Question

If there are too many notable items identified by audit data analysis (ADA), what should the auditor do?

1) The auditor must decide to apply a grouping of filtering processes when, for example, a large number of notable items identified have many diverse characteristics.
2) The auditor must evaluate whether the ADA has been appropriately planned and performed and, if not, refine and reperform the ADA.
3) The auditor first evaluates whether the ADA has been appropriately planned and performed and, if not, refine and reperform the ADA; then, the auditor might also decide to apply a grouping of filtering processes when, for example, a large number of notable items identified have many diverse characteristics.
4) The auditor must identify characteristics common to groups of notable items, focusing on their nature, cause and what can go wrong at the relevant assertion level.

Answer 1

When there are too many notable items identified by audit data analysis (ADA), the auditor must evaluate the ADA's planning and performance and may apply grouping or filtering processes. The auditor must also identify common characteristics of notable items.

Step-by-step explanation:

When there are too many notable items identified by audit data analysis (ADA), the auditor has several options. Firstly, the auditor must evaluate whether the ADA has been appropriately planned and performed. If not, they should refine and reperform the ADA. Additionally, the auditor may choose to apply a grouping of filtering processes when there are a large number of notable items with diverse characteristics. Finally, the auditor must identify characteristics common to groups of notable items, focusing on their nature, cause, and what can go wrong at the relevant assertion level.