An Example of the Use of Data Analytics at the End

question 121

True/False

An example of the use of data analytics at the end of the audit is using software to scan unusual journal entries that may require additional consideration by the auditor of their potential impact on the year-end financial statements.

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Definitions:

Profit Margin

A measure of a company's profitability, typically defined as net income divided by revenue, and expressed as a percentage.

Investment Turnover

A component of the rate of return on investment, computed as the ratio of sales to invested assets.

Return on Investment

A measure used to evaluate the efficiency of an investment, calculated by dividing the profit gained on an investment by the cost of the investment.

Indirect Expense

Costs incurred that are not directly tied to the production of goods or services, such as rent, utilities, and administrative salaries.