Presentation on IDEA auditing software CA

GHAZIABAD BRANCH OF CIRC OF
ICAI
TOPIC-IDEA AUDITING SOFTWARE
SUBMITTED TO :- MS. KOMAL
AGGARWAL(ITT INCHARGE)
SUBMITTED BY:- VIPUL SHARMA
REGISTERATION NO. –
CRO0684803
BATCH-ID:-
ICAITSSITT_GHAZIABAD_12

CONTENTS OF
THE PROJECT:-
 Intro to the Caseware IDEA
 Agenda
 About IDEA
 Data analysis
 Challenges
 Data analysis process
 Importing & exporting the data in IDEA
 Getting & understanding data
 Performing analysis
 Review result
 Payment
 Journal entry
 Invoices
 Excel vs IDEA ageing
 Excel vs IDEA Benford’s law
 Excel vs IDEA data protection
 Why use IDEA
 Benefits of using IDEA

About IDEA Software
 IDEA (Interactive Data Extraction and Analysis) is a popular
data analysis software designed specifically for auditors,
accountants, and financial professionals to perform efficient
and thorough data analysis during the auditing process.
 Key Features and Capabilities of IDEA Auditing Software:
-Data Import and Connectivity
-Data Preparation
-Data Analysis
-Sampling
- Fraud Detection
-Visualizations and Reporting
-Export and Integration
-Automation and Scripting

Other Features:-
-Continuous Monitoring
-Data Visualization
-Compliance Testing
-Customization

Data Analysis Of IDEA
Software
Data analysis using IDEA auditing software involves the use of its
features and capabilities to examine and interpret data for various
purposes, such as auditing, fraud detection, compliance testing, and more.
Here's an overview of how IDEA can be used for data analysis:
 1. Data Import and Preparation:
• Import data from diverse sources, such as databases, spreadsheets, and ERP
systems.
 2. Data Profiling:
• Understand the structure and distribution of the data through initial
profiling.
 3. Data Analysis Techniques:
• Apply mathematical and statistical functions to calculate aggregates,
averages, sums, and more.
 4. Fraud Detection:
• Use IDEA to identify duplicate transactions or suspicious patterns that may
indicate fraudulent activities.
• Perform Benford's Law analysis to detect anomalies in numerical data.

5. Sampling:
Apply sampling techniques to select a representative subset of
data for testing and analysis.
Perform audit testing on the sampled data to make inferences
about the entire dataset.
6. Visualization:
Create visualizations like charts, graphs, and dashboards to
present findings effectively.
Generate visual summaries of data distributions, trends, and
anomalies.
7. Automation and Scripting:
Utilize IDEA's scripting capabilities to automate repetitive
tasks and create custom analysis procedures.
Develop scripts to perform complex calculations, data
transformations, and validation checks.
8. Compliance Testing:
Define compliance rules and use IDEA to automatically check
data against these rules.
Identify discrepancies or violations that require further
investigation.

IMPORTING AND EXPORTING THE DATA IN
IDEA:-
Importing and exporting data are
fundamental tasks in IDEA
auditing software. They allow
you to bring data into IDEA for
analysis and share your analysis
results with others.
Importing Data: File Import:
Open IDEA software.
Go to the "Data" menu
or a similar option.
Choose "Import" or
"Open" to select the
file you want to
import.
Select the file format
(e.g., Excel, CSV, text)
and configure import
settings.
Map the fields from
the source file to the
appropriate columns in
IDEA.
Database Connection:
In IDEA, navigate to
the "Data" menu or a
similar option.
Choose "Connect to
Database" or a related
option.
Select the database
type (e.g., SQL Server,
Oracle) and provide
connection details.
Write SQL queries or
use the query builder
to extract data from
the database.
Direct Import from ERP
Systems:
IDEA provides specific
connectors for popular
ERP systems (e.g.,
SAP, Oracle Financials)
that allow direct
extraction of data.

