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For Big Data analytics on the audit of a bank's loan portfolio, the MOST informative analytical procedure is:
AVouch the largest 10 loans to original documentation
BRecompute interest on a sample basis
CRun an algorithm flagging loans whose interest-accrual deviates from contract terms across the entire portfolio
DSample 25 loans and confirm with borrowers
Answer & Solution
Correct answer: D. Sample 25 loans and confirm with borrowers
1. Population-level deviation testing surfaces anomalies that sampling would miss.
2. Sampling and vouching are confirmatory and miss systemic patterns.
3. CAATs over the full portfolio match the data-rich automated environment.
_Source: ICAI BoS CA Final Paper 3, Ch 4 "Special Aspects of Auditing in an Automated Environment"_
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