed ledger technology (DLT) can provide to auditors in the future?Automated Audit ProceduresImproved Audit TrailsPermanent Record-Keeping
I, II, III
Which of the following are key issues that the auditor faces when assessing a clients data? (data completeness, data format, data integrity, data collection, data accuracy)
I, II, III, V
In order to be considered sufficient, documentation should be prepared so that an experienced auditor, with no prior connection with the engagement can understandThe nature, timing, and extent of procedures performedThe difficulty of the auditResults of procedures and evidence obtainedConclusions reached and significant judgments made
I, III, IV
An auditor imports a client's purchasing cycle transactions for the purposes of testing authorization controls.
Testing can be more efficiently conducted across 100% of transactions
Which of the following is true regarding an unusual item identified during an Audit Data Analytic (ADA)?
The auditor must consider whether risk of material misstatement exists in items not identified as unusual
Which of the following statements is true regarding the use of Audit Data Analytics (ADA)?
The auditor need not document every professional judgment made
Which of the following is a common use of ADA in performing tests of controls?
The auditor performs journal entry exception testing for employee entry amount limits
When performing an Audit Data Analytic (ADA), an auditor must exercise professional skepticism in all of the following situations except:
When documenting rationale for their professional judgement used during the ADA
Which of the following are true with regard to the relevance and reliability of data used in an Audit Data Analytic (ADA)?The auditor must use all data with a logical connection to the ultimate purpose of the audit procedureThe auditor must evaluate internal controls over the preparation of data being used
II only
Which of the following is not important when considering the reliability of client data?
If the auditor's information system has been subject to reliability testing
Which of the following is true of audit data analytics?
It is used gain insights and improve audit quality
After evaluating the results of an Audit Data Analytic (ADA), which notable items should the auditor perform additional procedures on?
Option C (Missing Items: yes, Duplicate Items: yes, items with elevated risk: yes)
Audit techniques that take full advantage of big data offer the potential to improve:
Option D (Audit Efficiency: yes, Audit effectiveness: yes)
Audit Data Analytics (ADA) allow the auditor to test/analyze 100% of the data rather than a sample. What is the benefit of being able to test the entire population of data?
Option D (Increased Assurance: yes; Increased Reliability: Yes)
An auditor is assessing the reliability of data to be used in the audit. The auditor discovers that the data is controlled internally by the accounting department. After learning this information, how should the auditor proceed?
Perform tests of controls over the preparation of the data
Which documenting an Audit Data Analytic (ADA), all the following must be included in the audit documentation except:
the underlying data used to generate graphics or visualization as part of the ADA
Which of the following is correct regarding including client data in audit documentation for an issuer?
there is no specific requirement to include client data in auditing documentation
What is the primary objective of analytical procedures performed during the planning stages of an audit?
to identify unusual or unexpected relationships
An auditor is considering choosing an ADA tool for performing a risk assessment procedure. Which of the following best describes the requirements in the audit standards?
the auditing standards do not specifically address the tools auditors may use in performing the audit
Which of the following is a common use of ADA in performing tests of controls?
the auditor performs exceptions testing for proper approval of purchase transactions
When documenting an Audit Data Analytic (ADA), an experienced auditor with no prior connection to the engagement should be able to understand all these elements of the ADA except:
the software used in performing the ADA
Which of the following are options the auditor may take if the objectives of the Audit Data Analytic (ADA) test were not achieved?Abandon ADA and perform different proceduresConsider a Different ADA
Both I and II
When accessing and preparing data to be analyzed using an Audit Data Analytic (ADA), it is important to:
Cleanse the data
Which of the following is not a step performed during the planning phase when conducting an Audit Data Analytic (ADA)?
Cleansing the data
Which of the following is not a reason for data cleansing?
Data may be too large in volume
Data from which of the following sources is most likely to be unreliable?
Data obtained directly from the client with weak internal controls
Which of the following would not be considered when planning an Audit Data Analytic (ADA)?
Determine the sample of the population to be analyzed
The professional standards for audit documentation are quite high. The documentation must contain enough information to allow an experienced auditor to understand the nature, timing, extent, and results of the audit. Which of the following is required for audit documentation for ADA to meet this standard?
Documentation of all misstatements identified other than those considered clearly trivial
Which of the following best describes exception testing in internal control testing?
a way of testing all items in a population to identify violation of a control activity
Which of the following is not a potential explanation of an outlier identified as a result of an Audit Data Analytic (ADA)?
all of the above are potential explanations of outliers
Certain characteristics of data may affect the relevance and reliability of the data used in the ADA. The level of aggregation is one of these characteristics. Which of the following does not illustrate differing levels of aggregation?
all of the above illustrate differing levels of aggregation
When performing an ADA, which of the following best describes an appropriate sequence used by an auditor for risk assessment procedures?
an auditor develops an audit plan after evaluating the results of the risk assessment ADA
Which of the following statements is correct regarding the inclusion of client data in audit documentation for an issuer?
auditors may include client data in audit documentation
When identifying and assessing inherent risk through the use of audit data analytics, what type of analytic would an auditor most likely perform first?
comparison of sales revenue to prior period and expectations
All of the following procedures are common uses of ADA in risk assessment procedures except:
comparing cash payments made to vendor invoices and discounts in the purchases cycle
The first step of planning an ADA is:
determine the overall purpose and specific objectives of the ADA
Which aspect of data is not important for data used in Audit Data Analytics (ADA)?
none of these choices are correct
Through the evaluation of the results of an Audit Data Analytic (ADA), the auditor concludes that the original objectives of the ADA were not reached. What should the auditor do next?
plan and perform alternative procedures