AUDIT ANALYTICS AUDIT

AUDIT ANALYTICS AND CONTINUOUS AUDIT:LOOKING TOWARD THE FUTURE
business processes have become too complex to be efficiently addressed
through pure human assurance. Layers of data, software, and the
interconnection with upstream and downstream systems (and processes)
make observation and evaluation very complex.
In general an entirely new family of audit analytics is emerging 15 that can
affect all parts of the audit engagement and can allow the use of an
expanded data framework that includes external big data to support
audit assertions in an unorthodox manner. Table 1-9 illustrates the
number of potential changes and improvements to assurance
methodologies. It should be considered together with table 1-10 in which
the emphasis is more on procedures.
Table 1-9: Audit Phases and Analytic Methods (modified schema of
Cushing and Loebbecke, 1986)
Audit phase
Applicable analytic
methods
Client
examination • News media
monitoring
• Social media
monitoring
Audit
Planning
• Ex-ante risk assessment
alaCRMA
• Ratio analysis
Observations
A large set of sources allows for
environmental scanning of events
with directors, their reputation,
the behavior of competitors, and
events in the industry
Peer industry group evaluation for
performance
Audit risk
assessment
Internal
Control
evaluation
Compliance
testing
• CRMA The "material" change in the risk
situation requires changes in
continuous monitoring,
management action, and in
continuous audit parameters
• Process mining
• Analytical modeling
• Process mining
• CCM
Much reliance on the "best of
class" nature of designed ERP
systems but hampered by the fact
that most large organizations’ data
is a mix of ERP based and many
other sources
Concern about user configurable
controls requires monitoring these
settings through a CCM
methodology
15 http://raw.rutgers.edu/audit_analytics_certificate
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