 Exporting Data:
1. Export to File Formats:
 Once you've completed your analysis in
IDEA, go to the "File" or "Export" menu.
 Choose the desired export format (e.g.,
Excel, PDF, CSV, HTML).
 Configure export settings, such as file
name, location, and formatting options.
2. Export to Database:
 IDEA allows you to export your analysis
results back to a database.
 Connect to the target database and
choose the table where you want to
store the data.
3. Scripting for Automation:
 Use IDEA's scripting capabilities to
automate the export process.
 Write scripts that perform specific
analyses and then export the results to
predefined formats.

GETTING AND
UNDERSTANDING
DATA:-
 Getting and understanding data
in IDEA software involves the
process of importing, exploring,
and comprehending the data
you'll be working with for your
analysis.
1. Importing Data
2. Exploring Data
3. Understanding Data
4. Documentation
5. Continuous Monitoring
6. Training and Resources.:

Payment IDEA
Software :-
 Regarding payment for IDEA software,
typically software licenses are provided on a
subscription basis. This means users pay a
recurring fee to access and use the software
for a specified period, such as monthly or
annually. The cost of the subscription can
vary depending on factors like the features
you need, the number of users, and the level
of support you require.

SUMMARIZATION:-
Procedure for summarization
Location: Analysis > Summarization
1.In the Summarization Dialog Box, select the
following: Fields to summarize & Numeric fields to
total.
2.Click Fields. The Fields dialog box appears. Note
that no fi elds are selected. This stops unnecessary
information from being included in the summarized
database.
3.Click OK to return to the Summarization dialog
box.
4.In the Statistics to include area, accept the
default selections of sum.

5.Click OK.

Step by Step Procedure for performing Systematic Sampling
Location: Sampling >Systematic.
Step 1: Number of Records
In the Number of records to select box.
 Accept the random number seed provided by IDEA. IDEA uses the random number seed to start the algorithm for calculating the
random numbers. If a sample needs to be extended, then entering the same seed but with a larger sample size produces the same
original selection plus the required additional records.
 Accept the defaults in the Starting record number to select and the Ending record number to (a) Select boxes. (b) IDEA sets the
defaults as the first and last records
 In the File name box, enter Systematic Sales
 In the File name box, enter Systematic Sales.
Step 2: Selection Interval
• In Selection Interval tab page, enter 10 for selection interval. This means it picks every 10th records.
• Click Ok.
•Step 3: Result of Systematic Sampling
• As displayed in the result, every 10th record is picked from the active database.
SAMPLING:-

• Step by Step Procedure for performing Random Sampling
• Location: Sampling >Random
• Alternatively, click the Random Record Sampling button on the
Operations toolbar
• In the Number of records to select box
• Accept the random number seed provided by IDEA. IDEA uses
the random number seed to start the algorithm for calculating the
random numbers. If a sample needs to be extended, then entering
the same seed but with a larger sample size produces the same
original selection plus the required additional records.
• Accept the defaults in the Starting record number to select and the
Ending record number to Select boxes. IDEA sets the defaults as
the first and last records.
• Leave the Allow duplicate records check box unselected.
• In the File name box, enter Random Sales.
• On clicking Ok total records are extracted from active database.
RANDOM SAMPLING
• Step by Step Procedure for performing Random
Sampling
• Location: Sampling >Random
• Alternatively, click the Random Record Sampling
button on the Operations toolbar
• In the Number of records to select box
• Accept the random number seed provided by IDEA.
IDEA uses the random number seed to start the
algorithm for calculating the random numbers. If a
sample needs to be extended, then entering the same seed
but with a larger sample size produces the same original
selection plus the required additional records.
• Accept the defaults in the Starting record number to
select and the Ending record number to Select boxes.
IDEA sets the defaults as the first and last records.
• Leave the Allow duplicate records check box unselected.
• In the File name box, enter Random Sales.
• On clicking Ok total records are extracted from active
database

AGEING:-
Step by Step Procedure for performing Aging:
Location: Analysis >Aging.
 Enter the Aging date i.e yyyy/mm/dd format.
 Set the Aging field to use to DATE.
 Set the Amount field to total to SALES.
 Aging interval in Days. The other options are Months and year.
 The Aging task optionally produces: A detailed aging database. A
key summary database. A result output.
 Select only Create result option.
 In the Name box enter Aging Sales.
 On clicking Ok, the below output is displayed.

