Test Bank for Data and Analytics in Accounting, 1st Edition by Ann C. Dzuranin by Bobdocs

TEST BANK Data and Analytics in Accounting: An Integrated Approach 1st Edition by Ann Dzuranin, Guido Geerts and Margarita Lenk

TABLE OF CONTENTS: Chapter 1: Data and Analytics in the Accounting Profession Chapter 2: Foundational Data Analysis Skills Chapter 3: Motivations and Objectives for Data Analysis Chapter 4: Planning Data and Analysis Strategies Chapter 5: Analysis: Data Preparation Chapter 6: Analysis: Information Modeling Chapter 7: Analysis: Data Exploration Chapter 8: Interpreting Data Analysis Results Chapter 9: Communicating Data Analysis Results Chapter 10: Recent Data and Analyses Developments in Accounting

Data and Analytics in Accounting, 1st Edition Dzuranin Chapter 1 Data and Analytics in the Accounting Profession 1) One key feature of self-service business intelligence (SSBI) software is that A) it is easy to use. B) it costs less to implement. C) it connects to multiple data sources. D) it provides dashboarding capabilities. Answer: A Explanation: There are two key features of SSBI software: it provides extended data processing capabilities for preparing data, analyzing data, and reporting data analysis results; and it is easy to use. Diff: 1 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) Alteryx is an example of SSBI software that can A) replace Excel since it can provide more complex functions. B) replace a database since it can store transactional data. C) replace the data warehouse. D) be used to clean data by removing null values or removing leading or trailing spaces. Answer: D Explanation: There are two key features of SSBI software: it provides extended data processing capabilities for preparing data, analyzing data, and reporting data analysis results; and it is easy to use. Diff: 1 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

3) How has data analytics changed the audit profession? A) The cost of audit engagements has increased due to the growing data volume that needs to be validated. B) The cost of audit engagements has decreased since the data that is received from clients are more trustworthy. C) An auditor can now analyze the entire population of audit-relevant data for exceptions or outliers. D) There is a greater assurance that financial statements do not have material misstatement since the data is more timely and complete. Answer: C Explanation: Self-service business intelligence tools has empowered accountants to use data and analytics to provide value-added services to their clients and employers. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 4) Data analytics is A) the process of analyzing raw data to answer questions or provide insights. B) the process of storing relevant raw data so that data can be analyzed. C) the process of cleaning data so that data can be more trustworthy. D) the process of using machine learning and predictive modeling. Answer: A Explanation: Data analytics is the process of analyzing raw data to answer questions or provide insights. Diff: 1 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 5) Robotic process automation (RPA) software is being used to A) build artificial intelligence models to eliminate manual audit tasks. B) analyze auditing data and performing substantive tests. C) audit sample-based testing so that auditors can focus on analysis and provide valuable insights. D) automate manual tasks so that auditors can focus on more strategic tasks. Answer: D Explanation: RPA can be used to perform routine financial accounting functions such as recording journal entries, creating trial balances, doing preliminary account analyses, and creating financial statements to let accountants spend more time analyzing data for insights. Diff: 1 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic 2

AICPA: FC: Measurement, Analysis, and Interpretation 6) Robotic process automation (RPA)software can be used by financial accountants A) to perform routine financial accounting functions such as recording journal entries and creating trial balances. B) to perform non-routine financial accounting functions such as analyzing potential mergers and acquisitions. C) to perform routine financial accounting functions such as determining revenue recognition on complex construction projects. D) to make predictions within financial capital markets. Answer: A Explanation: RPA can be used to perform routine financial accounting functions such as recording journal entries, creating trial balances, doing preliminary account analyses, and creating financial statements to let accountants spend more time analyzing data for insights. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 7) Robotic process automation (RPA) software can be used by management accountants A) to create automatic financial performance reports for department managers. B) to evaluate return on investments on capital projects. C) to evaluate strategic sourcing opportunities with vendors. D) to identify the cost drivers for activity-based costing models. Answer: A Explanation: RPA can be used to perform routine financial accounting functions such as recording journal entries, creating trial balances, doing preliminary account analyses, and creating financial statements to let accountants spend more time analyzing data for insights. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 8) Robotic process automation software (RPA) can be used by tax accountants A) to analyze potential saving opportunities for the client. B) to extract data from the client's financial statements and automatically populate the data into the tax preparation software. C) to assess the client's residency for tax purposes. D) to respond to IRS inquiries. Answer: B Explanation: RPA can be used to perform routine financial accounting functions such as recording journal entries, creating trial balances, doing preliminary account analyses, and creating financial statements to let accountants spend more time analyzing data for insights. Diff: 2 3

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LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 9) With SSBI software, management accountants can use data to A) automate non-routine tasks. B) identify and manage risks. C) store transactional data in a central repository. D) None of the answer choices are correct. Answer: B Explanation: With SSBI software, management accountants can more easily use data to help: identify and manage risks; improve budgeting and forecasting by incorporating more data; automate internal reporting; identify operational improvements; and create dashboards of key performance indicators (KPI). Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 10) The stages in the data analysis process are A) Analyze, Report, and Reflection. B) Strategize, Plan, and Analyze. C) Plan, Analyze, and Report D) Plan, Report, and Reflection. Answer: C Explanation: The data analysis process is comprised of three equally important stages: Plan, Analyze, and Report. Diff: 1 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 11) In the Planning stage of the data analysis process, the Planning stage involves A) identifying the problem, selecting the data sources, and creating an implementation plan. B) selecting the data, evaluating alternatives, and creating a strategy to perform the analysis. C) identifying the motivation, determining the objective, and creating a strategy to perform the analysis. D) exploring the data, preparing the data, and building information models. Answer: C Explanation: Planning includes identifying the motivation for the analysis, determining the objective and questions to answer, and devising a strategy to perform the analysis. Diff: 1 4

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LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 12) In a data analysis process, motivation A) is the reason the analysis is being performed or why we are doing the analysis. B) is the project's goals. C) is the desired outcome of the analysis. D) is the objective of the analysis. Answer: A Explanation: Motivation is the reason the analysis is being performed. Diff: 1 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 13) You are a management accountant within the finance department. An example of an external motivation in a data analysis project is A) when your manager asks you to analyze variances between budgeted and actual values for the last fiscal year. B) an analysis of vendor performance so that strategic vendors can be selected to improve the supply chain. C) an analysis of accounts receivables to determine allowance of doubtful accounts. D) when the marketing department requests for an analysis of sales projections for all sales channels. Answer: D Explanation: External motivation: The project originates from a request or requirement by another party, such as external stakeholders like investors, creditors, supply chain partners, industry regulators, or government agencies. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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14) You are an internal auditor within the internal auditing department. An example of an internal motivation in a data analysis project is A) when your manager asks you to analyze the compliance of segregation of duties for cash deposits. B) when the external auditor requests an analysis of inventory balances at all warehouse locations. C) when the creditor requests a report on the cash flow activity through the year. D) when the marketing department requests for an analysis of sales projections for all sales channels. Answer: A Explanation: Internal motivation is when the project is motivated by a desire to better serve a client, better understand phenomena to gain business intelligence, or perform job responsibilities. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 15) In a data analysis process, the objective A) is why we are doing the analysis. B) is the project's goals. C) is the desired outcome of the analysis. D) is the reason the analysis is being performed. Answer: B Explanation: The objective is the goal of the project. To identify the objective, form specific questions to guide the analysis. Diff: 1 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

