Accounting Senior Sem Midterm pt 2
C
Which of these terms is defined as being a central repository of descriptions for all of the data attributes of the dataset? A. Big Data B. Data warehouse C. Data dictionary D. Data Analytics
B
Which should not be considered as one of the 7 skills that analytics mindsets should have? A. Defining & addressing the problem through statistical data B. Ability to house huge data sets C. Recognizing data quality D. Data scrubbing and preparation
D
Which term defines and describes each XBRL financial element? A. Data dictionary B. Descriptive statistics C. XBRL-GL D. Taxonomy
A
Which testing approach would be used to predict whether certain cases should be evaluated as having fraud or no fraud? A. Classification B. Probability C. Sentiment analysis D. Artificial intelligence
C
__________ mark the split between one class and another. A. Decision trees B. Identifying the questions C. Decision boundaries D. Linear classifiers
Order to Cash Subledger
___________ _____ ____________ ______________ - orders and receivables from customers
electronic working paper
___________ ___________ ___________ platforms automate the collection of evidence and enable online sharing through the cloud
audit plan
___________ ____________-key to determining consistency Tells in advance these are the things to plan the audit, test controls, substantive testing, analyze and come up with your opinion
c
financial accting often has challenges with valuation and estimation in all but the following area a. goodwill b. a/r c. a/p d. inventory
avg total assets/avg total equity
financial leverage
taxonomy
helps describe each key data element Everyone using same definition facilitates transparency and accountability
tiffanys
high end high profit margin, low asset turnover Spreadsheet
asset turnover
how efficiently a company uses its assets to generate revenues
financial leverage
how efficiently a company uses its assets to generate revenues
internal process
how efficiently the company is operating
halo
performs Data Analytics on the collected evidence,
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
net profit/sales
profit margin formula
monetary unit sampling
is useful for targeting larger transactions. Probability or dollar Used in substantive testing- look at sample of transactions, biased toward larger transaction amounts Ensure sample will be larger dollar amounts Exam Allows auditors to evaluate account balances, make a selection in an audit More likely to pull larger account balances, therefor higher risk exposures
exact & funny
matching allow you to join tables on complete or partial values
c
which of the following is a reason to use declarative visualization? a. to generate a data model b. to explain interesting insights in the data c. to prompt convo and debate
C
which of the following is an accurate description of the audit data standards? a. a method of extracting b. the required way for public companies to store their data c. a guide for formatting the way in which data are provided to auditors
identifying the questions
§What are you trying to measure? §What are some benchmarks for that metric? (e.g. competitor, industry) §What is the goal of the metric?
D
Models associated with regression and classification data approaches have all but this important part: A. Identifying which variables (we'll call these independent variables) might help predict an outcome (we'll call this the dependent variable). B. The functional form of the relationship (linear, nonlinear, etc.). C. The numeric parameters of the model (detailing the relative weights of each of the variables associated with the prediction). D. Test data.
drill down
Modern software allows you to __________ __________ by clicking through summary values to view the underlying values.
a
mckinsey global institute estimates that data analytics could generate up to $3 ________in value each year a.trillion b. billion c. million
C
Monetary unit sampling is more likely to: A. Sample accounts with smaller balances. B. Sample accounts with less risk. C. Sample accounts with larger balances. D. Sample accounts with more risk.
internal auditors
Most of the innovation is led by____________ _____________as they have better understanding of the organization and can use the analytics to improve efficiency and effectiveness.
financial performance
Net Profit Net Profit Margin Gross Profit Margin Operating Profit Margin EBITDA Revenue Growth Rate Total Shareholder Return (TSR) Economic Value Added (EVA) Return on Investment (ROI) Return on Capital Employed (ROCE) Return on Assets (ROA) Return on Equity (ROE) Debt-to-Equity (D/E) Ratio Cash Conversion Cycle (CCC) Working Capital Ratio Operating Expense Ratio (OER) CAPEX to Sales Ratio Price-to-Earnings Ratio (P/E Ratio)
b
Which audit data standards ledger identifies data needed for purchase orders, goods received, invoices, payments, and adjustments to accounts? A. Order to Cash Subledger B. Procure to Pay Subledger C. Inventory Subledger D. Base Subledger
benfords law
Which distributions would you recommend be tested using ___________ ______________-? -Large data sets -Naturally occurring numbers -Ex. Sales transactions over a year
AI
models expected behavior by evaluating past actions taken by auditors to predict expected behavior in an unknown case.
A
Which items would be currently out of scope for Data Analytics? A. Direct observation of processes B. Evaluation of time stamps to evaluate workflow C. Evaluation of phantom vendors D. Duplicate payment of invoices
a
Which of the following defines the time period, the level of materiality, and the expected time for an audit? A. Audit scope B. Potential risk C. Methodology D. Procedures and specific tasks
B
Which of the following is not a typical example of nominal data? A. Gender B. SAT scores C. Hair color D. Ethnic group
D
Which of these is not included in the five steps of the ETL process? A. Determine the purpose and scope of the data request. B. Obtain the data. C. Validate the data for completeness and integrity. D. Learn what data is available in the data warehouse.
