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

Which of the following best describes the main effect of using data analytics tools in an audit compared with traditional sample-based testing?

Data analytics lets the auditor examine entire populations of transactions and highlight exceptions, rather than relying only on samples. Professional judgement, responsibility for the opinion and the need to understand internal control all remain with the auditor.

  1. AIt allows the auditor to examine entire populations of transactions and identify exceptionsCorrect
  2. BIt removes the need for the auditor to exercise professional judgement
  3. CIt transfers responsibility for the audit opinion to the software vendor
  4. DIt makes understanding of the entity's internal control unnecessary

Explanation

Data analytics lets auditors test complete populations and flag unusual items, improving coverage. Judgement is still needed to evaluate exceptions, responsibility for the opinion stays with the auditor, and understanding of internal control remains required.

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