acct 4307 - ch. 7

According to Benford's law, which one of these first digits have a higher probability of occurrence than the first digit 3?

2

According to Benford's law, what is the expectation for the percentage of times that the first digit of a number is a 9?

4.58%

According to Benford's Law, the number _______ will occur less frequently as a leading digit than the number eight.

9

When is Benford's law analysis not useful?

Assets only recorded above a certain threshold

_____ addresses the relative frequency of the first digit in a set of naturally occurring numbers.

Benford's Law

_____ looks for underlying patterns among variables in the data by examining the data at a more detailed level.

Drill-down analytics

_______ is used to help find vendors that might have a similar address as an employee.

Fuzzy matching

Where would the company likely get data comparing the salaries of female executives to the salaries of male executives?

Human resources system

In fuzzy matching, if an exact match (tolerance = 100%) is required, what is the likely consequence for finding potential matches?

Only exactly matches, no potential matches

What is an example of a cash reconciling item for an item recorded in the general ledger but not yet recorded in the bank statement?

Outstanding checks

Which of the following can potentially find gaps in the check numbers written?

Sequence check

Management accounting uses variance analysis to explain what and why something happened in the cost of producing products. It is done by comparing actual outcomes to expected, or standard, costs. What is the expectation when the price of raw materials unexpectedly increases?

Unfavorable price variance

If the ______ distribution of first digits is different from that expected from Benford's law, it may indicate the existence of fraud or errors.

actual

A drill-down, detailed analysis of the accounts receivable ______ would help assess the debt's ultimate collectability.

balances

Outstanding checks are checks recorded by the company, but not yet recorded by the ______.

bank

A ______ is the appropriate statistical test to compare the actual to expected distribution of first digits using Benford's law.

chi-square

Evaluating the relationship between sales and advertising expense would be an example of the diagnostic analytics of _______.

determining relations/patterns/linkages between variables through statistical analysis

An analysis of the most and least profitable customer is an example of drill-down analytics, a type of ______ analytics.

diagnostic

A t-statistic comparing the means between Nike and Reebok stock price returns that is greater than 2 suggests that there is a statistical _______ between the two stock price returns.

difference

An analysis of the most profitable products sold by a company is an example of _____.

drill-down analytics

Analysis of the most profitable customer is an example of ______.

drill-down analytics

The 2011 movie Moneyball is an example of _____ analytics applied to the sport of baseball.

drill-down, detailed

To test whether each transaction (e.g., cash receipt or cash disbursement) is independent of any other similar transaction, accountants employ tests for _____________ transactions.

duplicate

Unusual transactions may happen on weekends, holidays or at the _________ of the month or quarter.

end

Which cash reconciling item could potentially affect either the bank statement or the general ledger?

error

______ are sometimes made by the company or the bank and need to be corrected in a bank reconciliation.

errors

If a(n) ____________ match is used in fuzzy matching, many possible matches will likely be missed.

exact

There is a chance of an inappropriate relationship, including , ___________ between an accounts payable clerk and the vendors they pay.

fraud

When there is a violation of internal controls, most auditors will attribute that to either error or _______.

fraud

_______ matching is a technique used to find potential equivalents when there is less than an exact match.

fuzzy

A company could use its ______ system for data to test the difference between the salaries of workers in the United States and the workers in France.

human resource management

A _______ is a supposition or a proposed relationship.

hypothesis

Computing and evaluating price and quantity variances would be an example of the diagnostic analytics of _______.

identifying anomalies/outliers

A firm generally spends money on advertising with the expectation that sales will _____.

increase

_______ accountants perform variance analysis to identify and explain the difference between a budgeted amount (or standard costs) and actual performance.

management

A hypothesis stating that the stock returns of Apple are not different than the stock returns of Google (Alphabet) is an example of a(n) ______ hypothesis.

null

Analysis of the customer that owes the most would be an example of the diagnostic analytics of _______.

performing drill-down detailed analytics

Segregation of duties suggests separating the tasks of custody, authorization and ________.

recordkeeping

An analysis of the relationship between advertising expenses and sales revenue is performed using a _________ analysis.

regression

The appropriate test to see if independent variables are related to a dependent variable is called a(n) _______.

regression

A _________ check may be used to assess if a key number field in a record is in the correct ascending or descending order.

sequence

The ____ fallacy suggests that commitments to past investments made escalates and makes it harder to abandon prior investments.

sunk cost

A _____ would likely be used to assess the difference in sales returns during holiday and non-holiday months.

t-test

An analysis of the most and least profitable customer will help the company determine whom to _______ in subsequent sales offerings.

target

Internal controls _________ is used to assess unusual accounting activity that might give rise to errors or fraud.

testing

True or false: An analysis of the customers who owe the most may give us a better idea of the debt's ultimate collectability. True false question.

true

True or false: Sequence checks might be performed on check numbers, deposit numbers, cash receipts and cash disbursements.

true

True or false: The expectation is that each transaction (e.g., cash receipt or cash disbursement) is independent of any other similar transaction.

true

A _______ -sample t-test might be used to assess the difference between the salaries of workers in the United States and the workers in Mexico.

two

The appropriate test to compare one sample to another sample to see if one is greater than another in some way is called a(n) _______.

two-sample t-test of a difference in means

A ________ is the amount that actual amounts differ from what was budgeted.

variance

There is a chance of _______ providing kickback schemes or side payments to an accounts payable clerk.

vendors