D
Which skills were not emphasized that analytic-minded accountants should have? A. Data quality B. Descriptive data analysis C. Data visualization D. Data and systems analysis and design
B
Which stage of the IMPACT model (introduced in chapter 1) would the use of sparklines fit? A. Track outcomes B. Communicate insights C. Address and refine results D. Perform test plan
C
Which testing approach would be useful in assessing the value of inventory shrinkage given multiple environmental factors? A. Probability B. Sentiment analysis C. Regression D. Applied statistics
B
Which type of audit analytics might be used to find hidden patterns or variables linked to abnormal behavior? A. Prescriptive analytics B. Predictive analytics C. Diagnostic analytics D. Descriptive analytics
b
Which would you predict would have more positive sentiment in a 10-K? A. The footnotes to the financial statements B. The MD&A section of the financial statements
C
Who is most likely to have a working knowledge of the various ERP systems that are in use in the company? A. Chief executive officer B. External auditor C. Internal auditor D. IT staff
summary stastics
allow you to see the relative size of a value to its population.
predictive
analytics help auditors discover hidden patterns linked to abnormal behavior.
prescriptive
analytics make recommendations based on past data.
predictive & prescriptive
analytics provide less deterministic output and more probabilistic models, judging things like likelihood and probability.
diagnostic
analytics provide more details into not just the records, but also records or groups of records that have some standout features.
text mining
analyzes the frequency of words in unstructured data (e.g., financial disclosure) and matches those to a sentiment dictionary (e.g., words identified as positive or negative).
A
Why is Supplier ID considered to be a primary key for a Supplier table? A. It contains a unique identifier for each supplier. B. It is a 10-digit number. C. It can either be for a vendor or miscellaneous provider. D. It is used to identify different supplier categories.
inventory subledger
________________ ________________ - location and on hand
external
________________ auditor- must be independent, FS, can issue an audit report, collect enough evidence
procedures
_________________ will identify data, location, and attributes to evaluate.
stratification & clustering
____________________ and _____________ are used to group transactions or individuals by similar characteristics.
internal
____________________ auditor- an EE of the organization, compliance processes, can't issue audit report, making sure company operating efficiently
continuous
_____________________ auditing provides real-time assurance over business processes. This provides increased coverage and timeliness of audit procedures.
data analytics
______________________ are effective for determining audit risk and helping clients understand their businesses.
internal
___________auditors apply analytics in their focus on operational inefficiencies and internal controls.
customer
how the company interacts with customers
organizational capactiy
how the company is training employees
benfords law
identifies abnormal distributions of large numbers. Helps identify trans or users with atypical or unusual activity based on distribution of first digit Ex. Unable to buy something that is 500 without additional authorization but under threshold you can Might create fictitious checks to themselves in amounts below the threshold
sorting
identifies largest or smallest values
sparklines
generally small visualizations that show simple trends Need to be careful about adding ________________- to an existing visual dashboards that have a lot going on b/c it may be too cluttered Need to be used strategically Show trends, replaces, or complements a lot of numbers
customer
give feedback through surveys, number of returns
age analysis
groups balances by date
timing
tells us how often the procedure should be run
completely
the purpose of comparing the number of records and descriptive field statistics for numeric fields is to ensure that the data were extracted ______________
track outcomes
Evaluate detection and resolution of exceptions. Periodically evaluate the procedures for effectiveness.
prescriptive
Examples of prescriptive analytics: What-if analysis Applied statistics Artificial intelligence
a
according to the textbook, data analytics can be applied to taxes by helping to predict the tax consequences of potential international transaction, a proposed merger or acquisition or _____________ a. investment in r & d b. a/r transaction c. a/p transaction
a
after data analysts slice and dice the data, find correlations, revise and rerun the data analysis what part of the IMPACT cycle comes next? a. communicate insights b. address and refine results c. perform test data d. track outcomes
sequence checks
are used for locating gaps or duplicate transactions.
sales / avg total assets
asset turnover
organizational capacity
attaining degrees and certifications
c
when you need to retrieve data that is stored in more than one table which type of clause should you use in your SQL query ? a. together b. combine c. join d. concentrate
c
which of the following common visualization is most useful for showing the relative size of a value by using a color scale a. word cloud b. symbol map c. heat map d. tree map
a
while there a variety of ways the vlookup function can be used in excel , what is one of its primary purposes during the extraction and transformation process? a. to add a column to a table b. to provide summary statistics to a table c. to count the number of records in a table d. to create a data dictionary
B
In general, the more simple the model, the greater the chance of A. Overfitting the data. B. Underfitting the data. C. Pruning the data. D. The need to reduce the amount of data considered.
D
What is considered an essential component of planning an audit and carrying out substantive testing that involves ratio analysis? A. Environmental analysis B. Competitive analysis C. Management integrity analysis D. Analytical procedures
C
What is defined as an interactive report showing the most important metrics to help users understand how a company or an organization is performing? A. KPI B. Performance metric C. Digital dashboard D. Balanced Scorecard
A
What type of analysis would help auditors find missing checks? A. Sequence check B. Benford's law analysis C. Fuzzy matching D. Decision support systems
A
What would you consider to be an Operational KPI? A. Inventory Shrinkage Rate B. Brand Equity C. CAPEX to Sales Ratio D. Revenue per Employee
C
Which approach to data analytics attempts to predict a relationship between two data items? A. Similarity matching B. Classification C. Link prediction D. Co-occurrence grouping
c
Which audit data standards ledger defines product master data, location data, inventory on hand data, and inventory movement? A. Order to Cash Subledger B. Procure to Pay Subledger C. Inventory Subledger D. Base Subledger
C
Which skills were not emphasized that analytic-minded accountants should have? A. Developing an analytics mindset B. Data scrubbing and data preparation C. Classification of test approaches D. Defining and addressing problems through statistical data analysis
A
XBRL stands for: A. Extensible Business Reporting Language. B. Extensive Business Reporting Language. C. XML Business Reporting Language. D. Excel Business Reporting Language.
collab tools & cloud platorforms
_____________________ and _____________________ enable auditors to work together from remote locations and to include team members with a variety of expertise such as specialists.
sentiment analysis
evaluates text for positive or negative sentiment to predict positive or negative outcomes
Predictive
find hidden patterns or variables based on probabilities. Ex. Have a model that tries to predict whether EE or customer with similar characteristics- likely to be good or bad customer. EE- likely to be good or bad customer
clustering
groups records by nonobvious similarities
diagnostic analytics
look for correlations or patterns of interest.
