Question 1

Which of the following best describes a dependent variable?
A) Output
B) Input
C) Application
D) Operation

Accepted Answer

A dependent variable is a variable whose value depends on the value of another variable, known as the independent variable. In this context, output is the most appropriate choice as it is the result or outcome that is dependent on the input or independent variable.

Question 2

Understanding and predicting warranty expense is an important determination for manufacturing firms.When using historical claims data to estimate the current period's warranty expense,the historical claims data represents which of the following?
A) Independent variable
B) Dependent variable
C) Function
D) Statistical Model

Accepted Answer

The historical claims data is used as the independent variable because it is the input or predictor that is used to estimate or predict the warranty expense, which would be the dependent variable in this context.

Question 3

Chapter 3 discussed 5 (five)data analytics approaches or techniques are most common to address our accounting questions.List and define 3 of the 5 data analytics approaches.Next,describe how each of the 3 data analytics approaches you list could be used by credit card companies to identify fraudulent credit card activity.

Accepted Answer

The answer of Chapter 3 discussed 5 (five)data analytics approaches...

Question 4

Understanding and predicting inventory obsolescence is an important determination for retail companies.When using competitor selling prices to estimate the inventory obsolescence reserve,the inventory obsolescence reserve represents which of the following?
A) Independent variable
B) Dependent variable
C) Function
D) Statistical Model

Accepted Answer

The inventory obsolescence reserve is the dependent variable because it is being estimated based on the competitor selling prices, which are the independent variables.

Question 5

Assume that you will be up for a promotion next month and you'd like to impress your boss with your data analytic skills.The company you work for normally books the current month's bad debit for the same amount as the prior month's actual accounts receivable write-offs.Using your general accounting knowledge,explain why this process is not the best method.Next,assuming that you will use a regression analysis,explain the process and describe the data/information you would request/include to perform the analysis.

Accepted Answer

The answer of Assume that you will be up for...

Question 6

________ states that in many naturally occurring collections of numbers,the leading significant digit is likely to be small.
A) Leading digits hypothesis
B) Moore's law
C) Benford's law
D) Classification

Accepted Answer

Benford's law states that in many naturally occurring collections of numbers, the leading significant digit is likely to be small. It is used to detect fraud and errors in financial and accounting data. The other options (A, B, D) are not related to this concept.

Question 7

________ is existing data that has been manually evaluated and assigned a class and ________ is existing data used to evaluate the model.
A) Test data; Training data
B) Training data; Test data
C) Structured data; Unstructured data
D) Unstructured data; Structured data

Accepted Answer

Training data is existing data that is manually evaluated and assigned a class, while test data is existing data used to evaluate the model. Therefore, the best choice is B, where training data represents the existing data that has been manually evaluated and test data represents the existing data used to evaluate the model.

Question 8

Benford's Law (be sure to answer all 3 parts):
Part A: Briefly describe Benford's Law.
Part B: Draw a graph that exemplifies data which conforms to Benford's Law (i.e.,what it should look like).
Part C: Briefly describe how auditors could utilize Benford's Law while conducting testwork.

Accepted Answer

The answer of Benford's Law (be sure to answer all...

Question 9

Decision trees are used to divide data into smaller groups by splitting the data at each branch into two or more groups.However,this method could lead to unintended consequences if the decision tree is not pruned.Describe the pruning process,when it can occur and the benefits of using it.

Accepted Answer

The answer of Decision trees are used to divide data...

Question 10

What is the difference between structured data and unstructured data? Provide an example of each.

Accepted Answer

The answer of What is the difference between structured data...

Question 11

Retail stores often request customers' zip codes at the end of a sales transaction.This is an example of which data approach?
A) Clustering
B) Regression
C) Similarity matching
D) Classification

Accepted Answer

The answer of Retail stores often request customers' zip codes...

Question 12

________ mark the split between one class and another.
A) Decision trees
B) Identifying questions
C) Decision boundaries
D) Linear classifiers

Accepted Answer

Decision boundaries are lines or surfaces that separate one class from another. They mark the split between one class and another in a classification problem. Option A (decision trees) is a method for decision-making, but it does not directly relate to class separation. Option B (identifying questions) is broad and does not specifically relate to classification. Option D (linear classifiers) is a possible option, but not as accurate as decision boundaries because not all data can be separated linearly.

Question 13

One of the key tasks of bank auditors is to consider the amount of the loan loss reserve.When developing a model to estimate the current year's loan loss reserve amount,which of the following would be least likely to be included as an independent variable?
A) Original loan approval amount
B) Customer loan history
C) Current aged loans
D) Collections success

Accepted Answer

The original loan approval amount is a static variable and does not provide any indication of the current risk level of the loan portfolio. The other independent variables are more relevant to estimating the current year's loan loss reserve amount, as they provide information on the historical performance and current status of the loans.

Question 14

Unaware of data analysis tools available to the internal auditors,a store employee frequently processes cash returns without a receipt for $99,which is just below the amount requiring manager approval of $100.An analysis using which of the following would likely (and quickly)identify the employee's fraudulent behavior?
A) Leading digits hypothesis
B) Moore's law
C) Benford's law
D) Clustering

Accepted Answer

Benford's law is a statistical tool used to identify if the data set is fraudulent or not. It examines if the occurrence of first digits in a dataset follows a uniform distribution or not. In this case, the employee frequently processes cash returns just below the manager's approval limit, which may result in a particular pattern in the data. Benford's law can be used to identify such fraudulent behavior quickly.

Question 15

The short surveys regarding dining preferences requested at the bottom of the restaurant bill are an example of which data approach?
A) Clustering
B) Regression
C) Similarity matching
D) Link prediction

Accepted Answer

The answer of The short surveys regarding dining preferences requested...

Quiz 3: Modeling and Evaluation: Going From Defining Business Problems and Data Understanding to Analyzing Data and Answering Questions

Which of the following best describes a dependent variable?

Understanding and predicting warranty expense is an important determination for manufacturing firms.When using historical claims data to estimate the current period's warranty expense,the historical claims data represents which of the following?

Understanding and predicting inventory obsolescence is an important determination for retail companies.When using competitor selling prices to estimate the inventory obsolescence reserve,the inventory obsolescence reserve represents which of the following?

________ states that in many naturally occurring collections of numbers,the leading significant digit is likely to be small.

is existing data that has been manually evaluated and assigned a class and is existing data used to evaluate the model.

Benford's Law (be sure to answer all 3 parts): Part A: Briefly describe Benford's Law. Part B: Draw a graph that exemplifies data which conforms to Benford's Law (i.e.,what it should look like). Part C: Briefly describe how auditors could utilize Benford's Law while conducting testwork.

Decision trees are used to divide data into smaller groups by splitting the data at each branch into two or more groups.However,this method could lead to unintended consequences if the decision tree is not pruned.Describe the pruning process,when it can occur and the benefits of using it.

What is the difference between structured data and unstructured data? Provide an example of each.

Retail stores often request customers' zip codes at the end of a sales transaction.This is an example of which data approach?

________ mark the split between one class and another.

One of the key tasks of bank auditors is to consider the amount of the loan loss reserve.When developing a model to estimate the current year's loan loss reserve amount,which of the following would be least likely to be included as an independent variable?

The short surveys regarding dining preferences requested at the bottom of the restaurant bill are an example of which data approach?