Topic 8 - Data Analytics

Business analytics can be used by management to A. Identify new topics and term relationships. B. Build and maintain standards for data quality. C. Evaluate opportunities for enhancement or advancement. D. Specify the type of value and the applicable mathematical or logical operation methodology.

C. Evaluate opportunities for enhancement or advancement. Management utilizes data analytics to evaluate operational, financial, and other data to identify any deviations from the norm and opportunities for enhancement or advancement.

Each of the following represents a characteristic of big data except A. Size. B. Speed. C. Mixture. D. Uniformity.

D. Uniformity. Big data is often characterized by the "4 Vs" - volume, variety, velocity, and veracity. Thus, uniformity is not a characteristic of big data.

Useless information, or noise, is a limitation of big data that A. Corrupts the results. B. Restricts available information. C. Makes it more difficult for non-technical people to choose a course of action. D. Requires interpretation before use.

A. Corrupts the results.

Which of the following data analytics methods should an auditor use to report on actual results? A. Descriptive analysis. B. Information discovery. C. Text analysis. D. Diagnostic analysis.

A. Descriptive analysis. Descriptive analysis is the most basic and commonly used data analytics method and concentrates on the reporting of actual results.

Information discovery is included in what stage of data analytics application? A. Obtain relevant data. B. Communicate results. C. Analyze data. D. Define questions.

A. Obtain relevant data.

An organization's primary focus is on what it needs to do in order to accomplish its predicted future. Which of the following data analytics methods would best address this concern? A. Prescriptive analysis. B. Network analysis. C. Predictive analysis. D. Anomaly detection.

A. Prescriptive analysis. Prescriptive analysis concentrates on what an organization needs to do in order for the predicted future results to actually occur and therefore addresses this concern.

The type of data analytics that is most likely to yield the most impact for an organization but is also the most complex is called A. Prescriptive analysis. B. Predictive analysis. C. Diagnostic analysis. D. Descriptive analysis.

A. Prescriptive analysis. Prescriptive analysis uses descriptive, diagnostic, and predictive analytics to improve business strategy. It concentrates on what an organization needs to do in order for the predicted future results to actually occur. This type of analytics provides the most benefit but requires the most inputs.

Which of the following is a descriptive analytic technique that can help management to analyze a prior quarter's sales data? A. Using summary statistics to calculate the average and median sales number during the quarter. B. Profiling consumer spending to identify abnormal current purchasing trends. C. Reviewing the relationship between sales and overall consumer spending for the quarter to understand trends. D. Performing regression analysis to determine what the appropriate level of quarterly sales should have been.

A. Using summary statistics to calculate the average and median sales number during the quarter. Descriptive analytics uses current and past data to identify trends and relationships. For example, summary statistics describe sales data from the previous quarter to help management analyze it.

Qualitative and quantitative methodologies and procedures used to retrieve data from data sources is the definition of A. In-memory analytics. B. Data analytics. C. Data mining. D. Data management.

B. Data analytics. Data analytics uses both qualitative and quantitative methods to gather and examine data, helping guide decision-making.

Data normalization focuses on conserving A. Data availability. B. Data compliance. C. Data integrity. D. Data confidentiality.

C. Data integrity. Data normalization reduces redundancy by storing each element only as needed, ensuring accurate data and correcting anomalies.

A study finds a strong correlation between sales of beer and diapers. This is an example of A. Predictive analytics. B. Error detection. C. Data mining. D. Data management.

C. Data mining. Data mining examines large amounts of data to discover patterns in the data. Finding the correlation between seemingly unrelated data (e.g., sales of beer and diapers) is an example of data mining.

A credit card company that processes millions of transactions each year has experienced an increase in fraudulent transactions. The company maintains a data warehouse with data about customers and transactions from the past 5 years. How could the company best use this data to detect potentially fraudulent charges within 24 hours of receipt of transaction data? A. Increase the internal audit staff. B. Use sequential coding for authorization numbers. C. Employ data mining. D. Adopt more stringent credit-approval policies.