D
__________ is a set of data used to assess the degree and strength of a predicted relationship. A. Training data B. Unstructured data C. Structured data D. Test data
accounting info
used in internal and external auditing and financial statement analysis can also be used to determine how closely an organization is meeting its strategic objectives.
info overload
When too many alarms are false positive, auditors face ______________ _______________, which could distract them from adequately evaluating the system.
c
If purchase orders are monitored for unauthorized activity in real time while month-end adjusting entries are evaluated once a month, those transactions monitored in real time would be an example of a: A. Traditional audit. B. Periodic test of internal controls. C. Continuous audit. D. Continuous monitoring.
methodology
The ___________________ is guided by specific standards, such as the PCAOB audit standards or COSO internal control framework.
text , sentiment
How does ________ mining and ___________ analysis work? Process of extracting info from various documents social media posts to discover patterns, trends, or themes Typically unstructured Hard to analyze Impose structure on text data sources to extract relevant info
sparklines
How might _____________ be used to enhance a DuPont analysis? Would you show the sparklines for each component of the ratio, or would you propose it be shown only for the total? Subjective questions depends If report or dashboard has many facts and figures it could clutter the appearance Depending on what you're showing You need to use judgment
A
Which approach to data analytics attempts to assign each unit in a population into a small set of classes where the unit belongs? A. Classification B. Regression C. Similarity matching D. Co-occurrence grouping
continuous monitoring
__________ _____________ evaluates controls and transactions and is primarily used by management to show effectiveness of internal controls.
sorting
values by smallest or largest values may provide meaningful insight.
d
what is a data dictionary useful for? a. it is a tool for transforming data into a relational database b. it is a listing of tools you can use to analyze a set of data c. it is a tool for performing test plans such as regression on extracted data d. it helps database admin maintain db
a
which of the following is not a step for validating the data for completeness and integrity? a. creating a visualization that describes the data that was extracted in order to communicate the results of the test plan b. comparing descriptive statistics for numeric fields from the extracted data to the statistics in the source db c. validating date/time fields and comparing the descriptive statistics from the extracted data to those in the data source d. comparing the number of records that were extracted to the number in the source db
descriptive analytics
summarize activity or master data on specific attributes.
data analytics
Can improve the nature (why we perform audit procedures), timing, and extent (how much we can test)
identify the problem
What is the audit department trying to achieve using data analytics? Do you need to analyze the segregation of duties to test whether internal controls are operating effectively? Are you looking for operational inefficiencies, such as duplicate payments of invoices?
internal, external
Why has most of the innovation in data analytics originated more in internal audit than an external audit ? _______________l audit- doing routine work everyday, greater opportunity to automate, embedded within the organization __________________- come in for only a few weeks per year
economic
Why is there an _____________ demand for an audit? Investors, creditors want to make sure you're not investing in a company that prepared fraudulent financial statements Crucial for building trust in economic markets- people more willing to invest when they have confidence in the info
D
__________ data would be considered the least sophisticated type of data. A. Ratio B. Interval C. Ordinal D. Nominal
classification
in auditing is going to be mainly focused on risk assessment. The predicted classes may be low risk or high risk.
connect
provides the workflow process that allows managers and partners to review and sign off on the work.
sampling
random and monetary unit
activity
ratios are a computation of a firm's operating efficiency (e.g., asset turnover)
profitability
ratios provide information on the profitability of a company and its prospects for the future (e.g., profit margin)
b
scrubbing the data would be an example of which step in the IMPACT cycle? a. identify the question b. master the data c. communicate insights d. perform the test plan
xbrl
stands for eXtensible Business Reporting Language and is a type of XML (extensible markup language) used for organizing and defining financial elements
heterogeneous
3 different erp systems- can't just consolidate all data into one data warehouse without a translator to translate data into a common format to be loaded into data warehouse Can vary greatly International- all one company, 3 different countries, 3 different systems
roe
= Profit margin × Asset turnover × Financial leverage = (Net profit/Sales) × (Sales/Average total assets) × (Average total assets/Average equity)
c
traditional audit approaches tested data _______________ of the transactions; in contrast, audits that fully integrate big data and analytics will test the full ____________of data a. sample; set of internal and external samples b. population; sample c. sample; population
AI
uses observations of past actions to predict future actions for similar events
xbrl analytical software
uses standardized metrics to consolidate similar tags (e.g., both Revenues and SalesRevenuesNet appear in a standard [Revenue] metric
c
what is the purpose of a data request form? a. to provide an explanation for each field in a database or flat file b. to standardize the way data is stored and provided to the auditor c. to make communication easier between data requester and provider d. to help an analyst extract data herself
false positive
when too many alarms are ____________ ____________, auditors face info overload, which could distract from adequately evaluating the system
D
What type of ratio measure a firm's ability to pay its debts and stay in business? A. DuPont ratio B. Liquidity ratio C. Activity ratio D. Solvency ratio
C
What type of ratio measure a firm's operating efficiency? A. DuPont ratio B. Liquidity ratio C. Activity ratio D. Solvency ratio
descriptive
Ex.audit procedure:Analysis of new accounts opened and employee bonuses by employee and location.
