Jacob is the auditor in charge of the audit of Vanderlay Industries (VI). He requested a general ledger detailed listing in electronic format from VI's IT manager in the hope that he could use this data to undertake journal entry testing and other analyses using ADA techniques.
He asked for the data to cover the month of March. Although he did not mention it to VI, he had hoped he would receive a flat file with the following fields (columns):

However, when he opened the file attachment in the reply email from the VI, he was surprised to find a spreadsheet which contained 20 worksheets, each containing one sheet of a 20 sheet electronic report which had been exported from the client's accounting system. The image below is an example of one of the pages from the report. While the spreadsheet contained all the information he was looking for, it was not in his required format.

REQUIRED:

(a)  Briefly explain the issues that Jacob should consider before choosing to rely on the file provided by VI?

 

(b)  Outline the detailed steps that Jacob would need to take using spreadsheet software in order to make the file he has received from VI usable for its intended purpose (i.e., describe the necessary step-by-step data cleansing activities using spreadsheet software, such as Excel). Be sure to refer to the preceding extract of the spreadsheet in your answer?

 

(c)  Briefly explain a non-spreadsheet tool that Jacob could use in future audits to automate the data cleansing procedures you described in (b). Discuss any key differences between using this tool versus using a spreadsheet?

 

(d)  Explain what Jacob could do in future audits to ensure that his firm receives the data from the client in a ready-to-use form, such that data cleansing might be minimised or unnecessary?

 

(e)  Identify and briefly explain a tool that could be used for journal entry testing that uses both machine-learning and other rules to identify high-risk transactions. How might it utilise the metadata in the data that has been supplied by VI?

Account no. Account name Posting date Source User Time Description Jnl ref Amount