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ACCA Applied Knowledge · Business and Technology · The impact of advances in technology

A bank's internal audit team uses software to test 100% of transactions for unusual patterns instead of sampling. Which statement best identifies a limitation the team must still manage?

Flagged items may be false positives, so they still need investigation and professional judgement. Analytics can test an entire population and highlight anomalies, but it cannot determine whether an unusual transaction is genuinely wrong or simply legitimate, so human review remains essential.

  1. AAnalysing a full population makes professional judgement unnecessary
  2. BFlagged items may be false positives, so they still require investigation and judgementCorrect
  3. CData analytics cannot be used on structured data
  4. DFull-population testing cannot detect unusual transactions

Explanation

Analytics tools highlight anomalies but cannot confirm fraud or error; flagged items need human investigation, and many may be legitimate. Judgement remains necessary, structured data suits analytics well, and detecting unusual items is a main strength of full-population testing.

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