16) When designing a strategy within a data analysis process, the two parts of strategy are to A) determine what data is necessary to answer questions and decide the type of analysis is appropriate. B) determine what data is necessary to generate the desired outcome and decide what type of analysis is appropriate. C) determine what data is necessary to answer questions and decide which stakeholders should be involved in the analysis. D) determine what data is reliable for the analysis and decide which stakeholders should be involved in the analysis. Answer: A Explanation: There are two aspects to strategy–a data strategy and an analysis strategy. Diff: 2 LO: 1-2 Bloom: C 6

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Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 17) A descriptive analysis A) assesses what is happening currently and in the past. B) identifies a problem to understand why an outcome occurred. C) predicts what might happen in the future. D) helps determine what should happen to meet goals or objectives. Answer: A Explanation: Descriptive analytics are used to understand what is currently happening or has happened in the past. Diff: 2 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 18) A diagnostic analysis A) assesses what is happening currently and in the past. B) identifies a problem to understand why an outcome occurred. C) predicts what might happen in the future. D) helps determine what should happen to meet goals or objectives. Answer: B Explanation: Diagnostic analytics help reveal why something has happened. Diff: 2 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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19) A predictive analysis A) assesses what is happening currently and in the past. B) identifies a problem to understand why an outcome occurred. C) forecasts what might happen in the future. D) helps determine what should happen to meet goals or objectives. Answer: C Explanation: Predictive analytics help predict what might happen in the future. Diff: 2 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 20) A prescriptive analysis A) assesses what is happening currently and in the past. B) identifies a problem to understand why an outcome occurred. C) predicts what might happen in the future. D) helps determine what should happen to meet goals or objectives. Answer: D Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 21) Bridgeport Tax is a tax accounting firm. The firm focuses on personal tax of high-net worth individuals. A descriptive analysis would answer which question? A) How are investment accounts trending over the year? B) Which investments caused the highest taxable gains? C) What tax liabilities are projected for next year given the projected tax rate increase? D) What needs to happen to reduce tax liabilities for future years? Answer: A Explanation: Descriptive analytics are used to understand what is currently happening or has happened in the past. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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22) Bridgeport Tax is a tax accounting firm. The firm focuses on personal tax of high-net worth individuals. A diagnostic analysis would answer which question? A) How are investment accounts trending over the year? B) Which investments caused the highest taxable gains? C) What tax liabilities are projected for next year given the projected tax rate increase? D) What needs to happen to reduce tax liabilities for future years? Answer: B Explanation: Diagnostic analytics help reveal why something has happened. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 23) Vermont Mountain Creamery produces three types of organic ice cream: maple walnut, bourbon cherry, and hazelnut chocolate. A predictive analysis would answer which question? A) What are the historic sales trends for each type of ice cream? B) What is causing the profitability to decline within the bourbon cherry line? C) If the company created the new product, dark chocolate espresso, what would be the projected profitability of this new product line? D) What is the optimal mix of production output to maximize profit? Answer: C Explanation: Predictive analytics help predict what might happen in the future. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 24) Vermont Mountain Creamery produces three types of organic ice cream: maple walnut, bourbon cherry, and hazelnut chocolate. A prescriptive analysis would answer which question? A) What are the historic sales trends for each type of ice cream? B) What is causing the profitability to decline within the bourbon cherry line? C) If the company created the new product, dark chocolate espresso, what would be the projected profitability of this new product line? D) What is the optimal mix of production output to maximize profit? Answer: D Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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25) Smart Hawk develops video conferencing equipment. Demand for their products have been increasing due to COVID-19 pandemic work environments. A descriptive analysis would answer which question? A) What is the count of products that were sold in the last quarter? B) Are there any spikes in sales during the fiscal year? C) Is there a correlation between products sold and variances in pricing? D) To increase profitability by 15%, what price should be charged for each unit? Answer: A Explanation: Descriptive analytics are used to understand what is currently happening or has happened in the past. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 26) Smart Hawk develops video conferencing equipment. Demand for their products have been increasing due to COVID-19 pandemic work environments. A prescriptive analysis would answer which question? A) What is the count of products that were sold in the last quarter? B) Are there any spikes in sales during the fiscal year? C) Is there a correlation between products sold and variances in pricing? D) To increase profitability by 15%, what price should be charged for each unit? Answer: D Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 27) Bicycle Coffee Shop is a local chain of coffee shops. With increased competition, they are analyzing the financial impacts of closing an existing location. A diagnostic analysis would answer which question? A) What is the total net revenue for the fiscal year for the location slated to be closed? B) Are sales trending downwards for the location slated to be closed? C) If the location is closed, what is the forecasted net income for the Bicycle Coffee shop? D) What sales revenue is needed for the location to be financially sustainable? Answer: B Explanation: Diagnostic analytics help reveal why something has happened. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 10

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28) Bicycle Coffee Shop is a local chain of coffee shops. With increased competition, they are analyzing the financial impacts of closing an existing location. A prescriptive analysis would answer which question? A) What is the total net revenue for the fiscal year for the location slated to be closed? B) Are sales trending downwards for the location slated to be closed? C) If the location is closed, what is the forecasted net income for the Bicycle Coffee shop? D) What sales revenue is needed for the location to be financially sustainable? Answer: B Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 29) During the Prepare Data stage of a data analysis project, an example of Extracting within the ETL process is A) downloading the comma separated values (CSV) file from the ERP system. B) restructuring the data prior to using it for analysis. C) removing trailing blank spaces in text fields prior to importing it into an analysis software. D) merging two data sources into a single data repository. Answer: A Explanation: Extracting is the process by which data are retrieved from a source. This could be downloading an Excel file or extracting data from a database or a data warehouse. Diff: 1 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 30) During the Prepare Data stage of a data analysis project, an example of Transforming within ETL is A) downloading the Excel file from the ERP system. B) converting sales dollar values from Euro to US dollar prior to using the data for analysis. C) integrating the data into the data analysis software. D) merging two data sources into a single data repository. Answer: B Explanation: Transforming the data occurs when data are cleaned, restructured, and/or integrated with other data prior to using it for analysis. Diff: 1 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 11