EXCEL VS IDEA
AGEING:-
 Both Microsoft Excel and IDEA software can be used for data
analysis, including tasks like aging analysis. Let's compare how
these two tools approach the task of aging analysis:
 Aging Analysis: Aging analysis is a common accounting and
finance task that involves categorizing and analyzing accounts
receivable or accounts payable based on how long the
balances have been outstanding. This helps businesses assess
the health of their receivables or payables and make
informed decisions.
 Excel: Microsoft Excel is a widely used spreadsheet software
that offers versatile data manipulation capabilities. You can
perform aging analysis in Excel by using functions and
formulas to calculate the age of transactions, categorize
them into different buckets (e.g., current, 30 days, 60 days,
etc.), and generate summary reports or visualizations. Excel
provides flexibility, but the process can be time-consuming,
especially when dealing with large datasets.
 IDEA Software: IDEA is specifically designed for data analysis
and audit tasks. While it might not be as widely known as
Excel, it offers powerful features for data manipulation and
analysis. IDEA provides specialized functions and tools to
perform aging analysis more efficiently. It allows you to
import data, apply filters, calculate aging based on specific
criteria, and generate reports with visualizations. IDEA's
scripting and automation capabilities can further streamline
repetitive tasks.

DATA EXTRACTION:-
Step by Step Procedure for Data Extraction
Location: Data >Extractions >Direct Extraction.
(a) In the File Name column, replace the default file
name with Sales Greater than “ ”.
(b) Click the Equation Editor Button, and then enter
the equation SALES >= “ ” .
(c) Click the Validate and Exit button to return to
the Extract to File(s) dialog box.
(d) On clicking Ok creates a new child database with
name Sales Greater than “ ” which contain
records where Sales is greater than “ ”.

IDEA VS EXCEL DATA EXTRACTION:-
EXCEL
 IDEA is specialized software designed for data analysis, auditing,
and fraud detection. It offers features that make data extraction and
analysis more efficient for these purposes.
• Data Import: IDEA can import data from a variety of sources,
including databases, spreadsheets, and text files. It's built to handle
large datasets efficiently.
• Data Cleansing: IDEA provides tools for data validation,
cleansing, and transformation, which are important steps in
preparing data for analysis.
• Advanced Filters: IDEA offers advanced filtering options to select
and manipulate data based on specific criteria. These filters can help
you extract the exact data you need.
• Automation: IDEA's scripting and automation capabilities can
streamline repetitive data extraction tasks. You can create scripts to
perform complex extractions and transformations.
• Specialized Functions: IDEA provides functions tailored for data
analysis tasks. These functions can be useful for tasks like data
stratification, summarization, and joining.
• Visualization: IDEA can generate visualizations and reports to
help you understand and communicate your data analysis results.
IDEA
 Microsoft Excel is a widely used spreadsheet software that offers general
data manipulation and analysis capabilities. While it might not be as
specialized as IDEA, it's still commonly used for data extraction in various
scenarios.
• Data Import: Excel can import data from multiple sources, including
databases and text files. However, it might not handle large datasets as
efficiently as IDEA.
• Basic Filters: Excel provides filtering options that allow you to sort and
filter data based on certain conditions.
• Formulas: Excel's powerful formula capabilities can be used to extract and
manipulate data. Functions like VLOOKUP, INDEX-MATCH, and others
are commonly used for data extraction tasks.
• Automation: While Excel has some automation features like macros, VBA
(Visual Basic for Applications), and Power Query, they might require more
technical expertise to set up compared to IDEA's automation.
• Visualization: Excel offers various chart and graph options for visualizing
data, which can be useful for basic analysis.
IDEA and Microsoft Excel are both tools that can be used for data extraction, but they have
different strengths and use cases. Let's compare how these two tools handle data extraction:

BENFORD’S LAW:-
Step by Step Procedure for
using Benford’s Law function
Location: Analysis >Benford’s
Law
Select the fi eld to analyze. In
the Field to analyze drop-down
list, select the Numeric fi eld
for which you want to analyze
with Benford’s Law.
Select the number type. In the
Include Values area, select the
check box for the required
number type (Positive or
Negative).
Optionally, specify the upper
and lower boundaries. The
upper and lower boundaries
defi ne the acceptable range of
values where the actual result
can appear. Select the Show
boundaries check box to
include the boundaries in the
Results output and resultant
database.
Select the required analysis
types. In the Analysis Type
area, select the required
analysis types, and then accept
or change the associated
database file names.
Optionally, create a Results
output.
On Clicking Ok, we get results
for Benford’s First Digit,
Second Digit, First Three Digit
and First Two Digit.
Benford First Digit result is
displayed. To view Second,
Third and Fourth Digit result,
click on the IDEA files explorer.

EXCEL VS IDEA BENFORD’S LAW:-
EXCEL
 Excel can be used to perform Benford's Law analysis,
but it might require a bit of manual setup and
calculation. You would need to:
1. Import Data: Import the data you want to analyze
into Excel.
2. Extract Leading Digits: Create formulas to extract
the leading digit from each number in your dataset.
3. Calculate Expected Frequencies: Calculate the
expected frequency of each leading digit based on
Benford's Law.
4. Compare and Visualize: Compare the expected
frequencies with the observed frequencies from your
dataset. You can create charts and visualizations to
illustrate any deviations from Benford's Law.
 While Excel can certainly handle this analysis, it
might require more effort and manual calculations,
especially if you have a large dataset.
IDEA
 IDEA software is designed for data analysis, including
specialized tasks like Benford's Law analysis. In IDEA, the
process might be more streamlined:
1. Import Data: Import your data into IDEA.
2. Benford's Law Function: IDEA may have built-in
functions or tools for Benford's Law analysis that can help
automate the process of calculating expected and observed
frequencies.
3. Visualization: IDEA's visualization capabilities can help
you easily present the results and any deviations from
Benford's Law.
 Using IDEA for Benford's Law analysis could be more
efficient due to its specialized capabilities for data analysis
and automation.
Let's compare how Microsoft Excel and IDEA software can be used to analyze data using
Benford's Law:

EQUATION
EDITOR:-
Select the type of function you require from the
following category list to view the details for the
associated functions:
 All - Complete list of all functions.
 Character - Text manipulation or conversion
Numeric - Calculations and statistics
 Date and Time - Date and time calculations and
conversions
 Matching - Matching of multiple and similar
items
 Conditional - IF statements to select different
items
 Financial - Financial calculations
 Custom - User-defined functions

TYPE EXPLANATIONS EXAMPLES
String Represents text or a character expression. A character
expression can contain characters or a Character data field.
“Smith”
“123456”
“Joe” + “Bloggs”
Number Represents a numeric expression. A numeric expression can
contain numeric constants or Numeric data fields.
123.45 ACCNT BAL
QTY*COST
Time Represents a time expression. It is displayed in the grid as
HH:MM:SS. A time expression can contain a time constant
expressed as a string, a numeric constant, a Time fi eld or a
Numeric fi eld. Numeric values are interpreted as the number
of seconds.
“23:59:59” TRANS_
TIME
Date Represents a date expression. A date expression is a character
string that is eight characters long and contains a valid date
in YYYYMMDD format
“19960131” TRANS_
DAT