compare
How might standardized XBRL metrics be useful in comparing the financial statements of General Motors, Alphabet, and Alibaba? Can easily ______________ profitability and BS of companies across the world
ee performance
Human Capital Value Added (HCVA) Revenue per Employee Employee Satisfaction Index Employee Engagement Level Staff Advocacy Score Employee Churn Rate Average Employee Tenure Absenteeism Bradford Factor 360-Degree Feedback Score Salary Competitiveness Ratio (SCR) Time to Hire Training Return on Investment
master the data
Identify the data needed to calculate the KPIs. For example: Employee churn rate = Employees who left / Total active employees To find employees who left, you would query employees with end date in the desired period. For total active employees, query employees with a null (empty) end date. Both of these values are located in the Employee Master table. Other considerations: §How often is the data updated? §How often do you need the data?
operations
Six Sigma Level Capacity Utilization Rate (CUR) Process Waste Level Order Fulfilment Cycle Time Delivery in Full, on Time (DIFOT) Rate Inventory Shrinkage Rate (ISR) Project Schedule Variance (PSV) Project Cost Variance (PCV) Earned Value (EV) Metric Innovation Pipeline Strength (IPS) Return on Innovation Investment (ROI2) Time to Market First-Pass Yield (FPY) Rework Level Quality Index Overall Equipment Effectiveness (OEE) Process or Machine Downtime Level First Contact Resolution (FCR)
modern audit
What does the _______________ ______________ look like? The accumulation of an audit with an established criteria Operational Internal controls IT Gathering evidence about info, is there correlation, making sure its in accordance with establish criteria Reduce info risk- info bus making decisions on is inaccurate Reduce so people make better decisions Possibility of incorrect FS
B
What is defined as any calculation measuring how an organization is performing, particularly when that measure is compared to a baseline? A. KPI B. Performance metric C. Digital dashboard D. Balanced Scorecard
A
What is the most appropriate chart when showing a relationship between two variables (according to Exhibit 4-8)? A. Scatter chart B. Bar chart C. Pie graph D. Histogram
D
What is the name of the output from data vendors to help compare companies using different XBRL tags for revenue? A. XBRL taxonomy B. Data assimilation C. Consonant tagging D. Standardized metrics
C
What is the term used to describe the process of assigning XBRL tags internally within a financial reporting/enterprise system? A.XBRL tagging B. XBRL taxonomy C. XBRL-GL D. XBRL dictionary
min
What type of descriptive analytics would you use to find negative numbers that were entered in error?
classification
When talking about ______________, the strength of the class can be important to the auditor, especially when trying to limit the scope (e.g., evaluate only the 10 riskiest transactions).
regression
allows an auditor to predict a specific dependent value based on independent variable inputs. Auditors can use to forecast bad debt expense, inventory shrinkage
use of tags
allows data to be quickly transmitted and received, and the tags serve as an input for analytics models used by financial analysts, auditors, or regulators.
sentiment
analysis enables evaluation of text (e.g., annual report or e-mails) for distributions of words that may be classified as positive or negative outcomes or to look for potential bias.
ratio
analysis is a tool used to evaluate relationships among different financial statement items to assess the financial health of a business.
FS
analysis is used by investors, analysts, auditors, and other interested stakeholders to review and evaluate a company's financial statements and financial performance.
descriptive
analytics are useful for sorting and summarizing data to create a baseline or point of reference for more advanced analytics.
key performance indicators
are a specific type of performance metrics used to measure performance at a company.
additional analyses
are available in specialized audit tools and are constantly being developed by auditors as they discover new and interesting patterns in data.
sparklines
are small graphic trendlines that efficiently summarizes numbers or statistics in a graph without axes in a single spreadsheet cell.
diagnostic
compares variables or data items to each other, look for patterns of interest, further than basic summary statistics. Ex. Commonalities between customer demographic and EE data- look for possible correlations more sophisticated
FS
are tagged manually at the end of the period. In the future, XBRL-GL may be applied to individual transactions to facilitate real-time reporting. Problems with real-time reporting- errors, material error could cause investor to be too optimistic, difficult to audit information before it gets published
digital dashboard
is an interactive report showing the most important metrics to help users understand how a company or an organization is performing.
liquidity
is the ability to satisfy the company's short-term obligations (e.g., current and acid-test)
prescriptive
make recommendation based on past data. Prescribe a solution or course of action. More judgement involved. Based on what we think is going to happen
summary statistics
mean, median, min, max, count, sum
z score
outlier detection
applied
statistics include additional mixed distributions and nontraditional statistics may also provide insight to the auditor
random sampling
is useful for manual evaluation of source documents.