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31) During the Prepare Data stage of a data analysis project, an example of Loading within ETL is A) downloading the Excel file from the ERP system. B) filtering out null values prior to using the data for analysis. C) cleaning the data prior to importing it into the analysis software. D) executing nightly batch jobs which copies data from the ERP system to the data warehouse. Answer: D Explanation: Loading is the process of importing transformed data into the software used to perform analyses. Diff: 1 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 32) An example of an information model is A) calculating the breakeven point in sales dollars. B) creating a regression analysis. C) creating one dataset from multiple data sources. D) designing a database to track sales orders. Answer: A Explanation: Information modeling is the creation of the information needed for analysis purposes, starting from the data collected. Examples of information models from accounting concepts are calculations such as net income, profit margin, total assets, or even breakeven point in sales dollars. Diff: 1 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 33) The Analyze stage of the data analysis process involves A) preparing the data, building information models, and exploring the data. B) building information models, exploring the data, and interpreting the results. C) exploring the data and interpreting the results. D) preparing the data, building information models, and selecting the data sources. Answer: A Explanation: The Analyze stage of the data analysis process involves preparing the data, building information models, and exploring the data. Diff: 1 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 34) The Report stage of the data analysis process involves 12

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A) exploring the data, interpreting the results, and communicating the results. B) exploring the data, formulating insights, and communicating the results. C) validating results, formulating insights, and communicating the results. D) interpreting the results and communicating the results. Answer: D Explanation: The Report stage includes interpreting the results to be sure the results address the objective of the analysis and make sense; and communicating the results by choosing the best presentation and method of communication. Diff: 1 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 35) You are a data analyst, and the CFO has asked you to analyze the payroll data to inform decisions on next year's payroll budget. You follow the Analyze stage of the data analysis process. Your activities include A) creating a strategy on what data needs to be used for the analysis; extracting payroll data from the ERP system; and cleaning the data to remove employees that were not employees throughoutthe full year. B) identifying the stakeholders involved in the analysis; extracting payroll data from the ERP system and filtering for only active employees; and summarizing results and reviewing the analysis for accuracy. C) calculating total payments for each year for each employee; removing any data anomalies in the data; and communicating results to the CFO. D) extracting the payroll data from the ERP system; calculating total payments for each year for each employee; and exploring the data for payments that are lower or higher than expected. Answer: D Explanation: The Analyze stage of the data analysis process involves preparing the data, building information models, and exploring the data. Diff: 3 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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36) You are a data analyst, and the CFO has asked you to analyze the payroll data so that variances can be shown between actual and budgeted values. You follow the Plan stage of the data analysis process. Your activities include A) determining the purpose of performing a variance analysis; identifying the project goals; and determining what data sources need to be used in the analysis. B) determining the motivation and objective of the analysis; creating a strategy to analyze the data; and preparing the data for upload into the analysis tools. C) identifying if the project goal is to determine if actuals were higher than budgeted values; determining what data sources need to be used in the analysis; and extracting the payroll data from the ERP system. D) determining the motivation and objective of the analysis; extracting the payroll data from the ERP system; and preparing the data for upload into the analysis tools. Answer: A Explanation: The Plan stage include determining the motivation and objective, and defining the strategy. Diff: 3 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 37) You are a data analyst, and the CFO has asked you to analyze the payroll data to inform decisions on next year's payroll budget. You follow the Reporting stage of the data analysis process. Your activities include A) exploring payroll data for any trends; reviewing the results to ensure that they make sense; and preparing a memo to the CFO to communicate the results. B) reviewing the results to make sure they are accurate and confirming that the results help inform decisions on next year's payroll budget; and creating a dashboard to show the results and preparing a presentation for the CFO. C) calculating total payments for the years for each employee; reviewing analyses to be sure that the data can answer the questions being asked; and creating a dashboard to showcase the results. D) extracting the payroll data from the ERP system; exploring the data for any trends; and writing a memo to the CFO to communicate the results. Answer: B Explanation: The Report stage includes interpreting the results to be sure the results address the objective of the analysis and make sense; and communicating the results by choosing the best presentation and method of communication. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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38) A data analytics mindset is A) the habit of adhering to accounting principles during the planning, analysis, and interpretation of data results before making and communicating a professional choice or decision. B) the habit of using professional judgement during the planning, analysis, and interpretation of data results before making and communicating a professional choice or decision. C) the professional habit of using critical thinking during the planning, analysis, and interpretation of data results before making and communicating a professional choice or decision. D) the habit of applying best practices during the planning, analysis, and interpretation of data results before making and communicating a professional choice or decision. Answer: C Explanation: A data analytics mindset is the professional habit of critically thinking through the planning, analysis, and interpretation of data results before communicating a professional choice or decision. Diff: 2 LO: 1-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 39) Accountants with critical thinking skills will A) use professional judgement to investigate, understand, and evaluate an event, opportunity, or an issue. B) use best practices to investigate, understand, and evaluate an event, opportunity, or an issue. C) use disciplined reasoning to investigate, understand, and evaluate an event, opportunity, or an issue. D) seek expert advice to investigate, understand, and evaluate an event, opportunity, or an issue. Answer: C Explanation: Critical thinking is disciplined reasoning used to investigate, understand, and evaluate an event, opportunity, or an issue. Diff: 2 LO: 1-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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40) Data literacy is best described as the A) ability to read, write and communicate data, including an understanding of data sources and analytical methods. B) ability to understand and analyze data using a variety of analytical techniques. C) ability to effectively communicate data results to stakeholders D) ability to apply analytical methods to explore insights. Answer: A Explanation: Data literacy is the ability to read, write, and communicate data in context. Diff: 1 LO: 1-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 41) Technological agility is A) being competent in the latest technological developments. B) being able to quickly adopt and adapt to the latest technological developments. C) the ability to take advantage of technological software and tools. D) being aware of the latest technological developments and being willing to try new technology. Answer: D Explanation: Technological agility is a mindset of being aware of the latest technological developments and being willing to try new things. Diff: 1 LO: 1-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 42) More banks have been hit with ransomware attacks. You are a data analyst at Riverdale Trust, and senior management has requested data analysis of cyber-attack trends. The stakeholders in this analysis from highest to lowest are A) senior management, customers, and chief information officer. B) chief information officer, senior management, and customers. C) customers, chief information officer, and senior management. D) senior management, chief information officer, and customers. Answer: D Explanation: Senior management is the highest since they need to be aware of financial risks. Customers are the lowest compared to other internal stakeholders since they need to take action first. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 43) Lynx Scooters manufactures electric scooters. You are a cost accountant and need to use data 16

