Deck 6: Audit Data Analytics

Question 1

Sequence checks are useful for finding gaps,such as a missing check in the cash disbursements journal,or duplicate transactions,such as duplicate payments to vendors.

Answer 1

True

Question 2

Once an auditor has a basic understanding of the data,they can then perform diagnostic analytics which look for differences or patterns of interest in the data.

Answer 2

False

Question 3

An auditor will perform predictive analytics before diagnostic analytics.

Answer 3

False

Question 4

A customer account ID identifies the customer from whom payment is expected or to whom unused credits have been applied.

Question 5

A business unit code is used to identify the business unit,region,and branch at the level that financial statements are being reconciled.

Question 6

Classification in auditing is typically focused on risk assessment.

Question 7

Sorting in descending order shows the smallest number values first.Sorting in ascending order shows the largest values first.

Question 8

A sales order ID is a unique identifier for each purchase order.

Question 9

Audit Data Standards (ADS)were developed by the SEC.

Question 10

Regression allows an auditor to predict a specific dependent value based on independent variable inputs.

Question 11

The auditor may select a sample of the accounts to verify that they were closed and the documentation exists.

Question 12

Summary statistics provide insight into the relative size of a number compared with the population.

Question 13

Benford's Law predicts the distribution of first digits.

Question 14

Sampling is useful when you have manual audit procedures,such as testing transaction details or evaluating source documents.

Question 15

Artificial intelligence is designed around the idea that computers can learn about action or behavior from the past and predict the course of action for the present.

Question 16

Monetary unit sampling allows auditors to mitigate risk.

Question 17

Prescriptive analytics identifies a course of action for the auditor to take based on the actions taken in similar situations in the past.

Question 18

A fuzzy match is based on the similarity of the values.

Question 19

Exact matching is a way in which auditors join database tables with a foreign key from one table to the secondary key of another.

Question 20

Descriptive analytics summarizes activity or masters data elements based on certain attributes.

Question 21

Which type of audit analytics might be used to detect correlations and patterns of interest?

A) Prescriptive analytics
B) Predictive analytics
C) Diagnostic analytics
D) Descriptive analytics

Question 22

Which of the following is an example of predictive analytics?

A) Classification
B) Z-score
C) Decision support systems
D) Diagnostic

Question 23

Exploring the details behind the values is referred to as ________ and is an example of ________ analytics.

A) sorting; diagnostic
B) sorting; descriptive
C) drill-down; diagnostic
D) drill-down; descriptive

Question 24

Detecting gaps in records and duplicate entries is referred to as ________ and is an example of ________ analytics.

A) sequence check; diagnostic
B) sequence check; descriptive
C) fuzzy matching; diagnostic
D) fuzzy matching; descriptive

Question 25

________ assigns a value to a number based on how many standard deviations it stands from the mean and is an example of ________ analytics.

A) A Z-score; diagnostic
B) A Z-score; descriptive
C) Benford's Law; diagnostic
D) Benford's Law; descriptive

Question 26

Which of the following is not an example of predictive analytics?

A) Classification
B) Regression
C) Probability
D) Artificial intelligence

Question 27

Identifying the largest or smallest values is referred to as ________ and is an example of ________ analytics.

A) sorting; diagnostic
B) sorting; descriptive
C) summary statistics; diagnostic
D) summary statistics; descriptive

Question 28

Which of the following is not an example of descriptive analytics?

A) Drill-down
B) Age analysis
C) Sampling
D) Sorting

Question 29

________ allows auditors to evaluate account balances and is an example of ________ analytics.

A) Monetary unit sampling; diagnostic
B) Monetary unit sampling; descriptive
C) Random sampling; diagnostic
D) Random sampling; descriptive

Question 30

Which type of audit analytics might be used to identify common attributes or patterns that may be used to identify similar activity?

A) Prescriptive analytics
B) Predictive analytics
C) Diagnostic analytics
D) Descriptive analytics

Question 31

When working with CAATs,which of the following statements is false?

A) Inner join will show only the records from both tables that match and exclude everything that doesn't match.
B) Left join will show all records from the first table and only records from the second table that match.
C) Right join will show all records from the second table and records from the first table that match.
D) Outer join will show all records, including only matching ones.

