What is a potential problem related to data analytics in an audit practice?

Data security must be ensured is the correct choice because it highlights a critical concern in the use of data analytics within an audit practice. When auditors utilize data analytics, they often handle large volumes of sensitive financial data, which may include personally identifiable information or proprietary business information. Ensuring that this data is protected from breaches or unauthorized access is paramount, as any lapse in security could lead to legal repercussions, financial loss, and damage to reputation for both the audit firm and the client.

With the increasing reliance on technology and digital tools in auditing, data security measures like encryption, access controls, and secure data storage become essential practices. It is not just about analyzing data effectively, but also about conducting the analysis in a manner that maintains the confidentiality and integrity of the information.

The other potential issues, while relevant, do not represent the same level of criticality as data security. For instance, while the speed of data processing might influence costs, it mainly pertains to efficiency rather than a direct problem impacting the audit’s viability. Similarly, stating that data analytics has no significant impact on audit outcomes is misleading, as data analytics has progressively become a powerful tool that enhances audit effectiveness. Lastly, while accessing external market data can present challenges, it is often seen as a logistical