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analytics to evaluate product costing. The stakeholders in this analysis from highest to lowest are A) financial controller, production manager, production staff, suppliers. B) financial controller, production manager, investors, customers. C) customers, investors, controller, production manager. D) investors, controller, customer, production manager. Answer: B Explanation: The financial controller is the highest since they oversee product costing. Customers are the lowest compared to other internal stakeholders since they need to take action first. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 44) You are a tax accountant who prepares corporate tax returns. An example of an internal stakeholder and an external stakeholder are A) tax clients and the Securities and Exchange Commission (SEC), respectively. B) partners of the tax firm and competing tax firms, respectively. C) partners of the tax firm and tax regulators, respectively. D) tax clients and investors of the tax clients, respectively. Answer: C Explanation: Internal stakeholders are individuals or groups involved in a businesses' operations. For example, your chief information officer will be a stakeholder since they would be the most interested in the results. External stakeholders are individuals or groups outside the company. For example, your tax client is an external stakeholder since the privacy of their financial information is at risk. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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45) You are an internal auditor at BTE Food Services. You are using auditing data analytics to test segregation of duty controls. An example of an internal stakeholder and external stakeholders are A) internal audit manager and investors, respectively. B) internal audit committee and food service staff, respectively. C) internal audit manager and external auditors, respectively. D) internal audit committee and external auditors, respectively. Answer: A Explanation: Internal stakeholders are individuals or groups involved in a businesses' operations. For example, your chief information officer will be a stakeholder since they would be the most interested in the results. External stakeholders are individuals or groups outside the company. For example, your tax client is an external stakeholder since the privacy of their financial information is at risk. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 46) Choosing irrelevant data in an analysis is an example of A) bias risk. B) analysis risk. C) data risk. D) assumption risk. Answer: C Explanation: A data risk is choosing inappropriate data, or data is incomplete or incorrect. Diff: 1 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 47) Choosing to apply a data analysis method incorrectly is an example of A) bias risk. B) analysis risk. C) data risk. D) assumption risk. Answer: B Explanation: Analysis risk is choosing an inappropriate method of applying a data analysis method incorrectly. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 48) Mental shortcuts that can affect decisions are examples of 18

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A) bias risk. B) analysis risk. C) data risk. D) assumption risk. Answer: A Explanation: Bias risk is a mental shortcut that can affect decisions. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 49) In a data analysis, potential risks that can affect decisions can be classified into four areas. The risk areas are A) data, analyses, assumptions, and biases. B) financial, assumption, selection, and data. C) analysis, interpretation, selection, and financial. D) process, biases, selection, and data. Answer: A Explanation: The four risk areas are data, analyses, assumptions, and biases. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 50) You are an accountant for Radiant Roofs, a manufacturer of solar roofs. Some states are offering tax incentives for homeowners wanting to install solar roofs. Data analysis is required to determine how tax incentives will affect the company's sales. What additional knowledge areas will need to be obtained to successfully carry out this data analysis project? A) Climate change trends B) Solar power technology C) State tax laws D) Federal tax laws Answer: C Explanation: Knowledge of state laws is needed to calculate state tax liability for the client. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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51) You are an accountant for Mountain View Hospital. The hospital imports supplies and equipment from foreign vendors. You are looking to use a custom broker to handle the importing of goods. A data analysis is required to evaluate the cost benefit of using a customs broker. What additional knowledge areas will need to be obtained to successfully carry out this data analysis project? A) Knowledge of federal requirements governing imports and exports B) Financial Accounting Standards Board (FASB) C) Financial analysis of cash flow D) The hospital Industry Answer: A Explanation: Knowledge of federal requirements governing imports and exports is required to remove any incorrect assumptions in the analysis. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 52) The six elements of critical thinking to consider when performing data analytics are A) stakeholders, purpose, analysis, reflection, knowledge, and self-reflection. B) stakeholders, purpose, alternatives, risks, knowledge, and self-reflection. C) supports, purpose, analysis, risk, knowledge, support. D) plan, analyze, and report Answer: B Explanation: SPARKS is the acronym for stakeholders, purpose, alternatives, risks, knowledge, and self-reflection. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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53) Within the SPARKS framework, the self-reflection stage A) focuses your prior experience or apply this experience to future analyses for yourself not for your team. B) should be used to validate if the results of the analysis are correct. C) should be used to determine if the results answer that original question of the analysis. D) should be used to learn from the success, struggles or failures from prior experience or apply this experience to future analyses. Answer: D Explanation: Self-reflection is the final critical thinking element at the end of a data analysis project to determine and reflect on what worked well and what did not. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 54) Within the SPARKS framework, the purpose stage A) determines what additional knowledge is necessary to complete the analysis. B) identifies individuals or groups with an interest in the outcome of a data analysis project. C) identifies which questions to evaluate, what data is needed, which method to use, and how to best communicate the results. D) articulates specific questions to maintain focus on the data and analyses steps that will help us achieve objectives. Answer: D Explanation: The purpose stage articulates specific questions to maintain focus on the data and analyses steps that will help us achieve objectives. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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55) Within the SPARKS framework, the stakeholders stage A) determines if the results of the analysis answers the objectives of the stakeholders. B) identifies what additional knowledge is necessary to obtain from the stakeholders. C) identifies individuals or groups with an interest in the outcome of a data analysis project. D) identifies what questions to evaluate, what data is needed, which method to use, and how to best communicate the results to the stakeholders. Answer: C Explanation: Stakeholders are those individuals or groups with an interest in the outcome of a data analysis project. Diff: 1 LO: 1-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 56) You are a financial accountant at Valleyview Hospital. You would like to analyze how changing the inventory method from FIFO method to the weighted-average method will affect the balance sheet. What would be the motivation and the objective for the data analysis? A) The motivation is to determine if changing the inventory method affects the hospital profits. The objective is to determine the inventory value using the FIFO method and the weighted-average method. B) The motivation is to determine how using the two inventory costing methods will affect the balance sheet. The objective is to calculate the inventory balance for each inventory costing method. C) The motivation is to determine if using the weighted-average method is a better reflection of inventory values. The objective is to calculate the inventory balance for each inventory costing method. D) The motivation is to understand how using the two inventory costing methods will affect the balance sheet. The objective is to calculate which inventory method generates a lower inventory balance. Answer: B Explanation: Motivation is the reason the analysis is performed. The objective is the goal of the project. Diff: 3 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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57) During the COVID-19 pandemic, the inflation rate increased dramatically. Businesses experienced increases in their expenses. You are an accountant, and you are using data analysis to look at how inflation is going to affect next year's budget. The objective of the data analysis is to A) look at cost-saving opportunities for next year. B) have a realistic budget that accounts for cost increases. C) minimize expenses for next year. D) determine financial metrics for next year. Answer: B Explanation: The objective is the goal of the project. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 58) You are an internal auditor looking at fraud related to vendor payment. You look at possible approaches for analyzing the data such as analyzing vendor addresses that match payroll addresses, vendors with similar vendor names, or duplicated vendor payments. What is the data analysis stage and MOSIAC step of this activity? A) The data analysis stage is Plan and the MOSIAC step is Strategy. B) The data analysis stage is Analyze and the MOSIAC step is Analysis-Build Information Models. C) The data analysis stage is Plan and the MOSIAC step is Analysis-Build Information Models. D) The data analysis stage is Analyze and the MOSIAC step is Analysis-Prepare the Data. Answer: A Explanation: Strategy is in the Plan stage. There are two aspects to strategy–a data strategy and an analysis strategy. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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59) New tax legislations are looking to include cryptocurrency taxation. You are a tax accountant, and you are using data analytics to determine how these changes will affect your current corporate clients and how additional reporting of cryptocurrency will impact staffing resources at the firm. What is the data analysis stage and the MOSIAC step of this activity? A) The data analysis stage is Plan and the MOSIAC step is Motivation. B) The data analysis stage is Plan and the MOSIAC step is Strategy. C) The data analysis stage is Analyze and the MOSIAC step is Analysis-Prepare the Data. D) The data analysis stage is Analyze and the MOSIAC step is Stakeholders. Answer: A Explanation: Motivation is in the Plan stage. Motivation is the reason the analysis is performed. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 60) Circuit Town is a reseller of consumer electronic products. Sales have been increasing; however, sales returns and allowances have also been increasing. A data analysis is needed to investigate if there are specific products causing sales returns and allowances to be high. The motivation of the data analysis is to A) identify opportunities for increasing sales. B) assess if the store's sales returns need to be revised. C) determine how sales and sales returns and allowances trends are affecting the company's profits. D) determine what's causing sales returns and allowances to increase. Answer: D Explanation: Motivation is the reason the analysis is performed. Diff: 2 LO: 1-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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25) Green Beanery is a wholesaler of organic coffee for independent coffee shops. A visualization was created to show sales values and operating profit by month. The visualization can be used to answer which diagnostic question?

