Chapter 1 - SmartBook

According to the textbook, Data Analytics can be applied to taxes by helping to predict the tax consequences of a potential international transaction, a proposed merger or acquisition or ___________. accounts receivable transaction investment in R&D (research and development) accounts payable transaction

investment in R&D (research and development)

Tax compliance deals primarily with filing tax returns. In contrast, tax planning primarily helps minimize the cost of filing taxes. maximize the amount of sales tax collected. minimize the amount of taxes paid.

minimize the amount of taxes paid.

In a significant paradigm shift, data analytics will allow auditors to: to perform an audit in a less expensive manner stay engaged with clients beyond the audit be able to perform an audit much quicker

stay engaged with clients beyond the audit

McKinsey Global Institute estimates that Data Analytics could generate up to $3 _____ in value each year. billion million trillion

trillion

According to the text, cleaning the data takes between ____ and ____ percent of data analytic professional's time. 10; 20 40, 70 20, 50 50; 90

50; 90

Asking colleagues what they think of the analysis would be considered to be part of which stage of the IMPACT cycle. Address and Refine Results Communicate Insights Identify the Question Track Outcomes

Address and Refine Results

In which step of the IMPACT cycle do data analysts slice and dice the data, find correlations, ask ourselves further questions, ask colleagues what they think, and revise and rerun the analysis? Perform Test Data Track Outcomes Address and Refine Results Communicate Insights

Address and Refine Results

Slicing and dicing the data, finding correlations, revising and rerunning the analysis would be considered to be part of which stage of the IMPACT cycle. Track Outcomes Communicate Insights Address and Refine Results Identify the Question Master the Data

Address and Refine Results

Which would not be considered as one of the seven skills that analytic-minded accountants should have? Become a data scientist Data scrubbing and data preparation Recognizing data quality Descriptive data analysis

Become a data scientist

Which testing approach would be considered to be an attempt to divide individuals (like customers) into groups (or clusters) in a useful or meaningful way? Link Prediction Regression Clustering Similarity Matching

Clustering

Which testing approach would be considered to be an attempt to discover associations between individuals based on transactions involving them? Link Prediction Profiling Correlation Co-occurrence Grouping

Co-occurrence Grouping

After data analysts slice and dice the data, find correlations, ask ourselves further questions, ask colleagues what they think, and revise and rerun the analysis, what comes next in the IMPACT cycle? Track Outcomes Address and Refine Results Communicate Insights Perform Test Data

Communicate Insights

The process of evaluating data with the purpose of drawing conclusions to address business questions is defined as: Data Analytics Accounting Data Processing Big Data

Data Analytics

True or false: Data analytics involves only the analysis of unstructured data.

False

Asking questions like "Are our customers paying us in a timely manner" would be the first step in which of the following processes? Systems Analysis and Design Business Intelligence Data Analytics IMPACT cycle

IMPACT cycle

The first step in the IMPACT cycle is: Identify the question Perform the test plan See what data is available Track outcomes

Identify the question

___________________ data might be used to address many of the questions facing financial reporting. Unrelated data warehouse Internal Internal and external External

Internal and external

Scrubbing the data would be an example of which step in the IMPACT cycle? Identify the Question Communicate Results Perform Test Plan Master the Data

Master the Data

Data Analytics may use what source to assess the probability of a goodwill write-down, warranty claims or the collectibility of bad debts? Utility bills Business intelligence Social media Customer receipts

Social media

Data Analytics may use what source to assess the probability of a goodwill write-down, warranty claims or the collectibility of bad debts? Utility bills Social media Business intelligence Customer receipts

Social media

A digital dashboard would be part of which step of the IMPACT cycle? Addressing and Refining Results Identify the Question Track Outcomes Master the Data

Track Outcomes

The "T" as part of the IMPACT cycle stands for: Track Outcomes Transfer Knowledge Time to Rethink Analysis Technology

Track Outcomes

True or false: Data analytics expands auditors' capabilities in services like testing for fraudulent transactions.

True

The 3 V's describing Big Data include: Volume, Velocity and ________________. Valuable Volatility Variability Variety

Variety

The 3 V's describing Big Data include: Volume, Variety and ________________. Verification Volatility Velocity Variability

Velocity

Audit firms are increasingly considering operational data such as manufacturing logs, customer relationship management data and supply chain data primarily to ______________________: a) help companies refine their operations b) evaluate goodwill impairment c) evaluate the companies ability to continue as a going concern d) find material misstatements

a) help companies refine their operations

Financial accounting often has challenges with valuation and estimation in all but the following area: accounts payable goodwill inventory accounts receivable

accounts payable

The Forbes Insight/KPMG report, "Audit 2020: A Focus on Change.", found that the vast majority of survey respondents believe that technology will enhance the quality, transparency, and ____________ of the audit. focus results accuracy

accuracy

Which would not be considered as one of the seven skills that analytic-minded accountants should have? a) Data scrubbing and data preparation b) Defining and addressing problems through statistical data analysis c) Ability to house huge data sets d) Recognizing data quality

c) Ability to house huge data sets

The Forbes Insight/KPMG report, "Audit 2020: A Focus on Change.", found that the vast majority of survey respondents believe that technology will: a) be required to audit companies in the near future b) will make auditing more challenging because digital assets are harder to audit than hard assets c) enhance the quality, transparency and accuracy of the audit

c) enhance the quality, transparency and accuracy of the audit

Traditional audit approaches tested data _____________ of the transactions; in contrast, audits that fully integrates big data and analytics will test the full _______________ of data. a) sample; set of internal and external samples b) population; sample c) sample; population

c) sample; population

An attempt to assign each unit (or individual) in a population into a few categories would be called the _____________ approach. similarity matching clustering regression classification

classification

The firm practice of monitoring competitors, customers and suppliers to better understand its opportunities and threats is called __________. information technology data analytics big data business intelligence

data analytics

The real value inherent in data comes from ____________, discovering the various buying patterns of customers, investigating anomalies that were not predicted in firm operations, forecasting future demand and supply and so on. customer relationship management supply chain software business intelligence data analytics

data analytics