Reference no: EM132401447
Assignment -
Chapter 5 - The Modern Audit and Continuous Auditing
Objectives -
1. Understand modern auditing techniques.
2. Evaluate an audit plan.
3. Understand the nature, extent, and timing of audit tests.
4. Select appropriate audit tasks and approaches.
5. Evaluate audit alarms as part of continuous auditing.
6. Understand working paper platforms.
What does the modern audit look like?
What does auditing data look like?
Q. What are the advantages of the use of homogeneous systems? Would a merger target be more attractive if it used a similar financial reporting system as the potential parent company?
How do we automate the audit plan?
How do we evaluate audit exceptions?
Q. Continuous audit uses alarms to identify exceptions that might indicate an audit issue and require additional investigation. If there are too many alarms and exceptions based on the parameters of the continuous audit system, will continuous auditing actually help or hurt the overall audit effectiveness?
What goes into audit working papers?
Q. PwC uses three systems to automate its audit process. Aura is used to direct the audit by identifying which evidence to collect and analyze, Halo performs Data Analytics on the collected evidence, and Connect provides the workflow process that allows managers and partners to review and sign off on the work. How does that line up with the steps of the IMPACT model we've discussed throughout the text?
Chapter 6 - Audit Data Analytics
Objectives -
1. Understand different types of analysis for auditing and when to use them.
2. Understand basic descriptive audit analyses.
3. Understand more complex statistical analyses.
4. Understand advanced predictive and prescriptive analytics.
When should you use audit data analytics?
Track Outcomes - Evaluate detection and resolution of exceptions. Periodically evaluate the procedures for effectiveness.
Q. Compare and contrast descriptive and diagnostic analytics. How might these be used in an audit?
What do descriptive analytics look like?
Q. What type of descriptive analytics would you use to find negative numbers that were entered in error?
How do you perform diagnostic analyses and Benford's Law?
Q. Let's say a company has nine divisions, and each division has a different check number based on its division-so one starts with "1," another with "2," etc. Would Benford's law work in this situation?
How do you perform predictive and prescriptive analytics?
Q. Why would a bankruptcy prediction be considered classification? And why would it be useful to auditors?
Textbook - Data Analytics for Accounting, 1st Edition By Vernon Richardson and Katie Terrell and Ryan Teeter.