A) Are there any months that have unusual sales? B) What sales value is required to obtain an operating profit margin of 30%? C) What is the expected operating profit for next year given this year's trends? D) What is the average operating profit for the year? Answer: A Explanation: Diagnostic analytics help reveal why something has happened. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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26) Green Beanery is a wholesaler of organic coffee for independent coffee shops. A visualization was created to show sales values and operating profit by month. The visualization can be used to answer which predictive question? A) Are there any identifiable trends in sales throughout the year? B) What sales value is required to obtain an operating profit margin of 30%? C) What is the expected operating profit for next year given this year's trends? D) Is there a correlation between sales and operating profit? Answer: C Explanation: Predictive analytics help predict what might happen in the future. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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63) Green Beanery is a wholesaler of organic coffee for independent coffee shops. A visualization was created to show sales values and operating profit by month. The visualization can be used to answer which prescriptive question?

A) Are there any identifiable trends in sales throughout the year? B) What sales value is required to obtain an operating profit margin of 25%? C) What is the expected operating profit for next year given this year's trends? D) Is there a correlation between sales and operating profit? Answer: B Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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64) Green Beanery is a wholesaler of organic coffee for independent coffee shops. A visualization was created to show sales values and operating profit by month. The visualization can be used to answer which descriptive question?

A) Are there any anomalies in sales during the year? B) What sales value is required to obtain an operating profit margin of 20%? C) Is there a correlation between sales and operating profit? D) What is the average operating profit for the year? Answer: D Explanation: Descriptive analytics are used to understand what is currently happening or has happened in the past. Diff: 2 LO: 1-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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65) Yoga Sanctuary is an online service offering customized yoga sessions. Its growth has been driven by social media. A data visualization has been created to show the count of social media mentions and the count of new subscribers. What is a predictive question that can be asked based on the results of this data analysis?

A) Based on the current trends, should we expect the number of subscribers to increase next year? B) What if the number of social media mentions doubled, how would it affect the number of new subscribers? C) What caused the number of social media mentions to increase in the fourth month? D) What is the average number of social media mentions? Answer: A Explanation: Predictive analytics help predict what might happen in the future. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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66) Yoga Sanctuary is an online service offering customized yoga sessions. Its growth has been driven by social media. A data visualization has been created to show the count of social media mentions and the count of new subscribers. What is a diagnostic question that can be asked based on the results of this data analysis?

A) What are the monthly average counts of social media mentions? B) What if the number of social media mentions doubled, how would it affect the number of new subscribers? C) What caused the number of new subscribers to increase in the fourth month? D) Is there a correlation between the number of social media mentions and the number of new subscribers? Answer: C Explanation: Diagnostic analytics help reveal why something has happened. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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67) You are an auditor and have completed analytical procedures for comparing your client's financial ratios with industry ratios. When communicating the findings to the client you need to be sure you are using the correct visualizations to help reduce the risk of someone misinterpreting the results. What is the data analysis stage and the MOSIAC step of this activity? A) The data analysis stage is Report and the MOSIAC step is Communicate. B) The data analysis stage is Report and the MOSIAC step is Interpret. C) The data analysis stage is Strategy and the MOSIAC step is Communicate. D) The data analysis stage is Strategy and the MOSIAC step is Interpret. Answer: A Explanation: Communicate is in the Report Stage. Communicate the results involves choosing the best presentation and method of communication. Diff: 2 LO: 1-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 68) Select all that apply. The key features of self-service business intelligence (SSBI) software are that A) it is easy to use. B) it provides extended data processing capabilities for preparing data, analyzing data, and reporting data analysis results. C) it connects to an online data source. D) it provides dashboarding capabilities. Answer: A, B Explanation: There are two key features of SSBI software: it provides extended data processing capabilities for preparing data, analyzing data, and reporting data analysis results; and it is easy to use. Diff: 1 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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69) Select all that apply. A dashboard is a graphical user interface that can A) show key performance indicators of financial ratios for a company. B) monitor performance against company goals. C) show information at a glance. D) identify historical trends and discover insights. Answer: A, B, C, D Explanation: A dashboard is a graphical user interface that shows key performance indicators for an organization. Diff: 2 LO: 1-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 70) Select all that apply. Management accountants can use SSBI software to A) create dashboards to track key performance. B) extract data from various sources for analyzing operational performance. C) store raw data in a central repository. D) automate internal reporting. Answer: A, B, D Explanation: With SSBI software, management accountants can more easily use data to help: identify and manage risks; improve budgeting and forecasting by incorporating more data; automate internal reporting; identify operational improvements; and create dashboards of key performance indicators (KPI). Diff: 1 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 71) Accountants can use which of the following in predictive analysis? Select all that apply. A) forecasting B) regression analysis C) time-series analysis D) historic trend analysis Answer: A, B, C Explanation: Forecasting, regression analysis, and time-series analysis are a few of the predictive analytics used in accounting. Diff: 3 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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72) To help understand data in descriptive analysis, which of the following can be used? Select all that apply. A) Count of record B) Average of measure C) Standard deviation D) Outlier detection Answer: A, B, C Explanation: Outlier detection is an example of diagnostic analytics. Diff: 1 LO: 1-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 73) Diagnostic analytics can use which of the following to help understand why something has happened? Select all that apply. A) Standard deviation B) Outlier detection C) Trend analysis D) Pattern recognition Answer: B, C, D Explanation: Standard deviation is an example of a descriptive analytics. Diff: 2 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 74) Accountants can use which of the following in prescriptive analysis? Select all that apply. A) What-if analysis B) Outlier detection C) Time-series analysis D) Trend analysis Answer: A Explanation: Prescriptive analytics include optimization and what-if analyses. Diff: 3 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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75) Select all that apply. When preparing data, Transforming of the ETL process can include A) Filtering, cleansing and removing duplicated data. B) Summarizing sales invoices by total value. C) Converting units of measurement such as kilogram to pounds. D) Merging multiple data sources into one database table. Answer: A, B, C Explanation: Transforming the data occurs when data are cleaned, restructured, and/or integrated with other data prior to using it for analysis. Diff: 1 LO: 1-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 76) Select all that apply. An example of an information model is A) calculation of gross profit margin by sales divisions. B) identification of correlations between supplier credit ratings and their accounts receivables. C) creation of what-if analysis such as what production mix is required to increase net income by 10%. D) calculation of the acid test ratios by fiscal quarters. Answer: A, D Explanation: Information modeling is the creation of the information needed for analysis purposes, starting from the data collected. Examples of information models from accounting concepts are calculations. Diff: 1 LO: 1-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 77) Select all that apply. Accountants with a data analytics mindset A) are inquisitive. B) ask "What?" when interpreting results. C) are open to learning new technologies. D) take the time to evaluate their own thinking. Answer: A, C, D Explanation: Individuals with a data analytics mindset are inquisitive. They always ask "why" when interpreting results, are open to learning new technologies, and take the time to evaluate their own thinking. Diff: 1 LO: 1-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 34

