1. Identify the phrase that best defines audit data analytics (ADAs).

a Science and art of discovering and analyzing patterns, identifying anomalies, and extracting other useful information in data underlying or related to

the subject matter of an audit through analysis, modeling, and visualization for the purpose of planning or performing the audit.

b Application of advanced analytics software to analyze patterns, identify anomalies, and extract other useful information in data underlying or related to

the subject matter of an audit through analysis, modeling, and visualization for the purpose of planning or performing the audit.

c Utilizing analytical procedures to analyze patterns, identify anomalies, and extract other useful information in data underlying or related to the subject

matter of an audit through analysis, modeling, and visualization for the purpose of planning or performing the audit.

d Application of critical thinking skills to discover and analyze patterns, identify anomalies, and extract other useful information in data underlying or

related to the subject matter of an audit through analysis, modeling, and visualization for the purpose of planning or performing the audit.

2. Identify one of the principle trends that have fueled the increase use of ADAs in the financial statement audit.

a Need to reduce the cost of conducting audits.

b Accessibility of large amounts of information/data.

c Further advancement of cloud technology.

d Establishment of new auditing standards.

3. Identify an example of substantive analytical procedures using ADA techniques.

a Cash receipts to sales invoice matching procedure by comparing 100% of sales invoices to cash receipts for the entire year under audit and period

subsequent to balance sheet date to verify occurrence of sales.

b Comparison of 100% of cash disbursements activity to an approved master vendor list to determine whether payments were made to vendors that had

not been approved through the formal control procedures.

c Trend analysis of sales revenue showing quarterly sales over past four years and sales for each type of product to determine whether there are any

unusual changes in sales from prior years or other trends that might affect risk of material misstatement.

d Predictive model to develop the auditor's expectation of rental revenue for each apartment building held by a real estate company based on apartment

buildings number of units (by size), average monthly marketplace rental rate, and marketplace monthly vacancy rates.

4. Data scientists possess which of the following groups of skills?

a Accounting, business knowledge, math.

b Data analytics, artificial intelligence, robotic process automation.

c Information technology, statistics, business knowledge.

d Math, information technology, auditing.

5. With so much data available, businesses, not just auditors, have explored ways to use the information to support business decisions, understanding the potentially

disruptive impact of data analytics. Which of the following was not identified as a potential benefit for an entity?

a Increasing revenue by using external market data and internally produced sales data to identify potential market opportunities and present the

information in such a manner that clearly identifies the opportunities.

b Audit risk assessment by reviewing processes and identifying controls over inherent risk.

c Identifying obsolete inventory by using analytics software to develop dashboards that allow management to drill down into the data to identity

obsolete inventory highlighted in the dashboard.

d Streamlining internal processes by using data to analyze internal processes to identify overlaps and gaps to improve the efficiency of data flow.

6. Exercising professional judgment and professional skepticism when using audit data analytics is particularly important. Which of these statements is incorrect?

a Deciding which audit data analytics technique to use. The auditor needs to match the audit data analytics technique with the audit objective or

assertion.

b Inappropriate design of audit data analytics technique. Auditors should analyze the results produced by the audit data analytics technique to ensure

that the results seem reasonable based on the known facts.

c Incomplete or inappropriate data source. To reach conclusions about the population being tested, the auditor needs to ensure that the data source is

appropriate for the audit objective, reconciles to the general ledger (where appropriate) and is of sufficient quality to meet the audit evidence

standards.

d Biases. Because data analytics are computer based, judgment biases such as confirmation bias, availability bias, and anchoring bias, and biases toward internal versus external information sources, are not considered critical.

7. Identify which one of the six key steps in performing an ADA technique is represented by the following statement: "During this step, the initial ADA technique

selected will be confirmed, the reliability of the data to be used will be confirmed, the ADAs will be performed, and results evaluated.

a Conclusion.

b Extraction, transformation, and loading, or ETL

c Objective of ADAS.

d Data analytics.

8. ETL stands for extraction, transformation, and loading. When an auditor identifies the data needed to perform the ADA and requests the specific data from the

audit client, indicate which of the three elements of ETL the auditor performed.

a Extraction.

b Transformation.

c Loading.

d Both transformation and loading.

9. When an auditor develops an accounts receivable churn analysis to analyze changes in the composition of open account receivable balances by customer, which

of the following ADA techniques did the auditor perform?

a Trend analysis.

b Account analysis

c Process mining.

d Ratio analysis.

10. The software tools used to conduct ADAs are placed into categories according to the complexity of use or low. moderate. or high or whether they are biq data tools. Which of the following type of software is considered moderately complex?

a spreadsheet

b visualization

c Analytics.

d Database

11. After completing and documenting the ADA procedures, the auditor evaluates the audit evidence obtained and develops a conclusion based on the audit evidence.

Indicate what the conclusion relates to.

a ADA procedure utilized

b Relevance and reliability of audit evidence.

c Specific phase of audit where ADA utilized.

d completeness of audit evidence.

12. Identify the auditing standard that explicitly references the application of ADAs in conducting an audit.

a AU-C section 230, Audit Documentation

b AU-C section 300, Planning the Audit.

c AU-C section 330, Performing Audit Procedures in Response to Assessed Risks.

d No auditing standard explicitly references the application of ADAs in conducting an audit.