Class 5

Audit Risk Conclusion and Transaction Analysis 1

Thursday, October 9, 2025

Class Overview

Why is this important?

Through practical exercises, students will gain hands-on experience in extracting, transforming, and analyzing P-card transaction data, applying forensic audit techniques, and interpreting the results to assess compliance with internal controls. The case study also emphasizes the importance of asking the right questions and applying appropriate data analytics techniques, which are crucial skills for internal auditors.

What will we do?

This class concludes the audit risk material and then provides an introduction to an in-depth exploration of auditing purchasing card (P-card) transactions at Oklahoma State University (OSU) with a focus on developing an analytical mindset. Students will work through a series of tasks that emphasize critical aspects of data analysis, including understanding P-card guidelines, preparing data for analysis, and using analytical tools to detect potential internal control violations or fraudulent transactions.

How this relates to other classes:

Building on the prior class's introduction to the F-score for assessing the risk of material misstatements, this class takes a more focused approach by applying data analytics techniques to a specific audit scenario: auditing P-card transactions at Oklahoma State University. While the F-score helped students understand how to quantify misstatement risk using financial data, this class extends those analytical skills to the operational side, where students will evaluate internal controls and identify potential fraudulent or non-compliant transactions. Both classes emphasize the importance of using structured data and analytics to inform auditing decisions, but here students gain practical experience in transforming raw transaction data and applying forensic techniques to real-world cases.

Materials and Preparation

Class Materials
  • Case: Analytics_mindset_case_studies_PCard
  • Slides: PowerPoint or PDF
  • Analytics Tools: Alteryx, Git and GitHub
  • Suggested Pre-Class Preparation
    1. The P-Card case is relatively long, we will aim to cover Parts I and II in this class and start on, or be set-up for, Part III and later (IV-VI).
    2. Part I involves several discussion questions that will be handled using the discussion groups with warm call to facilitate full class discussions.
    3. Part II is the primary ETL, we will undertake this for all files using Alteryx and answer the discussion questions that focus on data quality.
    4. Part III is the second stage of the ETL process, and will involve some light data cleaning.
    5. Please note that this case refers to Access, however, we will use Alteryx instead.
  • Class Plan
    1. The first half of this class focuses on concluding the audit risk material, focusing on material weaknesses in internal controls.
    2. In the first half of class we will work on an individual memo related to a restatement and material weakness in internal controls.
    3. The second half of class will be the first of a two-part class examining transaction analytics. Using the P-Card case we will examine links between credit card expenditures and various internal controls.
    4. The class is both discussion and labs focused.

Required Deliverables

Deliverable Due Date Canvas Submission Portal
Professionalism (individual): Audit Risk Memo October 9th, 2025 Upload to Canvas