Module G Homework and assessment

An auditor is considering choosing an ADA tool for performing a risk assessment procedure. Which of the following best describes the requirements in the auditing standards? A.) The AICPA Guide to Audit Data Analytics lists the technology tools which are allowed for audits of nonissuers. B.) The auditing standards prohibit the use of artificial intelligence in risk assessment. C.) The ASB and PCAOB standards provide a uniformly agreed upon and updated listing of allowable tools for audits of

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? A.) The auditor performs an aging of accounts receivable. B.) The auditor conducts a trend analysis on inventory costs. C.) The auditor runs a predictive model of interest expense. D.) The auditor performs journal entry exception testing for employee entry amount limits.

The auditor performs journal entry exception testing for employee entry amount limits.

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 A.) 5, 3, 2, 4, 1 B.) 2, 3, 5, 4, 1 C.) 2, 5, 3, 4, 1 D.) 3, 5, 2, 4, 1

3, 5, 2, 4, 1

The first step of planning an ADA is: A.) select techniques and tools used for performing the ADA. B.) document the objective of the ADA. C.) determine the overall purpose and specific objectives of the ADA. D.) select the ADA that is best suited for the purpose.

determine the overall purpose and specific objectives of the ADA.

When performing an ADA, which of the following best describes an appropriate sequence used by an auditor for risk assessment purposes? A.) An auditor develops an audit plan after evaluating the results of the risk assessment ADA. B.) An auditor evaluates the results of a data analytic chosen based off of the audit plan. C.) An auditor cleanses the client's data after modeling the ADA required by the audit plan. D.) The auditor models an ADA based on the evaluation of the audit plan.

An auditor develops an audit plan after evaluating the results of the risk assessment ADA.

An auditor imports a client's purchasing cycle transactions for the purposes of testing authorization controls. Which of the following is true regarding the implementation of this audit data analytic? A.) The use of statistical sampling in the performance of the ADA increases the auditor's confidence. B.) The use of ADA for purchasing transactions often significantly increases audit risk relative to traditional auditing procedures. C.) A disadvantage of implementation is the increased costs

Testing can be more efficiently conducted across 100% of transactions.

Which of the following is correct regarding including client data in audit documentation for an issuer? A.) Auditors are required to retain their client's data in documentation for seven years. B.) Auditors should always include client data in their documentation to enable an experienced auditor with no prior connection to the engagement to replicate testing. C.) Client data should never be included in documentation. D.) There is no specific requirement to include client data in auditing docu

There is no specific requirement to include client data in auditing documentation.

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? A.) Number of annual transactions compared to the number of weekly transactions B.) A consolidated statement compared to a single segment of a statement C.) A total account balance compared to a single transaction within that balance D.) All of the above illustra

All of the above illustrate differing levels of aggregation

When identifying and assessing inherent risk through the use of audit data analytics, what type of analytic would an auditor most likely perform first? A.) Detail analysis of specific sales transactions. B.) Dimension analysis of sales transactions by region. C.) Trend analysis of sales by month. D.) Comparison of sales revenue to prior period and expectations.

Comparison of sales revenue to prior period and expectations.

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: A.) results of procedures performed and evidence obtained. B.) nature, timing, and extent of procedures performed. C.) the software used in performing the ADA. D.) conclusions reached and significant

the software used in performing the ADA.