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

Which statement about using machine-learning based anomaly detection tools in an audit is correct?

The auditor remains responsible for checking the reliability of the input data and for following up the items the tool flags. Machine-learning tools support the audit but do not replace judgment, business understanding or accountability, and they are not prohibited.

  1. AOutput flagged by the tool needs no further evaluation by the auditor
  2. BThe auditor remains responsible for assessing the reliability of data inputs and following up flagged itemsCorrect
  3. CThe tool removes the need to understand the entity's business
  4. DUse of such tools is prohibited under auditing standards

Explanation

Tools assist but do not shift responsibility; the auditor must ensure data completeness and accuracy and investigate exceptions. Understanding the business is still necessary, and standards do not prohibit such tools.

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