Spreadsheets vs ACL/IDEA as data analysis tool

Spreadsheets can be used for most routine audit analysis. Some of the features of MS-Excel as audit analysis tool are:

• Excel will import a wide range of report file types (.txt, .csv, .htm, etc.), however there is a limitation when working with pdfs (although there are pdf converter programs available).
• Joining data sets in Excel is possible with Lookup or Conditional (IF, SUMIF, OR, AND) functions - for example, matching January 2008 cash receipts to December 2007 accounts receivable to test an existence assertion.
• Pivot tables are useful in analyzing large sets of related standing data (i.e. statistical accounting ledgers, like those used in insurance systems).
• The subtotal and filtering tools aid in summarizing data sets, (i.e. summarizing the general ledger and matching it to a trial balance to ensure completeness of a journal entry population).
• There is a sampling tool and random number generator in Excel that can be used inconjunction with a good non-statistical sampling template.

IDEA is still better for very large data sets, or many data sets, but overall, Excel can handle most routine audit tasks. But Idea and ACL will allow direct extraction from client systems, summarisation, statistical functions, the ability to join or append separate databases, stratification, and have various inbuilt functions that do not exist in off-the-shelf spreadsheet software. However the you can perform most of these tasks manually in Excel or Open Office. Excel and Open Office both also suffer from the serious limitation of only allowing approx 65,000 rows of data, which is simply not sufficient for serious database analysis. A big step forward is that Excel 2007 now has 1 million rows capacity which is a huge step up on earlier versions. So if the requirement is simple and requires no more than 65,000 rows you can use most spreadsheets. Otherwise upgrade to Excel 2007 for greater capacity and a cheaper (as well as more versatile) alternative to specialist analytics. Or for the most serious assignments the you will need to use Idea or ACL.

Source: http://www.linkedin.com/answers/finance-accounting/auditing/FIN_AUD/472598-22303018?goback=%2Eavq_472598_22303018_0_*2 For more Q&A visit http://www.kellypartners.co.uk