Deck 9: Data Analytics in Accounting

Question 1

Raw data often must be scrubbed to remove extraneous data and other noise in order to become useful. This technique is known as:
A. Process, Scrub, and Import.
B. Extract, Transform, and Load.
C. Evaluate, Depopulate, and Finalize.
D. Filter, Coordinate, and Upload.

Answer 1

Extract, Transform, and Load.

Question 2

Which of the following areas of financial reporting is most suitable for applying data analytics techniques?
A. Evaluation of estimates and valuations.
B. Variance reporting.
C. Calculating the components of equity.
D. Depreciation.

Answer 2

Evaluation of estimates and valuations.

Question 3

The Data Accountability and Trust Act of 2009 (DATA) is designed to standardize the format of files and fields typically used to support an external audit in given financial business processes.

Answer 3

False

Question 4

Which of the following best summarizes the two key limiting factors for business systems when dealing with Big Data?
A. Data storage capacity and processing power.
B. Data availability and software tools.
C. Database organization and transaction volume.
D. Analytic skills and software tools.

Question 5

The insight provided through data analytics can help companies in all of the following ways except:
A. Dictate the policies of external business partners.
B. Create more directed marketing campaigns.
C. Identify future opportunities and risks.
D. Affect internal business processes in order to improve productivity, utilization and growth.

Question 6

According to the results of the PWC's 18^th Annual Global CEO Survey, CEO's aren't yet ready to place a high value on data analytics.

Question 7

Which of the following is not one of the skill sets often associated with data analytics?
A. Mining and analyzing data.
B. Creating data structures and models.
C. Normalizing data structures.
D. Acquiring and cleansing data.

Question 8

Tableau can be differentiated from traditional analysis tools such as Excel because it is specifically designed to perform data analysis and visualization.

Question 9

Which of the following is the most likely application of data analytics for accountants to develop expertise in?
A. Directed marketing campaigns.
B. Scientific research.
C. Medical testing.
D. Domain knowledge of business functional areas.

Question 10

Data analytics can provide deep insight into financial data, but is not particularly useful when evaluating non-financial data such as social media.

Question 11

The process of scrubbing raw data to remove extraneous data and other noise in order to increase its usefulness is known as extract, transform and load.

Question 12

Data analytics is best described as the science of reducing extremely large datasets down to more manageable databases that can then be processed using traditional tools.

Question 13

Audit data standards (ADS) are standards for data files and fields typically needed to support an external audit in a given financial business process area.

Question 14

As described in the text, which of the following best defines the term data analytics?
A. The ability to analyze data and draw conclusions.
B. The science of reducing extremely large datasets down to more manageable databases that can be processed using traditional tools.
C. The process of creating meaningful visualizations from extremely large datasets.
D. The science of examining raw data, removing excess noise, and organizing it in order to draw conclusions for decision making.

Question 15

Which of the following is the best definition of the term big data?
A. Databases measured in terms of zettabytes.
B. Datasets that are too large and complex for businesses' existing systems utilizing traditional capabilities.
C. Databases for businesses that generate more than one million electronic transactions per month.
D. Datasets generated by social media applications such as Facebook, Twitter, Tencent QQ, and Instagram.

Question 16

Data analytics are likely to play a significant role in future audit activities.

Question 17

At its core, data analytics fits into the information value chain in which of the following ways?
A. The process of data analytics aims at transforming raw data into valuable information.
B. Data analytics aims to make an organization's conversion process more efficient.
C. Data analytics requires organizations to share synced data with upstream and downstream business partners.
D. The process of data analytics is geared toward providing additional insight into customer activities and preferences.

Question 18

Datasets that are too large and complex for businesses' existing systems utilizing traditional capabilities are refered to as big data.

Question 19

How does data analytics play a vital role in today's business world?
A. By allowing data to be organized into predefined tables and fields.
B. By defining three main categories of classes that help organize a company's data structure models.
C. By examining data to generate models for predictions of patterns and trends.
D. By capturing the ever-increasing transaction activity of large companies.

Question 20

Which of the following best desribes the skill sets used in data analytics?
A. Building data warehouses; Populating data structures; Mining the data.
B. Acquiring/cleansing data; Creating data structures/models; Mining/analyzing data.
C. Developing data structures/models; Acquiring storage capacity; Analyzing the data.
D. Creating data; Building data structures; Piloting data studies.

Question 21

Which of the following would not by itself be considered personally identifying information?
A. Date of birth.
B. Social Security Number.
C. Passport number.
D. Driver's Licence ID.

Question 22

Which of the following is a set of standards created by the AICPA for data files and fields in order to support external audits?
A. Extract, Transform & Load (ETL).
B. Online Analytical Processing (OLAP).
C. Audit Control Language (ACL).
D. Audit Data Standards (ADS).

Question 23

The Data Accountability and Trust Act of 2009 (DATA) requires data owners to notify which of the following when a data breach has been discovered?
A. The Federal Bureau of Investigation (FBI).
B. The Securities and Exchange Commission (SEC).
C. The Federal Trade Commission (FTC).
D. The National Security Agency (NSA).

Question 24

Which of the following best describes the AICPA's Audit Data Standards (ADS)?
A. The base level of testing procedures that should be performed on AIS data.
B. A set of analytic procedures designed to be used with modern ERPs' large datasets.
C. A set of standards for data files and fields designed to support external audits.
D. The codification of all auditing guidelines pertaining to the data generated by AISs.

Question 25

Which of the following is not a good example of how accountants might use data analytics to help evaluate estimates used to value financial statement accounts?
A. Assess the likelihood and level of expected warranty claims.
B. Estimate the collectibility of accounts receivable balances.
C. Automate the order entry process for online customers.
D. Assess property, plant & equipment values based on current comparable prices.

Question 26

The definition of personally identifying information is important to companies because it helps identify the types of information that need to be protected. It is also important for which of the following reasons?
A. It helps identify the associations between data elements required to develop an application's class model.
B. It helps identify elements that can be stripped out of datasets in order to reduce data protection requirements.
C. It helps identify potential data anomalies.
D. It eliminates the need for companies to protect other types of information.

Question 27

Which of the following best describes how external auditors' interactions with their clients is likely to change due to the use of data analytics in the audit process?
A. External auditors will spend less time on audits and will not need to spend time with clients outside the audit.
B. External auditors will spend more time on detailed audit tasks, resulting in longer audit engagements.
C. External auditors will only interact with their clients virtually.
D. External auditors will stay engaged with clients beyond the audit.

Question 28

Which of the following best describes what is meant by a breach of security?
A. Breaking into a locked room.
B. An unencrypted data transmission.
C. The unauthorized access to or acquisition of data in an electronic format that contains personal information.
D. Access of personal information on a corporate server.

Question 29

Which of the following is not one of the Excel tools described as useful for data analytics?
A. Calculated Field.
B. Tableau.
C. Slicers.
D. Power Pivot.

Question 30

The use of data analytics will likely result in significant changes to clients' expectations of their auditors. Which of the following is most likely not one of those expected changes?
A. More innovative thinking.
B. More time spent gathering and testing data.
C. Deeper and broader insights.
D. Faster and more efficient delivery of audit findings.