An IS auditor is using data analytics for an accounts payable audit.
Which of the following potential risk scenarios will MOST likely be identified using this approach?
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A. B. C. D.D.
An IS auditor using data analytics for an accounts payable audit can identify several potential risk scenarios. Out of the given options, the risk scenario that is most likely to be identified through data analytics is duplicate payments made for a vendor (Option D).
Data analytics involves the use of software tools to analyze and identify patterns and anomalies in large datasets. In the context of accounts payable audits, data analytics can be used to analyze payment data, vendor data, and invoice data to identify potential risk scenarios.
Duplicate payments occur when a vendor is paid twice for the same invoice. This can happen due to various reasons such as manual errors, system errors, or fraudulent activities. Duplicate payments can result in financial loss to the organization and can also damage the organization's reputation.
By analyzing payment data using data analytics, an IS auditor can identify cases where the same vendor has been paid multiple times for the same invoice. Data analytics can help to identify patterns such as identical invoice numbers, identical payment amounts, and identical payment dates, which can indicate the occurrence of duplicate payments. The IS auditor can then investigate the root cause of the duplicate payments and take corrective actions to prevent such occurrences in the future.
While data analytics can also help to identify the other potential risk scenarios listed in the options, such as rogue or shadow vendors, payments made to the wrong vendor, and consecutive invoice numbers paid, these are comparatively less likely to be identified through data analytics alone. Identifying rogue or shadow vendors, for example, may require additional investigations and analysis beyond payment data, such as vendor master data and contract data. Similarly, identifying payments made to the wrong vendor or consecutive invoice numbers paid may require manual review and verification of payment details, which cannot be done through data analytics alone.
Therefore, the most likely risk scenario to be identified using data analytics for an accounts payable audit is duplicate payments made for a vendor (Option D).