DeepDyve eBooks - Audit Analytics

Chapter 1Fundamentals of Auditing Financial Reports

Pages: 1 –18

[Audits are independent examinations of the records of an organization to ascertain how far the financial statements present a true picture of the firm and that accounting systems are well-controlled, legal, and accurate. Auditing has become such a ubiquitous phenomenon in the world that...

LitStream

Chapter 2Foundations of Audit Analytics

Christopher Westland, J.

Pages: 19 –39

[Broad application of statistical and data analytic tools is essential for the cost-effective completion of audits. Fortunately R has become the go-to language for analytics, and offers many features that reduce the cost of data acquisition, preparation, exploration, and summarization. It...

LitStream

Chapter 3Analysis of Accounting Transactions

Christopher Westland, J.

Pages: 41 –61

[Accounting transactions are the “raw data” of accounting system, but the idiosyncratic vernacular of accounting, and spotty empirical study of distributions and characteristics of accounting transactions mean that statistical methods that are applied in other disciplines are likely to prove...

LitStream

Chapter 4Risk Assessment and Planning

Christopher Westland, J.

Pages: 63 –86

[Risk assessment, planning, and budgeting of audits are essential precursors to the successful audit. The determination of risk of a particular subset of accounting operations related to the rendering of the audit opinion—i.e., on whether the accounts have material error when GAAP has been...

LitStream

Chapter 5Analytical Review: Technical Analysis

Christopher Westland, J.

Pages: 87 –112

[Analytical procedures are evaluations of financial information made by a study of plausible relationships between both financial and non-financial data. They are used in all stages of the audit including planning, substantive testing, and final review stage. This chapter surveys a range of R...

LitStream

Chapter 6Analytical Review: Intelligence Scanning

Christopher Westland, J.

Pages: 113 –137

[Analytical procedures involve the study of plausible relationships between both financial and non-financial data. Before the mid-2000s, sources of such information were spotty, unreliable, and scarce, and that, indeed, was considered a prime reason for markets needing annual, audited financial...

LitStream

Chapter 7Design of Audit Programs

Christopher Westland, J.

Pages: 139 –160

[Audit programs, from a scientific perspective, natural experiments—they are empirical studies in which the activities of firms, individuals or groups are exposed to the experimental and control conditions that are determined by nature, or by other factors outside the control of the auditors....

LitStream

Chapter 8Interim Compliance Tests

Christopher Westland, J.

Pages: 161 –188

[Compliance tests determine whether the firm’s transaction processing is in compliance with generally accepted accounting principles (GAAP). They have grown increasingly important and are the basis for much of the reporting in the SAS No. 115 letter to management, and support management’s...

LitStream

Chapter 9Substantive Tests

Christopher Westland, J.

Pages: 189 –241

[Substantive testing directly supports the auditor’s opinion that economic events in the real world are or are not accurately summarized in the financial statements of a firm. This chapter delineates the statistical tools used to insure cost-effective substantive testing in the audit.]

LitStream

Chapter 10Sarbanes–Oxley Engagements

Christopher Westland, J.

Pages: 243 –278

[Academic research on reporting from Sarbanes–Oxley Act of 2002 (SOX) has to date focused on internal consistency, compliance, and accrual accounting assessments. Some research has been performed on the related external risks such as fraud and security breaches. This chapter surveys what we know...

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