exact & fuzzy matching
joins tables and identifies plausible relationships
reasonable assurance
level of certainty auditors gain, not absolute, the FS are free of material misstatement, high degree of confidence but can't guarantee Can look at entire population instead of only a sample, can cover more ground in less time, greater confidence, more through, higher quality audit
A
Which approach to Data Analytics attempts to assign each unit in a population into a small set of classes where the unit belongs? A. Classification B. Regression C. Similarity matching D. co occurrence grouping
C
Which approach to Data Analytics attempts to identify similar individuals based on data known about them? A. Classification B. Regression C. Similarity matching D. Data reduction
A
What would you consider to be a Financial Performance KPIs? A. Total Shareholder Return B. Customer Profitability Score C. Market Growth Rate D. Klout Score
aura
is used to direct the audit by identifying which evidence to collect and analyze
procedures
Ex. Revenue recognition risky area, additional ______________ identify the data or the location
A
__________ data would be considered the most sophisticated type of data. A. Ratio B. Interval C. Ordinal D. Nominal
B
__________ is a discriminating classifier that is defined by a separating hyperplane that works first to find the widest margin (or biggest pipe) and then works to find the middle line. A. Linear classifier B. Support vector machines C. Decision trees D. Multiple regression
auditor judgement
______________ __________________-becomes even more important to make sense of the results the technology has given us
analytics
______________ aids different types of audits:1. Process efficiency and effectiveness.2. Governance, risk, and compliance, including internal controls effectiveness.3. Information technology and information systems audits.4. Forensic audits in the case of fraud.5. Support for the financial statement audit.
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
What would you consider to be a Marketing KPIs? A. Conversion Rate B. Six Sigma Level C. Employee Churn Rate D. Time to Market
exception
When a continuous auditing rule is violated, an _______________occurs which generates an alarm.
drill down
explores the details behind the values
continuous reporting
___________ _____________ provides the status of the audit procedures and output of the information systems
general ledger
____________ ______________ - chart of accounts and GL detail
procure to pay subledger
_____________ ______ _________ ______________- purchases and payments to suppliers
walgreens
low profit margin, high asset turnover
data warehouse
central repository of integrated data from multiple systems, one placed where all the data is stored
b
a digital dashboard would be part of which step in the IMPACT cycle? a. addressing and refining results b. track outcomes c. identify the question d. master the data
b
an attempt to estimate or predict, for each unit, the numerical value of some variable using some statistical model would be called the ____________ approach a. classification b. regression c. similarity matching d. clustering
stratification
groups data by categories
profit margin
For every dollar of sales how profitable are they
base
___________ - master data and formats field name, data formats
C
Which attribute is required to exist in each table of a relational database and serves as the "unique identifier" for each record in a table? A. Foreign key B. Unique identifier C. Primary key D. Key attribute
c
what process involves the technologies, systems, practices, methodologies, databases, statistics, and applications used to analyze diverse business data to give orgs the info they need to make decisions A. business process analytics b. systems analysis and design c. data analytics d. big data
a, b, c
when determining the data scale, which of the following decisions is relevant a. will the data be skewed b. are their outliers c. what is the context d. what color should i use
data dictionary
when obtaining the data yourself, one of the best tools to use to identify the tables that you could use would be a
evaluation
_______________ may in some instances be distilled into risk scores and alerts. Risk profile Pay more attention to riskier transactions
procedures
__________________-to evaluate areas of high risk are identified during the planning phase
C
The determinants for sample size include all of the following except: A. Confidence level. B. Tolerable misstatement. C. Potential risk of account. D. Estimated misstatement.
uncertain
(e.g., anticipate, depend)
constraining
(e.g., commit, impair)
positive
(e.g., enable, achieve)
negative
(e.g., loss, adverse)
litigious
(e.g., mediate, petition)
modal
(e.g., possible, likely)
solvency
(or financing) ratios help assess a company's ability to pay its debts and stay in business (e.g., debt-to-equity)
profit margin
(revenues- cost of revenues)/ revenues
test
-What would a __________of vendor numbers or EE numbers show? -What would a test of invoice or check numbers show? -Benford's analysis not helpful in this case -Sytematically assigned numbers
B
By the year 2020, about 1.7 megabytes of new information be created every: A. Week. B. Second. C. Minute. D. Day.
B
Gold, silver and bronze medals would be examples of A. Nominal data. B. Ordinal data. C. Structured data. D. Test data.
4
The Balanced Scorecard has _________ components.
relational database
a UML class diagram is used to support and design a _____________________
risk
Internal and external auditors apply Data Analytics to evaluate __________. For example, they may evaluate inventory turnover to identify obsolete inventory, calculate working capital to evaluate liquidity.
ERP Systems
Business processes- inventory, accounting, HR, CRM integrates into one system Streamline business processes and improved system that makes communication more efficient Can make better decisions faster Common shared database Information that multiple departments need to look at- inconsistent info in in multiple systems everyone has access to same data to make decisions
extent
indicates how much we can test
data warehouses
Data is pulled from ERP systems and stored in___________ __________________ for analysis.
internal process
time spent per EE on different activities
sustainability
Carbon Footprint Water Footprint Energy Consumption Saving Levels Due to Conservation and Improvement Efforts Supply Chain Miles Waste Reduction Rate Waste Recycling Rate Product Recycling Rate
classification
Why would a bankruptcy prediction be considered classification? And why would it be useful to auditors? Useful because it says if its high or low risk- have to assess going concern Bankrupt/ not bankrupt
C
Data that are organized and reside in a fixed field with a record or a file. Such data are generally contained in a relational database or spreadsheet and are readily searchable by search algorithms. The term matching this definition is: A. Training data. B. Unstructured data. C. Structured data. D. Test data.
