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Guide to Audit Data Analytics

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$111.99

Guide to Audit Data Analytics

AICPA

ISBN: 978-1-945-49865-7 August 2018 160 Pages

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Description

Designed to facilitate the use of audit data analytics (ADAs) in the financial statement audit, this title was developed by leading experts across the profession and academia.  The guide defines audit data analytics as “the science and art of discovering and analyzing patterns, identifying anomalies, and extracting other useful information in data underlying or related to the subject matter of an audit through analysis, modeling, and visualization for planning or performing the audit.” Simply put, ADAs can be used to perform a variety of procedures to gather audit evidence. Each chapter focuses on an audit area and includes step-by-step guidance illustrating how ADAs can be used throughout the financial statement audit. Suggested considerations for assessing the reliability of data are also included in a separate appendix.

Chapter 1 Introduction 01-.56

Objectives of This Guide 01-.02

Structure, Form, and Content of This Guide 03-.11

Considerations Regarding Examples in This Guide and Other Matters 12-.13

Relationship Between ADAs, CAATs, and Analytical Procedures 14-.16

Exercising Professional Judgment and Maintaining Professional Skepticism 17

Considerations in Determining Which ADA to Use to Meet the Objective of the Audit Procedure 18-.19

Using Graphics and Tables (Visualization) 20-.28

Graphics Often Linked With Particular ADAs 24

Matters to Consider Regarding Graphic Design 25-.28

Accessing and Preparing Data for Purposes of an ADA 29-.37

Accessing Data in a Format the Auditor Can Use 31-.33

Maintaining Data Security, Confidentiality, and Integrity 34-.35

Preparing the Data for Use 36-.37

Relevance and Reliability of Data 38-.45

Data Characteristics That May Affect Relevance and Reliability of Data 39

Relevance of Data 40-.41

Reliability of Data 42-.44

Possible Sequence of Procedures Regarding Data Relevance and Reliability 45

Addressing Circumstances in Which an ADA Identifies a Large Number of Items for Further Consideration 46-.47

Documenting the Procedures 48-.56

GAAS Requirements Regarding Documentation 48-.52

Screenshots of Graphics 53

Documenting Process to Address a Large Number of Items Warranting Further Consideration 54-.56

Chapter 2 Using ADAs in Performing Risk Assessment Procedures and in Procedures to Assist When Forming an Overall Conclusion 01-.29

Matters Covered in This Chapter 01-.03

Specific Generally Accepted Auditing Standards Relevant to Use of ADAs in Performing Risk Assessment Procedures 04-.07

Definition of Risk Assessment Procedures 04-.07

Applying Five Basic Steps for an ADA 08-.09

Plan the ADA 10-.12

Determine the Specific Objectives of the ADA (Within the Context of Its Overall Purpose) 10-.12

Consider the Relevance and Reliability of the Data Used 13

Perform the ADA 14-.26

Identifying and Addressing Notable Items 14-.25

Addressing Risks of Material Misstatement for Remaining Population Items 26

Using ADAs in Performing Procedures to Assist When Forming an Overall Conclusion 27-.29

Appendix A Examples of ADAs Used in Performing Risk Assessment Procedures

Chapter 3 Using ADAs in Performing Substantive Analytical Procedures 01-.63

Matters Covered in This Chapter 01-.02

Definition of Analytical Procedures 03

Nature and Objectives of Substantive Analytical Procedures 04-.05

Steps an Auditor Might Follow in Planning, Performing, and Evaluating a Substantive Analytical Procedure 06-.11

Auditor’s Expectations 08

Precision 09-.10

Level of Assurance 11

Plausibility and Predictability of Relevant Relationships 12-.15

Level of Disaggregation of Data 16-.18

Amount of Acceptable Difference of Recorded Amounts From Expected Values 19-.22

Investigation of a Significant Difference 23-.29

Effectiveness of Method Used to Develop the Auditor’s Expectation 30-.62

Trend Analysis 32-.38

Ratio Analysis 39-.45

Non-Statistical Predictive Modeling 46-.54

Regression Analysis 55-.62

Documentation 63

Appendix B Examples of ADAs Used in Performing Substantive Analytical Procedures

Chapter 4 Using ADAs in Performing Tests of Details 01-.19

Matters Covered in This Chapter 01-.03

Certain GAAS Relevant to the Use of ADAs in Performing Tests of Details 04-.07

Nature and Extent of Substantive Procedures 04-.06

Evaluation of Misstatements 07

Applying Five Basic Steps for an ADA 08-.10

Perform the ADA 11-.19

Identification of Possible Misstatements and Actual Misstatements 11-.19

Appendix C Examples of ADAs Used in Performing Tests of Details

Appendix D Matters to Consider Regarding the Reliability of Data