ADA - Audit Data Analytics The Audit Analytics Process Questions and Answers

Question 1

An auditor is using data analytics to examine a full year of sales transactions for a large retail company.
The primary objective is to identify any sales transactions that were recorded on a public holiday when all stores were officially closed.
Which step of the audit analytics process does this specific activity represent?

Accepted Answer

Performing the audit data analytic

Answer

Planning the audit data analytic

Answer

Accessing and preparing the data

Answer

Evaluating the results and concluding

Question 2

During the planning phase of an audit data analytic (ADA), which of the following is the MOST crucial consideration for the audit team?

Accepted Answer

Defining the specific audit objective and the population of data to be analyzed.

Answer

Selecting the specific data visualization software to be used for the final report.

Answer

Normalizing and cleansing the dataset to remove duplicate entries.

Answer

Performing a regression analysis to identify preliminary trends.

Question 3

An internal auditor is analyzing expense reports for a company. They run an analysis that summarizes total expenses by employee and then compares each employee's total to the department average, flagging individuals with significantly higher totals. This type of analysis is best described as:

Accepted Answer

Descriptive Analytics

Answer

Prescriptive Analytics

Answer

Diagnostic Analytics

Answer

Predictive Analytics

Question 4

Which of the following scenarios BEST illustrates the 'Access and Prepare the Data' step in the audit analytics process?

Accepted Answer

An auditor extracts a raw data file of employee overtime hours and transforms the date fields into a consistent YYYY-MM-DD format for usability in the analytics tool.

Answer

An auditor decides to analyze 100% of the company's journal entries instead of a sample.

Answer

An auditor meets with the IT department to understand the database schema for the ERP system.

Answer

An auditor presents a dashboard of findings to the audit committee.

Question 5

After performing an audit data analytic to detect duplicate invoice payments, the auditor identifies 50 potential duplicates. What is the most appropriate next step in the audit analytics process?

Accepted Answer

Plan and perform additional procedures to validate the findings and understand the root cause.

Answer

Immediately report the 50 items to management as definitive fraud.

Answer

Select a different analytics tool and re-perform the entire test.

Answer

Conclude that the internal controls over payments are ineffective.

Question 6

When considering the relevance and reliability of data to be used in an audit data analytic, an auditor should prioritize which of the following activities?

Accepted Answer

Gaining an understanding of the source, system controls, and how the data was generated.

Answer

Ensuring the data is in the preferred file format for the analytics software.

Answer

Asking the client to provide a summary report instead of raw data to save time.

Answer

Checking if the data volume is large enough to produce statistically significant results.