REPORTING:-
Step by Step Procedure for reporting
Create a report using the view settings by selecting File
>Print >Create Report. Alternatively, click the Create Report
button on the Operations toolbar. The Report Assistant dialog
box appears.
Report Assistant
Accept all defaults and select the Allow headings to span
multiple lines check box. Click Next.
Step 1: Heading Step Modify the report headings as follows,
and then click Next:
 Date – Invoice Date
 INVOICENO – Invoice Number
 NAME – Username
 SALES – Sales
 USERID – User Id

 Step 2: Define Breaks Step
(a) During this step, define if and where control
breaks (required for totals in reports) are
required.
(b) Sequence the database records.
(c) Click Next.
 Note: IDEA displays the records in the report in
the order of the index. IDEA displays the index
description in the Indices area of the Properties
window once you have completed the report.
 Step 3: Report Breaks Step
 Create a break and total the Sales field for each “
”. Select the options and then click Next.
 Step 4: Grand Totals Step
 Create grand totals for the Sales fi eld only, set
the font style to bold, and then click Next.

 Step 5: Header/Footer Step Enter/select the
following information, and then click Finish.
 Print cover page: Select this check box.
• Title: Sales Transactions.
• Comments: Ordered by User Id and date.
• Prepared by: Enter your name or initials.
• Header: Enter the name of your organization.
• Date/Time: Accept the defaults unless you have
particular preferences.
 Note: The options you have selected effect how
the report is printed. The name entered into
the Prepared by fi eld appears on reports
accessed via the Print Preview of a Results
output.
 On clicking finish, you can preview the report
generated

FIELD MANIPULATION:-
Select Data>Field Manipulation. Field Manipulation Dialog Box is opened.
• Add a field
• Click Append
• Enter the field definition
• Field Name: A unique field name up to 40 characters in length that does not contain
spaces or special characters.
• Type: Click the Type text box to display the type options, and then select the required
type.
• Length: The total length of the field in characters. IDEA automatically

• Decimal: If applicable, enter the number of decimal
places. If the decimal is implied, enter 0. The
maximum number of decimals places allowed is six.
• Parameter: Click the Parameter field to invoke the
Equation Editor.
• Tag Name: If you have Smart Analyzer installed, click
the link to add a tag.
• Description (optional): A brief description of the field.
The maximum length of the description is 256
characters.
• Click Ok
• Delete a field
• Click in the row corresponding to the field to be
deleted.
• Click Delete.
• Click Yes to confirm the deletion.
• Note: As a security feature, by default, native fields
cannot be deleted.

 Change a field type
 Click the Type text box to display the type
options, and then select the required type.
 Notes:
• Virtual field types can only be changed to other
Virtual fi eld types. For example, a Virtual
Character fi eld could be changed to a Virtual
Date field.
• Field types cannot be changed for Editable,
Boolean or Multistate fi elds; however the data
within this field in the database can be
changed.
 Change a field name
 Click in the Field Name cell of the fi eld name
to be changed and enter the new name.

Why use IDEA software:-
• Easy to setup and learn
• Ability to calculate and analyze large amounts of data inputted
• Customization on a case-by-case basis
• Can use on large quantities of data and quickly analyze them.
• Uses logic that can be followed if one is an auditor. I, for example, could understand the logic
in several samples, i.e., how the number of samples thrown changes when risk changes from
low to moderate in proportion taking in consideration the materiality.
• Other audit firms are using 2 software for the process that IDEA alone can do. So, IDEA has
a definite advantage here.
• Customizable by the company.
 One example of specific scenario in [CaseWare] IDEA is the ability to run samples separately
and then based of the results, compare the values recorded and easily discern if there are any
variables or discrepancies within the data itself. Also, we can test journal entries with certain
parameters to check the audit for any issues that may arise pertaining to the criteria. By
testing, we can make sure the data is accurate and sufficient.

Bibliography:-
 ICITSS Course Material Module
 www.wikipedia.org
 www.caseware.com
 www.softwareadvice.com
 www.audimation.com

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