what if analysis
decision support systems
nature
represents why we perform audit procedures.
operating leverage
sales/ avg. total assets- how efficiently are you using your resources, higher is more efficient
homogenous
If all divisions and subsidiaries using same installation of ERP system
return on equity
The DuPont ratio measures components of
financial leverage
total assets/ total equity
total asset turnover
Revenue/ assets
perform the test plan
Common data analytics procedures can be found in computer-assisted auditing techniques (CAATS)
balanced scorecard
Comprehensive framework that helps organizations track not only financial information but also other important factors to help managers make important decisions
dupont ratio
Popular method to analyze performance
AICPAs audit data standards
In either case, firm data may require a translation engine to map fields to a common data model, such as the __________________________
B
What does KPI stand for? A. Key performance index B. Key performance indicator C. Key paired index D. Key paired indicator
interval
with _________ data the number zero is just another value on the scale and has no special meaning
age analysis
determines the likelihood of payment.
analysts
can track sentiment proportion over time and analyze other text sources (e.g., news articles, social media) to realize gains in the market.
D
According to the text, which of these are not helpful in refining a dashboard? A. Which metric are you using most frequently to help you make decisions? B. Are you downloading the data to do any additional analysis after working with the dashboard, and if so, can the dashboard be improved to save those extra steps? C. Are there any metrics that you do not use? If so, why aren't they helpful? D. Which data are the easiest to access or least costly to collect?
xbrl
Analysis of ___________ data can be difficult because different companies may use different tags. For example to show total revenue, IBM uses the Revenues tag and Apple uses SalesRevenueNet.
kpis
Any calculation or number used to measure performance at a company Metrics management believes are most critical depends on industry; key to influencing decision making Metrics that influence decision making rate of hospitalization, number of beds _________ to boost your GPA Number of hours of studying, number of times visiting tutor or office hours
identify the problem
Are you trying to identify phantom employees or vendors? Are you trying to collect evidence that you are complying with specific regulations? Are you trying to test account balances to tie them to the financial statements?
tagging
As of June 2011, the SEC requires _______________ of: NUMBERS AND DATES •Balance sheet •Income statement •Statement of comprehensive income •Statement of cash flows •Statement of stockholders' equity TEXT BLOCKS, INCLUDING NUMBERS AND DATES •Footnotes •Management discussion and analysis (MD&A)
address & refine results
As you refine your models, customize the dashboard for different users. Consider these questions: Which metric are you using most frequently to help you make decisions? Are there any metrics that you do not use? If so, why aren't they helpful? Are you downloading the data to do any additional analysis after working with the dashboard, and if so, can the dashboard be improved to save those extra steps? Are there any metrics that should be available on the dashboard to help you with decision making?
enhanced assurance
Assurance services are crucial to building trust. Increasing global regulation means auditors must provide __________ _______________ which increases audit coverage and efficiency.
nature, timing & extent
Audit Data Analytics can help to improve the___________, ___________, and _______________ of audit procedures...
true, false
Auditors evaluate exceptions to determine whether the event is problematic (____________ positive) or normal (______________ positive).
full population
Before, an auditor may have looked at samples and gathered evidence to make inferences......now analytics allow ____________ _____________ testing and deep insight into processes and controls.
xbrl
Benefits: all agreeing thing tag is a good representation of x Common language, everyone using the same definition Easier to regulate different industries More reliable & accurate information
checks & references
Consistent guidance and standardization from the audit firm or chief audit executive, such as __________ ________ ______________, enable consistent and quality work.
monitoring
Continuous_______________ enables continuous reporting
continuously
Data Analytics and audit automation allows auditors to ________________- monitor systems and processes.
working papers
Data Analytics-related ____________ _________________ should include audit procedures, IT documentation and flowcharts, database maps, parameters and variables, and data extracts and evidence.
address & refine results
Different models will produce different results, for example: - High risk transactions - Users with conflicting roles - Exceptions to standard procedure Auditors would evaluate the evidence and collaborate with management to resolve the issues. Segregation of duties- who has too much access
tagged
Each data element is ______________ to identify what they are (e.g., cash) and context (e.g., US dollars, 2014Q4) in an instance document.
communicate insights & track outcomes
Ensuring that all of the appropriate stakeholders continue to be involved in using the dashboard and continually improving it is key to the success of the dashboard.
prescriptive
Example Audit Procedure: Analysis determines procedures to follow when new accounts are opened for inactive customers, such as requiring approval.
predictive
Examples of ______________ analytics regression classification probability sentiment analysis
descriptive
Examples of _______________ analytics: age analysis sorting summary statistics sampling example of audit procedure
diagnostic
Examples of ________________analytics: Z-score Benford's law Drill-down Clustering Exact and fuzzy matching Sequence check Stratification
heterogeneous
Firm data in _______________ ERP systems requires a systems translation engine and mapping and is usually the result of acquisitions
homogeneous
Firm data stored in _____________ ERP systems is easier to work with because the location of key data is known.
