Companies are increasingly using data analytics for managing their operations. Auditors can also obtain good results by using data analytics. What…
CA Intermediate · Auditing and Ethics · RTP · September 2024
Companies are increasingly using data analytics for managing their operations. Auditors can also obtain good results by using data analytics. What are the tools and techniques used by auditors in applying the principles of Data Analytics and in which areas data analytics can be used by auditors?
Suggested Answer and Working Notes:
The tools and techniques that auditors use in applying principles of data analytics are known as Computer Assisted Auditing Techniques (CAATs). Data analytics can be used in testing of electronic records and data residing in IT systems using spreadsheets and specialised audit tools viz., IDEA and ACL to perform the following: - Check completeness of data and population that is used in either test of controls or substantive audit tests.Selection of audit samples – random sampling, systematic sampling.Re-computation of balances – reconstruction of trial balance from transaction data.Reperformance of mathematical calculations – depreciation, bank interest calculation.Analysis of journal entries of fraud investigation.Evaluating impact of control deficiencies.
Topics: Risk Assessment and Internal Control
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