Exploratory Analysis
The goal of exploratory analysis is to gain a full understanding of the nature of a population and the data available to analyze it. Exploratory analysis is especially important before sampling as a means of assessing the level of heterogeneity of a population. Auditors typically use exploratory analysis techniques to examine the distributions of both continuous and categorical variables and the relationships between variables, as well as to identify outliers and anomalies that may warrant special attention. Auditors need to rely on analysis of distributions of categorical and continuous variables of interest available in administrative databases, as well as on the opinions of experts familiar with the population and the related data. Once this is done, variables of interest can be assessed for importance and a risk-based approach to examination can be developed for each.
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