C. Employ data mining. Data mining analyzes large amounts of transaction data to uncover hidden patterns, such as trends in fraudulent activity. By applying data mining techniques, the company can identify these patterns and detect potentially fraudulent charges in real-time, speeding up the process of decision-making and reducing the risk of fraud.

Which of the following best represents the application of predictive analytics? A. A consultant organizes an analysis of causation for dissatisfied workers and possible interactions among causes. B. The human resource manager prepares an analysis to show which departments have the highest employee turnover. C. The website recommends pet toys and bedding after the customer purchases pet food. D. A cost accountant monitors whether direct materials used are within the acceptable variations for the last 6 months.

C. The website recommends pet toys and bedding after the customer purchases pet food. In retail, predictive analytics suggests related products during checkout based on what other customers bought with the same item.

Which one of the following statements defines data mining? A. A process of using algorithms that serve to facilitate efficient communication within a firm. B. A system used to develop a firm's performance metrics. C. A system used to organize and interpret complex data to ensure the data has been accurately recorded in the database. D. A process of using statistical techniques to extract and analyze data from large databases to discern patterns and trends.

D. A process of using statistical techniques to extract and analyze data from large databases to discern patterns and trends.

Entities that can benefit from using data analytics include A. Not-for-profit entities. B. Business organizations. C. Government agencies. D. All of the answers are correct.

D. All of the answers are correct.

Deviation from expected results can be identified by which application of data analytics? A. Data fusion. B. Prescriptive analysis. C. Diagnostic analysis. D. Anomaly detection.

D. Anomaly detection. Anomaly detection is used to identify unusual patterns or deviations from the norm or expected results.

A company uses big data analytics in marketing. Which of the following is a limitation of using big data? A. Data collected only represent untapped customers but not tapped customers. B. The company can use big data to predict customer behaviors. C. Data results cannot be visualized to identify and forecast customer trends. D. Big data often cannot explain why customers behave in certain ways.

D. Big data often cannot explain why customers behave in certain ways.

Data analytics perform all of the following except A. Retrieval of data. B. Inspection of data. C. Qualitative methodologies. D. Decision making.

D. Decision making. Data analytics uses qualitative and quantitative methods to retrieve and examine data, helping inform decision-making based on specific requirements.

Under which category of data analysis should "anomaly detection" be classified? A. Diagnostic analysis. B. Prescriptive analysis. C. Predictive analysis. D. Descriptive analysis.

D. Descriptive analysis. Anomaly detection finds unusual patterns or deviations, focusing on reporting past data through descriptive analysis.

Under what data analytics method would score cards be used? A. Predictive. B. Diagnostic. C. Prescriptive. D. Descriptive.

D. Descriptive. Score cards break down an observation into different aspects to facilitate the identification of what is happening now.

A company identified the increasing operating costs as the reason for the declined profit margin for the previous year. To achieve its targeted profit margin for the coming year, the company develops a plan to cut its operating costs by 20%. Which of the following correctly matches the actions of the company and the type of data analytics methods used? Reason Identification = ___ & Plan Development = ___ A. Descriptive analysis, predictive analysis B. Predictive analysis, prescriptive analysis C. Diagnostic analysis, predictive analysis D. Diagnostic analysis, prescriptive analysis

D. Diagnostic analysis, prescriptive analysis Descriptive analysis: Summarizes past data to explain what happened. Diagnostic analysis: Identifies the cause of past events. Predictive analysis: Uses data to predict what is likely to happen in the future. Prescriptive analysis: Suggests the best actions for future success.

Which of the following is a critical success factor in data mining a large data store? A. Image processing systems. B. Effective search engines. C. Accurate universal resource locator (URL). D. Pattern recognition.

D. Pattern recognition.

Which of the following can be discovered using a data-mining process? A. Standard query reporting. B. Data structure. C. Artificial intelligence. D. Previously unknown information.

D. Previously unknown information. Data mining helps uncover unexpected patterns, like how diapers and beer are often bought together at convenience stores late at night. This process reveals hidden relationships in data that weren't previously known, providing valuable insights for decision-making.