Question

Which of the following IS NOT a benefit of the use of audit data analytics (ADA)?

1) Aids in the exercise of professional skepticism
2) Increases audit fees
3) Deepened auditor's understanding of the entity
4) Improved audit efficiency

Answer 1

The use of audit data analytics (ADA) aids in professionalism, deepens the auditor's understanding of an entity, and improves audit efficiency, but it does not inherently increase audit fees.

Step-by-step explanation:

The item from the list that IS NOT a benefit of the use of audit data analytics (ADA) is 2) Increases audit fees. Audit data analytics are primarily designed to enhance the quality and efficiency of an audit. The use of ADA aids in the exercise of professional skepticism by allowing auditors to analyze and review data in ways that weren't possible before, thus helping to identify anomalies or patterns that may indicate potential issues. Furthermore, ADA can help deepen the auditor's understanding of the entity by providing detailed insights into its operations and financial performance, leading to a more effective audit. Improved audit efficiency is another advantage, as ADA can process large volumes of data more quickly and accurately than traditional audit methods. Increasing audit fees is generally not a direct benefit of ADA; instead, higher fees could result from a larger scope of work or more complex data analysis required, but not from the adoption of ADA itself.