Chapter 6: Audit Analytics Flashcards
(27 cards)
why audit data analytics?
- time reduction
- helps improve the nature, extent and timing of audit procedures:
- nature= represents WHY auditor audit
- extent: indicates HOW MUCH auditors can audit
- timing: tells HOW OFTEN the procedure should be run
audit data analytics makes it clearer why
we do audit
increases extent to which we can audit
can audit more
What are the four types of audit analytics
Descriptive, Diagnostic, Predictive, Prescriptive
What is the goal of descriptive analytics
Summarize and describe what has happened
What is the goal of diagnostic analytics
Explain why something happened using patterns or comparisons
What is the goal of predictive analytics
Forecast what is likely to happen using models or patterns
What is the goal of prescriptive analytics
Recommend what action should be taken based on predictions
What is age analysis and which category does it belong to
Descriptive – groups data by time buckets (e.g., aged receivables)
What is sorting and which category does it belong to
Descriptive – arranges values from high to low or low to high
What are summary statistics and which category do they belong to
Descriptive – calculates mean, median, max, min, standard deviation
What is random sampling and which category does it belong to
Descriptive – selects representative transactions from population
What is a Z-score and which category does it belong to
Diagnostic – measures how far a value is from the mean in standard deviation
What is a boxplot and which category does it belong to
Diagnostic – visualizes spread and outliers in numerical data
What is Benford’s Law and which category does it belong to
Diagnostic – identifies unnatural digit patterns in transaction values
What is drill-down analysis and which category does it belong to
Diagnostic – allows tracing unusual data back to source or detail level
What is exact matching and which category does it belong to
Diagnostic – compares fields for identical matches (e.g., duplicate invoices)
What is fuzzy matching and which category does it belong to
Diagnostic – detects approximate matches based on similarity (e.g., vendor names)
What is sequence checking and which category does it belong to
Diagnostic – identifies gaps or duplicates in sequences like invoice number
What is regression and which category does it belong to
Predictive – estimates numerical outcomes using independent variables
What is classification and which category does it belong to
Predictive – assigns data points to risk categories or labels
What is the Altman Z-score and which category does it belong to
Predictive – bankruptcy risk model based on financial ratios
What is the Beneish M-score and which category does it belong to
Predictive – detects earnings manipulation using accounting ratios
What is sentiment analysis and which category does it belong to
Predictive – analyzes tone in reports or communications for risk signals
What is what-if analysis and which category does it belong to
Prescriptive – tests outcomes by changing input variables
What is goal-seek analysis and which category does it belong to
Prescriptive – identifies needed input to reach a target result