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78) Select all that apply. Communicating data analysis results involve A) writing clear and effective memos and reports. B) presenting results to a group of senior leaders. C) telling compelling data stories. D) documenting analysis steps. Answer: A, B, C Explanation: Communicating data analysis results requires specific skills: writing clear and effective memos and reports; preparing successful presentations; creating meaningful data visualizations; and telling compelling data stories. Diff: 1 LO: 1-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 79) Data analytics need to be applied to accounts receivables. What are the differences between descriptive analytics and diagnostic analytics? What are examples of descriptive analysis and diagnostic analysis in this scenario? Answer: Descriptive analytics helps us to better understand the data underlying the analysis that you are interpreting whereas diagnostic analytics helps us to understand why something has occurred. A descriptive analysis can look at the total accounts receivable value or the average accounts receivable turnover. A diagnostic analysis can look at anomalies in the accounts receivables such as abnormal high dollar amounts. Diff: 2 LO: 1-2 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 80) You are an accountant for a logistics company. What are the differences between predictive analytics and prescriptive analytics? Data analysis is needed to help determine if trucks should be leased or purchased. What are examples of predictive analysis and prescriptive analysis? Answer: Predictive analytics help predict what might happen in the future. Prescriptive analytics can tell us what we should do to meet a specific objective. Predictive analysis can be what is the projected total cash outflow if trucks are leased over 5 years. A prescriptive analysis can determine what price should be paid for trucks to achieve a return on investment of 15%. Diff: 2 LO: 1-2 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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81) Discuss the five elements of critical thinking in the SPARKS framework. Answer: Stakeholders — Parties impacted by the data analysis results. Purpose — The reason driving the questions for the analysis. Alternatives — Every choice should be the best option available. Risks — Consider all risks related to data, strategy, biases, and assumptions. Knowledge — Proper analysis strategy and interpretation of results often depends on accounting, economics, industry, statistics, and technology knowledge. Self-reflection — Reviewing each choice throughout the data analysis process (MOSAIC) reveals what worked best. Diff: 2 LO: 1-4 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 82) How has data analytics impacted the audit profession? List three impact areas. Answer: 1) Audits have expanded to include analyses of entire populations of audit-relevant data rather than use traditional sample-based testing. 2) Auditors can review entire data sets to identify all exceptions, anomalies, and outliers. 3) Data driven audits reduce the time that clients spend gathering and analyzing data in audit engagements. 4) Auditors need to have a data analytics mindset which is the professional habit of critical thinking through the planning, analysis, and interpretation of data results before making and communicating a professional choice or decision. Diff: 2 LO: 1-1 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 83) Define what is meant by a data analytics mindset. Identify the four data analytics skills that are part of the data analytics mindset. Answer: A data analytics mindset is the professional habit of critically thinking through the planning, analysis, and interpretation of data results before communicating a professional choice or decision. The four data analytics skills that are part of the data analytics mindset are critical thinking, data literacy, technological agility, and communication skills. Diff: 2 LO: 1-3 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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84) Identify and discuss two data analysis skills that are currently in demand by employers. Answer: 1. Critical Thinking: is disciplined reasoning used to investigate, understand, and evaluate an event, opportunity, or an issue. 2. Data Literacy: is the ability to understand and communicate data. Accounting graduates should be able to read, write, and communicate data in context. 3. Technology Agility: is a mindset of being aware of the latest technological developments and being willing to try new things. 4. Communication: accounting graduates must have strong written, oral, and visual communication skills so they can effectively communicate the results of data analyses. Diff: 2 LO: 1-3 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 85) You are a tax accountant, and you want to perform data analysis on capital gains on your client's investment accounts. What is the difference between data risk and analysis risk? Provide examples of data risk and analysis risk in this example. Answer: A data risk is choosing inappropriate data, or data is incomplete or incorrect. An analysis risk is choosing an inappropriate method of applying a data analysis method incorrectly. An example of data risk is only selecting capital gain data and not including capital loss data. An example of an analysis risk is using diagnostic analysis when descriptive analysis should be used. Diff: 2 LO: 1-4 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 86) Explain what is meant by a bias risk in a data analysis. Provide an example of how bias risk can affect a data analysis. What can help reduce bias risks? Answer: Bias risk is a mental shortcut that can affect decisions. Assumptions about the cause of sales increase can influence how the data is interpreted or presented. Increasing our knowledge in the subject matter (e.g., accounting area or industry) of data analysis will help reduce incorrect assumptions and biases. Diff: 2 LO: 1-4 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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87) Name and discuss the two types of stakeholders in a data analysis. Assume that you need to perform a data analysis on phishing attempts at your tax firm. For each type of stakeholder, provide an example of a stakeholder. Answer: Internal stakeholders are individuals or groups involved in a businesses' operations. For example, your chief information officer will be a stakeholder since they would be most interested in the results. External stakeholders are individuals or groups outside the company. For example, your tax client is an external stakeholder since the privacy of their financial information is at risk. Diff: 2 LO: 1-4 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 88) You are a new accounting graduate and have been hired to perform data analysis on how on-line advertising has impacted company sales. The company uses Google AdWords to track how many clicks are on the company's ads. During the data preparation stage, you need to perform the ETL process. Define what ETL represents. For each stage of the process, provide a data preparation example. Answer: ETL stands for extract, transform, and load. Extracting is the process by which data is retrieved from a source. For example, sales data can be extracted from the ERP system. Transforming the data occurs when data is cleaned, restructured, and/or integrated with other data prior to using it for analysis. For example, the data extract from Google AdWords can be integrated with sales data from the ERP system. Loading is the process of importing transformed data into the software used to perform analyses. For example, the combined data from sales and Google AdWords can be loaded into Tableau so that the data can be visualized and presented to stakeholders. Diff: 2 LO: 1-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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89) You are an accountant for All Worlds Records, an on-line music streaming service with worldwide operations. You need to perform data analysis on the company's financial performance. You can extract financial data from the accounting information system and build accounting information models with the data. Define accounting information models. Provide three examples of information models that can be applied to the financial data. Answer: Information modeling is the creation of the information needed for analysis purposes, starting from the data collected. Examples of information models for analyzing the financial performance: 1) calculation profit margin of each sales region so that each region can be compared, 2) calculation of total cash from all sales regions so that liquidity analysis can be done, and 3) calculation of total sales for each sales region to determine which region had the highest sales growth. Diff: 2 LO: 1-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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90) Electro Wheels is a manufacturer of electric scooters. You are a management accountant at the company and would like to do data analysis on manufacturing waste to reduce the overall product costs of the scooters. A data visualization has been created to show the number of manufacturing output and number of defective units by fiscal quarters. There are two manufacturing plants, and each plant has three manufacturing assembly lines. You extract data from the manufacturing module of the ERP system and need to explore the data. What is the goal of Exploring in the data analysis process? Provide three examples of how the data can be explored.

