Chapter 1. Data Analytics in Accounting and Business
Tax compliance deals primarily with filing tax returns. In contrast, tax planning primarily helps
minimize the amount of taxes paid.
An attempt to estimate or predict, for each unit, the numerical value of some variable using some type of statistical model would be called the _____________ approach.
regression
In a significant paradigm shift, data analytics will allow auditors to:
stay engaged with clients beyond the audit
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, _____, and accuracy of the audit.
transparency
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
Which would NOT be considered as one of the seven skills that analytic-minded accountants should have?
Become a data scientist
The process of evaluating data with the purpose of drawing conclusions to address business questions is defined as:
Data Analytics
Which would NOT be considered as one of the seven skills that analytic-minded accountants should have?
Data description
True or false: Data analytics involves only the analysis of unstructured data.
False
_____ data might be used to address many of the questions facing financial reporting.
Internal and external
_____ discovered from past archives enable business to identify opportunities and risks and better plan for the future.
Patterns
The 3 V's describing Big Data include: Volume, Variety and _____.
Velocity
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.
data analytics
Audit firms are increasingly considering operational data such as manufacturing logs, customer relationship management data and supply chain data primarily to _____:
help companies refine their operations
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 _____.
investment in R&D (research and development)
Traditional audit approaches tested data _____ of the transactions; in contrast, audits that fully integrates big data and analytics will test the full _____ of data.
sample; population
McKinsey Global Institute estimates that Data Analytics could generate up to $3 _____ in value each year.
trillion
Which would not be considered as one of the seven skills that analytic-minded accountants should have?
Ability to house huge data sets
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?
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.
Address and Refine Results
Which testing approach would be considered to be an attempt to discover associations between individuals based on transactions involving them?
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?
Communicate Insights
Data Visualization would be part of which step of the IMPACT cycle?
Communicate Insights
Asking questions like "Are our customers paying us in a timely manner" would be the first step in which of the following processes?
IMPACT cycle
Due to its iterative nature, what comes next in the iterative IMPACT cycle after outcomes are tracked?
Identify the questions
Reviewing data availability in a firm's internal and external systems would be an example of which step in the IMPACT cycle?
Master the Data
ETL (Extraction, Transformation and Loading) would be an example of which step in the IMPACT cycle?
Master the Data (Step 2)
Which testing approach would be considered to be an attempt to identify similar individuals based on data known about them?
Similarity Matching
Data Analytics may use what source to assess the probability of a goodwill write-down, warranty claims or the collectability of bad debts?
Social media
A digital dashboard would be part of which step of the IMPACT cycle?
Track Outcomes
True or false: Data Analytics can impact Financial Accounting by helping evaluate estimates and valuations.
True
True or false: Data analytics expands auditors' capabilities in services like testing for fraudulent transactions.
True
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.
accuracy
Data sets that are too large and complex for businesses' existing systems to handle are called _____.
big data
An attempt to assign each unit (or individual) in a population into a few categories would be called the _____ approach.
classification
The firm practice of monitoring competitors, customers and suppliers to better understand its opportunities and threats is called _____.
data analytics