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