Question 32

________ identifies transactions or users with atypical activity based on the distribution of first digits and is an example of ________ analytics.

A) Monetary unit sampling; diagnostic
B) Monetary unit sampling; descriptive
C) Benford's Law; diagnostic
D) Benford's Law; descriptive

Question 33

Grouping balances by date is referred to as ________ and is an example of ________ analytics.

A) age analysis; diagnostic
B) age analysis; descriptive
C) sorting; diagnostic
D) sorting; descriptive

Question 34

Which type of audit analytics might be used to recommend action based on previously observed actions?

A) Prescriptive analytics
B) Predictive analytics
C) Diagnostic analytics
D) Descriptive analytics

Question 35

Grouping records by non-obvious similarities is referred to as ________ and is an example of ________ analytics.

A) clustering; diagnostic
B) clustering; predictive
C) classification; diagnostic
D) classification; predictive

Question 36

Which of the following statements is false?

A) Predictive analytics attempts to find hidden patterns or variables.
B) Regression allows an auditor to predict a specific dependent value based on independent variable inputs.
C) Classification in auditing is mainly focused on risk assessment.
D) Monetary unit sampling is more likely to pull accounts with small balances.

Question 37

Which type of audit analytics might be used to summarize activity or master data based on certain attributes?

A) Prescriptive analytics
B) Predictive analytics
C) Diagnostic analytics
D) Descriptive analytics

Question 38

Which of the following is an example of descriptive analytics?

A) Summary statistics
B) Z-score
C) Similarity matching
D) Fuzzy matching

Question 39

Which of the following is the best choice for the unique identifier for each sales order?

A) Item#
B) Shipping#
C) Purchase_Order#
D) Sales_Order#

Question 40

Which of the following statements is true?

A) Monetary unit sampling is more likely to pull accounts with small balances.
B) Monetary unit sampling allows auditors to evaluate account balances.
C) Prescriptive analytics attempts to find hidden patterns or variables.
D) Predictive analytics uses machine learning and artificial intelligence.

Question 41

Which of the following is an example of a decision support system?

A) IDEA
B) MS Excel
C) TurboTax
D) TeamMate Analytics

Question 42

Unaware of data analysis tools available,a sales person frequently processes lunch reimbursements without a receipt between $9.50 − $9.98,which is just below the amount requiring a receipt of $10.An analysis using which of the following would likely (and quickly)identify the salesperson's possible fraudulent behavior.

A) Leading digits hypothesis
B) Moore's law
C) Benford's law
D) Clustering

Question 43

Predicting specific dependent values based on independent variable inputs is referred to as ________ and is an example of ________ analytics.

A) regression; prescriptive
B) regression; predictive
C) classification; prescriptive
D) classification; predictive

Question 44

Which testing approach is useful in determining procedures to follow when new credit accounts are opened?

A) Applied statistics
B) Regression
C) Fuzzy matching
D) Classification

Question 45

Using a rank score to evaluate the strength of classification is referred to as ________ and is an example of ________ analytics.

A) regression; prescriptive
B) regression; predictive
C) probability; prescriptive
D) probability; predictive

Question 46

Which of the following z-scores is likely an outlier that warrants further scrutiny?

A) −2.1
B) 0.0
C) 1.75
D) 3.2

Question 47

Evaluating the tone of text to forecast an outcome is referred to as ________ and is an example of ________ analytics.

A) classification; prescriptive
B) classification; predictive
C) sentiment analysis; prescriptive
D) sentiment analysis; predictive

Question 48

Large training sets are needed to generate relatively accurate models when using which type of approach?

A) Descriptive
B) Regression
C) Classification
D) Diagnostic

Question 49

Using observations of past actions to predict future actions for similar events is referred to as ________ and is an example of ________ analytics.

A) artificial intelligence; prescriptive
B) artificial intelligence; predictive
C) applied statistics; prescriptive
D) applied statistics; predictive

Question 50

Benford's Law states that:

A) common tables and fields are needed by auditors to perform common audit tasks.
B) analytics must be used to look for correlations or patterns of interest in the data.
C) the number of transistors in a dense integrated circuit doubles approximately every two years.
D) in naturally occurring collections of numbers, the leading significant digit is likely to be small.