When auditors examine the output of their data analytics procedures, they may note exceptions or outliers. Exceptions

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Question:

When auditors examine the output of their data analytics procedures, they may note exceptions or outliers. Exceptions are items in a population that are inconsistent with the auditor's expectations. Outliers are items identified during audit analytics procedures that exhibit characteristics that are unusual based on the distribution of the population. what potential problems for auditors may these observations indicate?

Do you think that the use of automation in audit will assist in reducing the expectation gap? Why or why not?

Explain your answer taking into consideration the following components of the expectation gap (Refer to the figure below):

- The 'knowledge gap' - is the difference between what the public thinks auditors do and what auditors actually do.

- The 'performance gap' - focuses on areas where auditors do not do what auditing standards or regulations require. This could be because of insufficient focus on audit quality; the complexity of certain audit standards; or differences in interpretation of auditing standard or regulatory requirements between practitioners and regulators.

- The evolution gap exists in the areas of the audit where there is a need for evolution, taking into consideration the general public's demand, technological advances and how the overall audit process could be enhanced to add more value. Addressing the knowledge and performance gaps is an important step in determining what needs to evolve in the audit.