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Examples of the use of data analytics to perform audit procedures.

- NRV testing- comparing the last time an inventory item was purchased with the last time it was sold and at what price.

- Analysis of revenue trends by product and region.

- Matching purchasing order to invoices and payments.

- Segregation of duties testing by identifying combinations of users involved in processing transactions from Metadata attached to transactions.

Benefits of data analytics

Increase assess and manipulation of data and the consistency of application of data analytics tools should increase audit quality and efficiency through.

1) increase business understanding through a more thorough analysis of client's data, use of visual output such as dashboard displays rather than text or numerical information. Allowing auditors to better understand the trends and pattern of the business and makes it easier to identify unusual trends.

2) Better focus on RISK. The increase in understanding aid the identification of risks associated with a client, enable testing to be better directed at those areas. Freeing up auditor time from analyzing routine data so that more time can be spent on area of risks.

3) Increase consistency across group audits where all auditors uses the same technology and process. enabling the group auditor to direct specific tools for use in component audits and to execute testing across the group.

4) Increase efficiency through the use of computer programmes to perform very fast processing large volume of data and provide analysis to auditors on which to base their conclusion, saving time within the audit and allowing better focus on judgemental and risk areas. Eg much larger samples can be tested, often 100% testing is possible using data analytics, improving the coverage of an audit procedures and reduce or eliminate sampling risk.

5) data can be more easily manipulated by the auditor as part of audit testing, Eg performing sensitivity analysis on management assumptions.

6) Increase fraud detection through the ability to interrogate all data and to test segregation of duties.

7) Information gathered through data analytics can be shared with the client, adding value to the audit and providing a real benefit and to management in that they are provided with useful information perhaps from a different perspective.

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