Planning an ADA application

Timothy Steele, a recent college graduate and new audit staff member, is having lunch with Michael Watts, an audit senior. Both are working on the audit engagement of a retailer that has operations in North America and Europe. Timothy says to Michael, “I have been doing some reading about audit data analytics, and there is something I don’t understand. While I understand the importance of internal controls to the reliability of the client’s data, I also keep reading that the auditor needs to clean the data before it can be analyzed. I don’t understand what people are talking about with when they talk about ʻcleanʼ data. Is there a difference between ʻcleanʼ and ʻdirtyʼ data? Can you explain this to me with a practical illustration? I just don’t get what the discussion of ʻcleanʼ data is about.”

Required

Answer Timothy’s questions. As Timothy asks, explain the concept of “clean” versus “dirty” data with a practical illustration.