Chapter 7 Audit plan Evidence 28 Which of the following is

Chapter 7 Audit plan - Evidence 28. Which of the following is true concerning the application of Benford\'s Law in the audit process? Audit Plan Tests of Control (TOC) Tests of Balance (TOB I. For data mining As analytical procedure II. Not applicable As analytical procedure III. Not applicable Not applicable IV. For data mining Not applicable Not applicable As analytical procedure As analytical procedure As analytical procedure a. d. IV.

Solution

28. b. II

Benford\'s law cannot be used for audit planning, however it is very good for analytical purposes to analyze any dataset of numbers, to detect any anomaly, manipulations or fraud. It is a good tool to check whether the controls are working effectively or not. It can also be used to check the balances from analytical point of view and can be used for customer balances, journal entries, credit card transactions, etc.