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CMA Intermediate · Corporate Accounting and Auditing · Application of Technology in Audit and Audit Trail

An auditor uses software to scan the complete population of 48,000 purchase invoices of a company and flags all invoices where the same vendor, amount and date appear more than once. Which feature of data analytics does this procedure best illustrate?

The procedure illustrates testing the entire population. Data analytics software can examine every invoice for duplicates instead of relying on a sample, which increases coverage and the likelihood of detecting anomalies, unlike judgmental sampling, inquiry or reperformance of a reconciliation.

  1. ATesting the entire population rather than a sampleCorrect
  2. BJudgmental sampling of high-value items
  3. CInquiry of management about duplicate payments
  4. DReperformance of the bank reconciliation

Explanation

The software examines all 48,000 invoices, not a selected subset. This is a key advantage of data analytics: full-population testing for duplicates. Judgmental sampling would test only chosen items, and no inquiry or reconciliation is involved.

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