AUDIT ANALYTICS AUDIT

AUDIT ANALYTICS AND CONTINUOUS AUDIT:LOOKING TOWARD THE FUTURE
Testing the Operating Effectiveness of
Internal Control
Reperformance involves the independent execution of procedures or
controls that were originally performed as part of the entity’s internal
control.
Internal control procedures such as ensuring that prices on an invoice
come from an approved price list, performing account reconciliations, or
ensuring via batch totals that information is correctly transferred from
one system to another can often be reperformed on a 100 percent basis
rather than for a sample and can be performed continuously.
Observation consists of looking at a process or procedure being performed
by others (for example, the auditor’s observation of inventory counting
by the entity’s personnel or the performance of control activities). As
high-performing computer systems take over processes and procedures
that previously required human involvement, the nature of audit
observation changes. Further, when a computer performs a control
activity, it can be monitored around the clock and any lapses immediately
reported.
Process mining of event logs is a technique that can identify internal control
deficiencies such as payments made without approval, violations of
segregation of duty controls, and violations of entity-specific internal
procedures (Jans, et al. 2014).
Inquiry
Inquiry consists of seeking information of knowledgeable persons, both
financial and nonfinancial, within the entity or outside the entity.
Statistical analysis, relationship analysis, and the summarized results lists
of anomalies provided by population analysis can all provide significant
material for client discussions (and often provide insights that clients find
valuable).
ALOOK AHEAD:COGNITIVE COMPUTING IN
THE AGE OF BIG DATA
Utilizing Big Data
Big data is the product of a technological environment in which almost
anything can be recorded, measured, and captured digitally, and thereby
turned into data. Big data is important in machine learning, where
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