BS
For example, this element represents the cash and cash equivalents balance on the ___________ _____________ at the end of quarter 4 of 2014. It would be rounded to the thousand of US dollars.
customer
Net Promoter Score (NPS) Customer Retention Rate Customer Satisfaction Index Customer Profitability Score Customer Lifetime Value Customer Turnover Rate Customer Engagement Customer Complaints
generalized audit software
Many of these approaches can be automated with _________________ _________ _______________, including Excel and IDEA
marketing
Market Growth Rate Market Share Brand Equity Cost per Lead Conversion Rate Search Engine Rankings Click-Through Rate Page Views Online Engagement Level Online Share of Voice Social Networking Footprint Klout Score
descriptive
Mean, median, standard deviation, create a baseline for more advanced analytics. Incentive plan that gives bonus every time accounts are open- count number of customers, sort data to show top performing Ees
D
On a Balanced Scorecard, which is not included as a component? A. Financial Performance B. Customer/Stakeholder C. Internal Process D. Employee Capacity
C
On a Balanced Scorecard, which is not included as a component? A. Financial Performance B. Customer/Stakeholder C. Order Process D. Organizational Capacity
proportion
One study shows that the higher the ______________ of negative words in 10-K disclosure, the lower the returns. The solid line shows a financial dictionary, and the dashed line shows a normal English dictionary with negative word classifications.
communicate insights
Results may appear in an audit dashboard and may be included in audit evidence.
sparklines
Sparklines are useful for creating simple dashboards or summarizing large sheet of numbers.
B
The DuPont analysis of return on equity (ROE) includes all but the following component ratios: A. Asset turnover. B. Inventory turnover. C. Financial leverage. D. Profit margin.
audit data standards
The __________ ____________ ______________ identify common tables and fields needed for audit analytics.
scope
The _______________ defines the parameters and limits placed on the audit, such as how much and for how long. What is the size of your sample Defines the period, level of materiality, whether or not you can filter out certain transactions
parameters
The audit ________________ are set to balance the amount of false positive exceptions and limit the amount of false negatives
master the data
The audit data standards provide a general overview of the basic data auditors will evaluate, including notable tables and fields. Ideal set of standards they are voluntary
C
The most important KPIs should be placed in the ________________ corner of the page even if we are not following a strategy map template. A. Bottom right B. Bottom left C. Top left D. Top right
standardized audit plan
The_____________ ______________ ____________ identifies the methodology, scope, risk, procedures, and evaluation performed by the auditors.
homogeneous
What are the advantages of the use of ______________ systems? Would a merger target be more attractive if it used a similar financial reporting system as the potential parent company? look at AR adjustments when looking at ending balance, standard terms, tables, and fields, consider AR
A
What computerized technique would be used to perform sentiment analysis on an annual accounting report? A. Text mining B. Sentiment mining C. Textual analysis D. Decision trees
perform the test plan
Use a data visualization tool to implement the relationships and ratios in a digital dashboard. Build out the objectives, measures, targets, and initiatives. Use dashboard templates as needed.
documentation
Use of Data Analytics is one way to improve _______________ and the output of analytic tools can be included in working papers along with other evidence and procedures.
AICPAs audit data standards
Way to standardize info, defines common tables and fields recommended for audit analytics to perform common audit tasks, all may call things differently, make it easier to facilitate info for auditors to perform testing and analytical procedures Voluntary system
sequence check
detects gaps in records and duplicates entries
prof skepticism
having an attitude with a questioning mind, If a client tells you something you verify it yourself , look for evidence, do you see controls in place, critical assessment of the audit evidence- bank confirmation who was it sent to, in what form?
financial
how the company generates value
Balanced Scorecard
identifies the most important metrics to measure and target goals for comparison.
benfords law
identifies transactions or users with nontypical activity based on the distribution of first digits
z scores
identify outliers by calculating standard distance from the mean. assigns a value to a number based on number of std dev from the mean Example of diagnostic analytics 2.5- 2 and a half standard dev away from the mean 98% of values fall in 3 standard dev from the mean
d
the firm practice of monitoring competitors, customers, and suppliers to better understand its opportunities and threats is called _________________ a. big data b. IT c. data analytics d. business intelligence
B
the forbes insight/kmpg 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 A. results B. accuracy C. focus
probability
uses a rank score to evaluate the strength of classification
b
A company has two divisions, one in the United States and the other in China. One uses Oracle and the other uses SAP for its basic accounting system. What would we call this? A. Homogeneous systems B. Heterogeneous systems C. Dual data warehouse systems D. Dual lingo accounting systems
d
All of the following may serve as standards for the audit methodology except: A. PCAOB's auditing standards B. COSO's ERM framework C. ISACA's COBIT framework D. FASB's accounting standards
C
As mentioned in the chapter, which of the following is not a common way that data will need to be cleaned after extraction and validation? A. Remove headings and subtotals. B. Format negative numbers. C. Clean up trailing zeroes. D. Correct inconsistencies across data.
c
Asking questions like "are our customers paying us in a timely manner" is the first step in which of the following processes? A. business intelligence B. systems analysis and design C. IMPACT cycle D. data analytics
B
Big Data is often described by the three V's, or A. Volume, velocity, and variability. B. Volume, velocity, and variety. C. Volume, volatility, and variability D.Variability, velocity, and variety.
B
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? A. Computer-aided audit techniques B. Computer-assisted audit techniques C. Computerized audit and accounting techniques D. Computerized audit aids and tests
D
Exhibit 4-8 gives chart suggestions for what data you'd like to portray. Those options include all but the following: A. Relationship. B. Comparison. C. Distribution. D. Normalization.
A
In general, the more complex the model, the greater the chance of A. Overfitting the data. B. Underfitting the data. C. Pruning the data. D. The need to reduce the amount of data considered.