Answer: The core goal of data analysis is to explore data to identify patterns, trends, or unusual observations. Exploring data lets us discover, question, and investigate data relationships to successfully execute data analysis objectives. Three examples of how the data can be explored: 1. Calculate the defective units as a percentage of total manufacturing output units for each quarter to see which quarter had a higher rate of defective units. 2. Analyze manufacturing output and defective units counts by manufacturing assembly lines to see if there is an assembly line that has a staffing problem. 3. Analyze manufacturing output and defective units counts based on each manufacturing plant to see if there is a problem with machinery at a specific plant. Diff: 2 LO: 1-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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91) Brown's College is looking to modernize their payment process by using an optical character recognition (OCR) system to automate and digitalize their invoices. A data analysis is required to determine which invoice automation system on the market will provide the best return on investment. What is the difference between motivation and objective in a data analysis? Discuss motivation and objective for this data analysis example. Answer: Motivation is the reason the analysis is performed. The objective is the goal of the project. The motivation for the project is to determine the return on investment with each invoice automation system option. The objective is to determine which invoice automation system has the best return on investment. Diff: 2 LO: 1-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 92) Ridgeway Hospital is forming strategic partnerships with their suppliers to streamline their supply chain. A data analysis is required to review existing suppliers using various performance metrics. Discuss three stakeholders of this data analysis and explain why they are a stakeholder. Answer: The director of procurement is a stakeholder since they will need to take action on new strategic partnership contracts with the suppliers. Chief financial officers are stakeholders since they need to ensure that strategic partnerships have a positive impact on the financial performance. Suppliers are stakeholders since business with some suppliers will be lost due to the strategic realignment. Diff: 2 LO: 1-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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93) Panther Motor Company is a startup manufacturer of electric vehicles. Significant cash investment was needed for research and development and capital assets such as building and equipment. Data analysis was performed on cash flows. The results concluded that additional cash flow from financing activities will still be required over the next two years. The data analysis is complete, and you are now performing self-reflection. Define self-reflection in a data analysis. Discuss three benefits for doing self-reflection. Answer: Self-reflection is the final critical thinking element at the end of a data analysis project to determine and reflect on what worked well and what did not. Benefits: 1. The lessons learned can help improve future analyses. 2. You can track your performance by assessing your current skills. 3. You can track your knowledge in various subject domains or industries. 4. You can identify technical skills that should be acquired for future analyses. Diff: 2 LO: 1-4 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 94) Yellowstone Consulting is an IT consulting firm with offices across the country. A data analysis is required to review employee salaries. Base salaries are standardized but bonuses and cost of living adjustments vary and are also part of a consultant's overall compensation. Data analysis is needed to help plan for next year's compensation adjustments. Provide an example of each of the four types of analysis risk related to this analysis. Answer: Data Risk — Should housing costs data be included when determining cost of living adjustments? Analysis Risk — Should predictive analysis be used to account for inflation? Assumptions — Can we automatically assume that the cost of living has increased for all metropolitan areas? Biases — Are you biased in thinking that the metropolitan area that you are living in has a higher cost of living compared to other areas? Diff: 2 LO: 1-4 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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95) Crispy Buds is a startup bakery that specializes in warm cookies. They have expanded to multiple locations. Their data volume has increased, and their current inhouse data infrastructure is not scalable, so cloud data services are being investigated. A data analysis is required to project their data needs and help determine the type of cloud data service that is required. For each step in the data analysis (MOSAIC) process, apply the critical thinking framework by describing at least two critical thinking considerations.

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Answer: Data Analysis Process (MOSAIC) Stage 1: Plan Motivation

Objective

Strategy

Stage 2: Analyze Prepare data

Build models

Explore data

Stage 3: Report Interpret

Communicate

Critical Thinking Elements (SPARKS) • The motivation is to understand future data needs. • The main stakeholder is the chief information officer. • The objective is to determine which data cloud service is needed and when. • Ask articulating objective questions such as "At what rate is the data volume increasing?" • Obtain additional knowledge in cloud data services, which is an emerging technology. • Include descriptive analysis of the company's historic data volume trends so that predictive analysis can be done on the anticipated data volume. • Ensure that all company data is considered in the analysis, including data volume of unstructured data (customer online comments, images, etc.) • Determine which self-service business intelligence software that will best analyze the data. • Calculate the rate of data volume growth. • Calculate the costs involved given the projected data volume. • Determine if there is a correlation between sales volume and data volume. • Determine the trends in social media data and its effect on data volume. • Do the results show the costs required for using cloud data services? • Do the results determine which cloud data service should be used? • A presentation and data visualization will be done to communicate the results to the chief information officer. • The data visualization should show the correlation between the cost projections and the data volume projections.

Diff: 3 LO: 1-1, 1-2, 1-3, 1-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 44

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96) You are an auditor at Donlands Accounting. Your client is a public company and has been charged with fraud by the Securities and Exchange Commission in the past due to material misstatements in their financial statements. Specifically, low value expenses were not being audited so they were being capitalized as fixed assets, rather than classifying the transactions as expenses. You are testing the key assertions for expenses: occurrence, completeness, cut-off, classification and accuracy. Audit analytical procedures were applied to the accounting data to test the assertions, and you are now performing data analytics on the transactions. For each step in the data analysis (MOSAIC) process, apply the critical thinking framework by describing at least two critical thinking considerations.

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Answer: Data Analysis Process (MOSAIC) Stage 1: Plan Motivation

Objective

Strategy

Stage 2: Analyze Prepare data

Build models

Explore data

Critical Thinking Elements (SPARKS) • The motivation is to assess if recording of expense transactions is free of fraud. • The external stakeholder is the SEC. • The objective is to determine the expense balances are free from material misstatements. • Ask articulating objective questions such as • Are there any other fraud scenarios relating to expenses that should be analyzed? • Should external data such invoices sourced from the supplier be analyzed? • Conduct both prescriptive analysis (e.g., what is the percentage of expense being capitalize and diagnostics analysis (e.g., is there specific accounting staff capitalizing expense more than others). • Use all transactional data rather than a sampling of transactions to test the auditing assertions. • Extract the data from the accounting information system and request invoice data from suppliers. • Calculate the total invoice amount rather than individual invoice lines. • Calculate the total count of transactions that are capitalized by each accounting staff. • Determine if there is a correlation between transaction amounts and capitalizing the transaction. • Determine the historic trends of capital expenditures to see if there are patterns.

