Data Analytics For Accounting
19th Edition
ISBN: 9781260375190
Author: RICHARDSON, Vernon J., Teeter, Ryan, Terrell, Katie
Publisher: Mcgraw-hill Education,
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Chapter 5, Problem 5P
To determine
Identify the approach a company uses when the continuous audit system has too many alarms which are false positives. In addition, explain the reasons for approach that would change when there are too many missed abnormal events of false negatives.
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Why do fraud examiners treat data differently than auditors? Why is this so?
Why do you think companies were not able to detect the fraud in their previous audit?
1. How can internal auditors use histograms during internal audits?
2. How can management use control charts as part of their ongoing monitoring activities?
3. How can the 5S model be used during an operational audit?
4. How is transporting a waste? Provide an example to support your answer.
5. Describe the impact of defects on organizational success from an internal and external (e.g., competitive) perspective.
6. Describe three reasons why waiting is damaging to organizations.
7. Provide three recommendations to minimize the presence of underutilized employees.
8. Explain the elements of the CCCER/5C model.
9. Explain three methodologies that can help operational auditors find the root cause of operational deficiencies.
10. List three actions that can help to make findings and recommendations more persuasive
Chapter 5 Solutions
Data Analytics For Accounting
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Similar questions
- Which sentence below is true about audit risk: A. Audit risk is the risk that a company may hire an incompetent auditor. B. Audit risk can be completely eliminated through appropriate sampling of transactions. C. Audit is what creates the demand for an audit. D. Audit risk is the risk that a "clean" opinion will be issued when, in reality, the financial statements are materially misstated..arrow_forwardWhich of the following would a fraudster perceive as a pressure?A. lack of management oversightB. everyone does itC. living beyond one’s meansD. lack of an internal audit functionarrow_forwardWhy is the audit team more concerned with controlling the exposure to the risk of overreliancethan with the risk of underreliance?a. Only the risk of overreliance results in an incorrect audit decision.b. The risk of underreliance is not related to the audit team’s study and evaluation of internalcontrol.c. The risk of overreliance can ultimately result in the audit team’s failing to reduce auditrisk to acceptable levels.d. The risk of underreliance can be controlled by performing tests of controls during theinterim period.arrow_forward
- How do fraud examiners approach data differently than auditors? Why is this significant?arrow_forwardWhy do fraud examiners handle information in a different manner than auditors? Why is thisimportant?arrow_forwardtch the type of risk with the related definition.A. Detection riskB. Control riskC. Inherent riskD. Audit risk___ 1. The probability that an auditor will give an inappropriate opinion on financial statements.___ 2. The probability that audit procedures will fail to produce evidence of material misstatements.___ 3. The probability that the client's internal control policies and procedures will fail to detect material misstatements if they have entered the accounting system.___ 4. The probability that material misstatements have occurred in transactions entering the accounting system.arrow_forward
- Give one reason why performing advisory services could enhance audit quality. Give one reason why performing advisory services could weaken audit quality. Do you think performing advisory services for audit clients should be restricted? Why or why not?arrow_forwardHow can an auditor reduce a client’s inherent risk?arrow_forwardA company's records for auditing have been destroyed. Would it be okay if the auditor asked the client to reproduce the data.arrow_forward
- Assuming a lack of internal control in a client's system, the risk of material misstatement is known as? O Inherent risk Client risk O Detection risk O Audit riskarrow_forwardIn which of the following circumstances would an auditor expect to find that an entity had implemented automated controls to reduce risks of misstatement?a. When errors are difficult to predict.b. When misstatements are difficult to define.c. When large, unusual, or nonrecurring transactions require judgment.d. When transactions are high volume and recurring.arrow_forwardWhen it comes to control systems and materiality, why could fraud examiners' views vary from those of other auditors?arrow_forward
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