Question:How does predictive analytics help auditors in identifying potential risks?

Comprehensive and Detailed In-Depth Explanation:

B. Correct Answer:

Predictive analytics uses historical data, machine learning, and statistical models to predict future risk events.

It identifies patterns in security incidents, financial trends, and operational failures to anticipate risks before they occur.

A. Incorrect:

Real-time analysis is part of monitoring, but predictive analytics focuses on forecasting risks, not just real-time reporting.

C. Incorrect:

Data organization is essential but does not involve forecasting risks.

Relevant Standard Reference:

ISO 31000:2018 (Risk Management – Guidelines on Using Data Analytics in Risk Assessment)