Final answer:
Key issues in planning an ADA application include the selection of financial statement items to be audited, understanding the overall purpose of the ADA in the audit, and selecting the appropriate audit population for analysis.
Step-by-step explanation:
When planning an audit data analytics (ADA) application, three key issues considered are:
- Selection of financial statement items, accounts or disclosures, and related assertions to be audited. This involves identifying the specific areas of the financial statements that the ADA will focus on to assess risk and material misstatement.
- The overall purpose of the audit data analytics application and how it will contribute to the balance of the audit. This addresses what the ADA aims to achieve in the context of audit objectives and how it integrates with other audit procedures.
- Selection of the audit population being analyzed or tested using audit data analytics. This pertains to choosing the data set or population from which samples will be drawn and analyzed to make conclusions about the entire population.
The above considerations ensure the ADA is employed effectively to enhance the audit process, focusing on relevance and sufficiency of audit evidence.