ABSTRACT
This chapter examines how audit objectives are determined and how data analytics are selected in order to achieve those objectives. Analytics software offers auditors the opportunity to verify that the data utilized in the organization's financial and operational reports has been integrated effectively. Auditors can use analytics software to run tests on the data relied upon by management, using different rules, to check data quality. In 1992, the American Institute of Certified Public Accountants, the Institute of Internal Auditors, the American Accounting Association, the Institute of Management Accountants, and the Financial Executives Institute issued a jointly prepared study titled Internal Control–An Integrated Framework. Auditors have traditionally been tasked with gaining and confirming an understanding of the system of internal control as fundamental to evaluating the adequacy and effectiveness of management's internal controls. Inherent limitations include an auditor's poor judgment in assessing the probability of occurrence and lack of adequate or accurate information on the potential cost of occurrence.
