Chapter 8 Data Structures and CAATs for Data Extraction

Chapter 8 data structures and CAATs for data extraction 1.

Explain hashing structure works and why is it it quicker than using an index. Give an example. example. If it is so much faster, why isn’t it used exclusively? Hash tables are used to quickly store and retrieve data (or records). Records are stored in buckets using hash keys Hash keys are calculated by applying a hashing algorithm to a chosen value contained within the record. This chosen value must be a common value to all the recor ds. Each bucket can have multiple records which are be organized in a particular order. It is quicker than index since each key doesn’t have to be unique from the other. For example, Let's say you have 200 objects, but only 15 of them have hash codes that begin with the letter 'B.' The hash table would only need to look up and search through the 1 5 objects in the 'B' bucket, rather than t han all 200 objects. It may impair data efficiency that is why it is not used e xclusively.

2.

Explain how an embedded audit module works and why auditors may choose not to use it. A predecessor technology to continuous audit is the Embedded Audit Module (EAM). These challenges are analyzed by the development of ten e xamples of EAM alerts in a fraud environment. The alerts employ stored database procedures and triggers to monitor the internal control environment. The alerts are complementary to the strengthening of a firm's internal control system by monitoring and reporting the irregularities in the control environment. Auditors may choose not to use it because of certain limitations of EAM. These limitations raise a number of issues that must be considered before continuous audit can be widely adopted.

3.

Explain the term navigational data models. Contrast the hierarchical model and the network model. Navigational data models have limits in their design for dynamic navigation and more work should be done in the research of real time navigation data models. In the paper, it discusses the content of real time navigation data and gets that the content mainly contains data of traffic events and data of traffic flow. Both of them are different feature classes of real-time navigation data based on ISO-GDF model. Hierarchical model arranges data in relational chronological manner while network model illustrates data in terms of connections and links.

4.

Explain the three types of anomalies associated with database tables that have not been normalized. Update anomaly occurs when stored data may be impaired by data updates.

Deletion anomaly occurs when important files or stored data may be lost due to deletion of  some data Insertion anomaly occurs when data may be impaired due to storing additional files and data. 5.

Contrast embedded audit modules with generated audit software. EAM focuses on audit and assurance of stored data in standardized manner. GAS is flexible to the user of data in the audit procedure of the client.

6.

Describe a specific accounting application that could make use of an VSAM file In recording a production under process costing in which each department processes a single activity in batches.

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Explain why auditors should be familiar with the principle of data normalization Auditors should be familiar with the principle of data normalization since it is associated with data anomalies that may impair data.

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How is a user view different from database table? User view provides room for comment and qualitative evaluation. Database table is more o n quantitative data evaluation.

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Explain what the term third normal form means Third normal form (3NF) is a normal form used in database normalization. 3NF was originally defined by E.F. Codd in 1971.[1] Codd's definition states that a t able is in 3NF if and only if both of the following conditions hold: The relation R (table) is in second normal form (2NF) Every non-prime attribute of R is non-transitively dependent (i.e. directly dependent) on every super key of R.

10. Why is a separate link table required when an M:M association exits between related tables? To prevent data anomalies, overwriting of data, and having a single data with multiple meaning. 11. In a relational database environment, certain accounting records may not exist. How is this possible? Lost records may not be relative to the data or lost records may have be en overwritten when updates of data are in process

12. Explain how to link tables in a 1:1 association. Why may this be different in a 1:0:1 association? Two tables are related in a one-to-one (1—1) relationship if, for every row in the first table, there is at most one row in the second table. True one-to-one relationships seldom occur in the real world. This type of relationship is often created to ge t around some limitation of the database management software rather than to model a r eal-world situation. 1:1 association assures a single pair relationship, in 1:0:1 association, one record may not have any corresponding link at all. 13. Discuss the accounting implications of the update, insertion, and deletion anomalies associated with improperly normalized tables. Update anomaly occurs when stored data may be impaired by data updates. Deletion anomaly occurs when important files or stored data may be lost due to deletion of  some data Insertion anomaly occurs when data may be impaired due to storing additional files and data. 14. Give three examples that illustrate how cardinality reflects an organization’s underlying business rules There is M:M association between inventory and supplier entities. One or more vendors supply each inventory items. There is 1:0:M association between supplier and purchase order entities. Each supplier may receive zero or one purchase order for the period. The association between receiving and inventory entities is 0, M:M. each item of inventory received may have been many times or never . 15. Explain the following three types of pointers: physical address pointer, relative address pointer, and logical key pointer Physical address pointer contains the value of absolute address in the next data record which is to be accessed Relative address pointer contains the value of relative address o f the next data record which is to be required Logical key pointer contains the key field of record which helps to link the required next record from the current record. 16. Explain why GAS technology is popular with most auditors GAS technology is popular among auditors because auditors evaluate the reliability of computer generated data supporting financial ... IT Auditor must know the characteristics of users of the

information system and ..... met in the most effective and efficient way - sufficient and adequate disposal. 17. Explain the risk associated with using GAS to access complex file structures Most common risk associated with GAS is the risk that data integ rity will be compromised by the procedure used to create the flat file. 18. Explain the purpose of the input file definition feature of ACL It has the ability to read data stored in most formats. Auditors will know the source file physically resides and its field layout. 19. Assume that an auditor is reviewing a file containing 25 f ields of data, only 5 of which are relevant to the auditor’s objective. Explain how ACL can help in this situation ACL software has a filter capability in which irrelevant data are not included in sampling for audit procedures. Resulting in less work effort and better time management. 20. Explain the purpose of ACL’s filter capability ACL’s expression builder used in filters allows to use logical operators to define and test conditions of any complexity and to process only those records that match specific conditions. 21. Distinguish between record sampling and monetary unit sampling When records are fairly evenly distributed across strata, record sampling is preferre d, having each record equal chance of being chosen. If file is heavily skewed with large values, MUS is advisable to produce a sample that includes all larger dollar amounts.