ADA - Audit Data Analytics Assessing Data Reliability Questions and Answers

Question 1

An auditor is using Audit Data Analytics (ADA) to test the completeness of a client's sales transaction data. Which of the following procedures would be most effective for this purpose?

Accepted Answer

Comparing the sequence of sales invoice numbers in the sales journal to the sequence of shipping document numbers.

Answer

Matching the total number of sales transactions in the sales ledger to the general ledger control account.

Answer

Selecting a sample of sales invoices and vouching them to the corresponding shipping documents.

Answer

Analyzing the data for duplicate sales invoice numbers and investigating any matches found.

Question 2

When evaluating the reliability of data for use in an ADA, an auditor's assessment is primarily influenced by the:

Accepted Answer

Intended use of the data and the risk associated with its use.

Answer

Size and complexity of the dataset.

Answer

Auditor's proficiency with the selected ADA tool.

Answer

Nature and extent of the planned audit procedures.

Question 3

An internal auditor is preparing to use an ADA to analyze payroll data for a large multinational corporation. The data is extracted from multiple, disparate HR systems from different countries. Which of the following is the most critical first step in assessing the data's reliability?

Accepted Answer

Analyzing the metadata to understand the data definitions, formats, and sources across the different systems.

Answer

Performing a proof of completeness by reconciling the total record count to employee headcount reports.

Answer

Running a profiling script to identify outliers and anomalies in pay rates and hours worked.

Answer

Vouching a sample of high-risk payroll transactions to supporting documentation like employment contracts.

Question 4

Which of the following attributes is a primary component of data reliability, as defined in an audit context?

Accepted Answer

Completeness

Answer

Visualization

Answer

Velocity

Answer

Volume

Question 5

An auditor obtains a data file of all purchase orders (POs) directly from the client's production ERP system via read-only access. The client's IT general controls are known to be strong. From a data reliability perspective, this data is generally considered more reliable than a spreadsheet of POs provided by the purchasing manager because:

Accepted Answer

Direct extraction from the source system with strong controls reduces the risk of undetected alteration.

Answer

The purchasing manager may have a vested interest in the data's presentation.

Answer

The ERP system automatically formats the data for easy import into ADA tools.

Answer

Spreadsheets are inherently more prone to data corruption than ERP system files.

Question 6

During the 'Access and Prepare Data' step of the 5-step ADA process, an auditor performs data cleansing and normalization. What is the primary goal of these activities in relation to data reliability?

Accepted Answer

To improve the quality, consistency, and usability of the data for analysis.

Answer

To build a predictive model for identifying future anomalies.

Answer

To ensure the data is complete and all transactions have been recorded.

Answer

To verify the mathematical accuracy of calculations within the dataset.

An auditor is using Audit Data Analytics (ADA) to test the completeness of a client's sales transaction data.Which of the following procedures would be most effective for this purpose?

An auditor is using Audit Data Analytics (ADA) to test the completeness of a client's sales transaction data.
Which of the following procedures would be most effective for this purpose?