C
In the late 1960s, Ed Altman developed a model to predict if a company was at severe risk of going bankrupt. He called his statistic, Altman's Z-score, now a widely used score in finance. Based on the name of the statistic, which statistical distribution would you guess this came from? A. Normal distribution B. Poisson distribution C. Standardized normal distribution D. Uniform distribution
B
Justin Zobel suggests that revising your writing requires you to "be egoless—ready to dislike anything you have previously written," suggesting that it is __________ you need to please: A. Yourself B. The reader C. The customer D. Your boss
B
Line charts are not recommended for what type of data? A. Normalized data B. Qualitative data C. Continuous data D. Trend lines
C
Mastering the data can also be described via the ETL process. The ETL process stands for: A. Extract, total, and load data. B. Enter, transform, and load data. C. Extract, transform, and load data. D. Enter, total, and load data.
c
Under the guidance of the chief audit executive (CAE) or another manager, these individuals build teams to develop and implement analytical techniques to aid all of the following audits except: A. Process efficiency and effectiveness. B. Governance, risk, and compliance, including internal controls effectiveness. C. Tax compliance. D. Support for the financial statement audit.
1, 4, 2, 3
SQL can extract data from 2 related tables. place the following lines of SQL code in order to create a query that would retrieve all the data from the sales _subset and the customer tables 1. SELECT &* 2. INNER JOIN sales_subset 3. ON Customer. customerID= sales subset.customer id 4. FROM customer
false
T or F: a data dictionary will be more robust and will have more attributes to keep track of for a stored data set stored as a flat file
D
The goal of the ETL process is to A. Identify which approach to data analytics should be used. B. Load the data into a relational database for storage. C. Communicate the results and insights found through the analysis. D. Identify and obtain the data needed for solving the problem.
A
The Fahrenheit scale of temperature measurement would best be described as an example of: A. Interval data. B. Discrete data. C. Nominal data. D. Continuous data.
B
The IMPACT cycle includes all but the following process: A. Communicate insights. B. Data preparation. C. Address and refine results. D. Perform test plan.
A
The IMPACT cycle includes all but the following process: A. Visualize the data. B. Identify the questions. C. Master the data. D. Track outcomes.
G
The advantages of storing data in a relational database include which of the following: Option A - Help in enforcing business rules. Option B - Increased information redundancy. Option C - Integrating business processes. A. Option A B. Option B C. Option C D. All of these options are advantages of a relational database. E. Only Option A and Option B. F. Only Option B and Option C. G. Only Option A and Option C.
B
The metadata that describes each attribute in a database is which of the following? A. Composite primary key B. Data dictionary C. Descriptive attributes D. Flat file
C
The observation that the frequency of leading digits in many real-life sets of numerical data is called: A. Leading digits hypothesis. B. Moore's law. C. Benford's law. D. Clustering.
A
The purpose of transforming data is: A. To validate the data for completeness and integrity. B. To load the data into the appropriate tool for analysis. C. To obtain the data from the appropriate source. D. To identify which data are necessary to complete the analysis.
B
What are attributes that exist in a relational database that are neither primary nor foreign keys? A. Nondescript attributes B. Descriptive attributes C.Composite key D. Relational table attributes
C
What describes finding correspondences between at least two types of text or entries that may not match perfectly? A. Incomplete linkages B. Algorithmic matching C. Fuzzy matching D. Incomplete matching
A
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? A. 10,000 B. 1,000 C. 100,000 D. Cannot be determined
d
When there is an alarm in a continuous audit, but it is associated with a normal event, we would call that a: A. False negative. B. True negative. C. True positive. D. False positive.
a
When there is no alarm in a continuous audit, but there is an abnormal event, we would call that a: A. False negative. B. True negative. C. True positive. D. False positive.
C
Which approach to Data Analytics attempts to predict relationship between two data items? A. Profiling B. Classification C. Link prediction D. Regression
declarative
a ___________ visualization is used to present findings to an audience
d
audit firms are increasingly considering operational data such as manufacturing logs, CRM data, and supply chain data primarily to ____________ a. evaluate a company's ability to continue as a going concern b. evaluate goodwill impairment c. find material misstatements d. help companies refine processes
a
data analytics may use what source to assess the probability of a goodwill write down, warranty claims or the collectibility of bad debts a. customer receipts b. social media c. business intelligence d. utility bills
A
data analytics may use what source to assess the probability of a goodwill write-down , warranty claims, or collectibility of bad debts? a. social media b. business intelligence c. customer receipts d. utility bills
a
data sets that are too complex and too large for businesses' existing systems to handle are called A. big data b. voluminous c. data analytics
b
deciding whether to use declarative and exploratory visualizations fit in which phase of the IMPACT model? a. address and refine results b. communicate insights c. master the data d. identify the question
d
slicing and dicing the data, finding correlations, revising and rerunning the data analysis would could considered to be part of what stage of the IMPACT cycle a. communicate insights b. track outcomes c. identify the question d. address and refine results e. master the data
redundant
the four benefits of storing data in a relational database are completeness, no ___________ data, business rules are enforced, and communication and integration of business processes
a
which of the following is not one of the considerations for obtaining the data? a. identifying any risks that exist in data integrity and the mitigation plan b. determining if you have access to data yourself or if you need to request it c. determining which specific data are needed d. determining which financial or other related systems contains the data
a
which testing approach would be considered a way to divide individuals like customers into groups (or clusters) in a useful or meaningful way? a. clustering b. similarity matching c. regression d. link prediction
