ACC 615 Ch 6 SmartBook, Lecture Video & Powerpoint

What would be the sampling interval if we are using a manual approach to monetary unit sampling for a book value of $2,000,000 and a sample size of 200?

10,000

Which of the following is the best example of artificial intelligence use in auditing?

A tool that prompts an auditor to reject management's proposed estimate

When a Z-score is used to identify anomalies, which of the following most likely represents an outlier?

An observation with a Z-score of +3.1

_____ is designed around the idea that computers can learn about action or behavior from the past and predict the course of action for the future.

Artificial intelligence

Which of the following is an example of the use of descriptive analytics?

Calculating the total sales for the month

The acronym CAAT stands for:

Computer-assisted Audit Techniques

Which of the following is an example of the use of predictive analytics?

Determining whether a transaction is likely to be fraud based on a risk score.

Testing segregation of duties would be an example of an auditor addressing which audit-related question?

Do I need to test internal controls?

Which of the following is true regarding audit analytics:

For CAATS, a periodic validation should take place to make sure they continue to function as expected

In practice, auditors frequently must make multiple requests for flat files or data extractions from the

IT manager

Which of the following is an example of the use of diagnostic analytics?

Identifying missing or duplicate payments to vendors

Which of the following best illustrates the use of sentiment analysis in auditing.

Predicting an audit opinion based on comments written by the audit associates

Which of the following best illustrates the use of classification in auditing.

Predicting whether a transaction is fraudulent or not

True or false: One potential audit test is count the number of journal entries submitted by each user to detect unusually high volume of submissions.

T

Which of the following is NOT an example of a summary statistic?

The employees whose names start with "R"

Which of the following is NOT an example of a summary statistic?

The employees whose names start with "R".

The detection and resolution of audit exceptions may be a valuable measure of the efficiency and effectiveness of each audit. Which phase of the IMPACT model would we expect to keep track of these audit exceptions as they occur?

Track outcomes

True or false: Audit-related data may be available outside of the traditional financial reporting system.

True

True or false: Most audit data are provided in structured (or tabular) form.

True

Which of the following is an example of the use of prescriptive analytics?

Using past manager actions on estimates to recommend a similar action in the future.

The ___________ shows the relative position of a point of interest to the population.

Z-score

CAATs are __________ scripts that can be used to validate data, test controls, and enable substantive testing.

automatic

Descriptive analytics enable auditors to set a ____________ or point of reference for their evaluation.

baseline

Predicting whether a company will be a going concern (or not a going concern) would be an example of _____.

classification

Separating transactions as either being fraudulent or not fraudulent would be an example of _____.

classification

Which testing approach would be used to predict whether certain cases should be evaluated as having fraud or no fraud?

classification

________ can be used to group data by less obvious similarities, such as preference determined through purchase behavior.

clustering

CAATS

common data analytics procedures can be found in this, computer-assisted auditing techniques

CAATs are automated scripts that can be used to validate data, test controls, and enable substantive testing of transaction details or account balances and generate supporting evidence for the audit. What does CAAT stand for?

computer-assisted audit techniques

what if analysis

decision support systems

_____ analytics are useful for sorting and summarizing data to create a baseline for more advanced analytics.

descriptive

sequence check

detects gaps in records and duplicates entries

Benford's Law would be an example of _________ analytics.

diagnostic

Exact and fuzzy matching would be an example of _________ analytics.

diagnostic

Which items would be currently out of scope for Data Analytics?

direct observation of processes

Which of the following is a question an auditor might ask when applying Data Analytics?

does it add value

sentiment analysis

evaluates text for positive or negative sentiment to predict positive or negative outcomes

drill down

explores the details behind the values

Drill down is used to:

find specific values that are summarized in general data

What describes finding correspondences between at least two types of text or entries that may not match perfectly?

fuzzy matching

IDEA, ACL, or TeamMate Analytics are examples of ______ audit software.

generalized

age analysis

groups balances by date

stratification

groups data by categories

clustering

groups records by non obvious similarities

extent

how much we can test

sorting

identifies largest or smallest values

benfords law

identifies transactions or users with nontypual activity based on the distribution of first digits

generalized audit software

include excel and idea

Data analytics can be applied to the auditing function to

increase coverage of the audit, while reducing the time the auditor dedicates to the audit tasks

A(n) _________ join will show only the records from both tables that match and exclude everything that doesn't match.

inner

exact and fuzzy matching

joins tables and identifies plausible relationships

summary statistics

mean, median, min, max, count, sum

audit data analytics can help improve the

nature, extent, and timing of audit procedures

An right join between employees (left table) and sales transactions (right table) would show:

only the employees involved in sales transactions

z-score

outlier detection

high z score values represent

outliers

Data stored in _____________ can be scanned and converted to tabular data using specialized software.

paper documents

If a sample is of appropriate size, its features can be confidently generalized to the

population

The determinants for sample size include all of the following except:

potential risk of account

Regression analysis would be an example of _________ analytics.

predictive

Which type of audit analytics might be used to find hidden patterns or variables linked to abnormal behavior?

predictive

_________ analytics are used to find hidden patterns and determine a likely value or class.

predictive

classification

predicts a category for a record

applied statistics

predicts a specific outcome or class

regression

predicts specific dependent values based on independent variable inputs

Artificial intelligence would be an example of _________ analytics.

prescriptive

predictive and prescriptive analytics

provide less deterministic output and more probabilistic models, judging things like liklihood and probability

sampling

random and monetary unit

Predicting the relationship between overtime incurred and worker productivity would be most appropriate for a _____ analysis.

regression

Which testing approach would be useful in assessing the value of inventory shrinkage given multiple environmental factors?

regression

Monetary unit sampling is more likely to:

sample accounts with larger balances

Data analytics increasingly allows testing of the full population instead of ____

sampling

Data analytics increasingly allows testing of the full population instead of _____.

sampling

What type of analysis would help auditors find missing checks?

sequence check

_____ are useful for identifying duplicate and/or missing transactions.

sequence checks

A fuzzy match is used to join tables on:

similar values

______ can be used to simplify analysis by grouping data on specific data attributes, such as a state or zip code.

stratification

_______________ statistics provide insight into the relative size of a number compared with the population.

summary

timing

tells us how often the procedure should be run

Auditors can perform Data Analytics on _________ to determine the sequence of approvals.

time stamps

Surveillance video or text from email are examples of _____ Big Data potentially usable by auditors.

unstructured

probability

uses a rank score to evaluate the strength of classificiation

artificial intelligence

uses observations of past actions to predict future actions for similar events

A segregation of duties analysis may assist auditors in finding

which accounting users had too much access to other accounting tasks

nature

why we perform audit procedures