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Stage 3: Report Interpret

Communicate

• Does it make sense that there is a high percentage of lower dollar transactions being capitalized? • Does the expense balance satisfy the assertions: occurrence, completeness, cut-off, classification, and accuracy? • Self-reflection will include using the same analysis approach to test expense transactions for the next audit engagement. • A memo and a report with selected data visualizations will be used to communicate audit results to the client. • Create a data visualization that will summarize the transactions that are potentially classified incorrectly.

Diff: 3 LO: 1-1, 1-2, 1-3, 1-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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97) Dream Home Builders is a builder of custom homes. You are a financial accountant for the company and would like to analyze the financial impacts of changing the revenue recognition policy. The company is currently using the completed-contract method where all revenues and costs are deferred until the project is completed. GAAP also allows for the percentage-of-completion method, where revenues and costs are recognized in each accounting period as costs were incurred as a percentage of the total estimated cost. The company would like to use the revenue recognition method to give investors and lenders more confidence in their financial performance. For each step in the data analysis (MOSAIC) process, apply the critical thinking framework by describing at least two critical thinking considerations.

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Answer: Data Analysis Process (MOSAIC) Stage 1: Plan Motivation

Critical Thinking Elements (SPARKS) • The motivation is to use a revenue recognition method that best reflects their financial performance. • The main stakeholder is the chief financial officer who will be interested in the results.

Objective

Strategy

Stage 2: Analyze Prepare data

• The objective is to determine if they should switch to the percentage-of-completion method or continue to use the completed-contract method. • Ask articulating objective questions such as "What is the projected profitability trend in the next three years if the percentage-of-completion method is used?" • Internal data show the contract details (transaction price, construction time, etc.). • Use descriptive analysis of the company's historic contract data so that predictive analysis can be done to project profitability over the next few years. • Extract contract data from smart contracts (a blockchain technology used to automate the execution of the contract). • Merge historic data with housing projections to create revenue projections.

Build models

Explore data

• Calculation of total cost of each construction project. • Calculation of revenue allocated to each accounting period based on the percentage completion method. • Determine if the current data collected is reliable or if inflationary effects on costs should be explored. • Determine how labor costs and material costs will affect profitability.

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Stage 3: Report Interpret

Communicate

• Does the percentage-of-completion method better reflect their financial performance given the length of the contracts? • Are the financial projections valid and reliable given assumptions made on contract demands? • A memo should be prepared to outline the project's motivation, objectives, results, interpretation, and recommendations. • A dashboard can be created to show differences in revenue for both revenue recognition methods for past and projected financial statements.

Diff: 3 LO: 1-1, 1-2, 1-3, 1-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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98) You are a tax accountant at Bay Street Partners. In the next federal budget, the government is proposing changes to tax rules for certain individuals, estates and trusts. The proposed changes include increasing the top tax rate for individuals and imposing a minimum tax on wealthy individuals. You perform a data analysis to understand how these proposed changes will affect the tax liability of your clients. Briefly describe what you would suggest for each step in the data analysis (MOSAIC) process, then apply two critical thinking elements for each step listed.

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Answer: Data Analysis Process Brief Description (MOSAIC) Stage 1: Plan Motivation • understand impacts of proposed tax changes

Objective

Strategy

Stage 2: Analyze Prepare data

Build models

Explore data

Critical Thinking Elements (SPARKS)

• The motivation is to understand impacts of proposed tax changes to your clients. • The external stakeholder is the tax client who would be affected by the tax changes. • determine the value of the • The objective is to client's tax liability determine the value of the client's tax liability given the proposed changes. • Ask articulating objective questions such as "What income levels will trigger the minimum tax of wealthy individuals?" • Extract external data (tax • External data should include rate) and internal data (client proposed tax rates and information) taxable income brackets. • Client tax data can be extracted from the tax preparation software. • Merge external data with internal data

• Merge proposed tax rules with client data. • Filter out clients who are not affected by the proposed tax changes. • Calculation of total taxable • Calculation of total taxable income and determine the income. applicable tax rate • Calculation of tax rate based on taxable income. • Explore different • Determine if historical data visualizations that will help trends can help predict future clients understand the tax liability. proposed tax impacts • Explore data for capital losses that can be carried forward.

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Stage 3: Report Interpret

Communicate

• Self-reflection of • Take inventory of tax knowledge gained and knowledge gained so that it determine if the results of the can be applied for future analysis address the analyses. objectives of the analysis. • Do the results of the analysis provide answers to client's questions such as "What would be my expected tax liability?" • Communication should be • A memo should be sent to sent to clients and internal clients informing them of the tax partners. proposed tax changes and impacts to their tax liability. • A dashboard can be created for senior tax partners to show the scale of impacts that the proposed tax changes will have on existing clients.

Diff: 3 LO: 1-1, 1-2, 1-3, 1-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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99) Weekday Fresh is an online meal-kit and grocery delivery business. Revenue relies heavily on repeat customers. They know that specific demographics have higher demand for particular products and that sales are growing within specific age groups, income levels and other market segments. You are a management accountant for the company, and you have been asked by the VP of marketing to analyze website activity from Google Analytics and analyze demographic data. The results of the analysis will help form targeted marketing campaigns to acquire new customers and retain existing customers. For each step in the data analysis (MOSAIC) process, apply the critical thinking framework by describing at least two critical thinking considerations.

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Answer: Data Analysis Process (MOSAIC) Stage 1: Plan Motivation

Objective

Strategy

Stage 2: Analyze Prepare data

Build models

Explore data

Critical Thinking Elements (SPARKS) • The motivation is to use website activity and demographic data to inform decisions around marketing campaigns. • The main stakeholder is the VP of marketing who will use the results to target specific customer groups. • The objective is to identify demographic groups that will drive sales growth. • Ask articulating objective questions such as "Are sales growth from specific geographic areas or age groups?" • Internal data include existing customer profile data and their customer sales history. • External data should include data extracts from Google Analytics of website activity and website audience reports. • Extract data from Google Analytics into a comma separated values file. • Filter data for a data range and merge customer historic data into Alteryx for analysis. • Calculation of total customers counts based on age or regions. • Calculation of average order value based on customer income levels. • Explore data of sales trends on specialty foods. • Explore data to assess if the data can be used to build artificial intelligence models for suggesting products to repeat customers.

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Stage 3: Report Interpret

Communicate

• Consider the risks in the analysis. For example, is the data selected complete and reliable? • Do the results of the analysis identify a target market for marketing campaigns? • A presentation to the marketing team should be done to outline the project's motivation, objectives, results, interpretation, and recommendations. • A dashboard can be created to allow the marketing team to explore data and drill into specific demographic groups.

Diff: 3 LO: 1-1, 1-2, 1-3, 1-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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100) At Baycrest University, credit cards (PCards) have been issued to staff and faculty. The PCard program outlines dollar thresholds and allowable uses. For example, single transactions should not exceed $10,000. Purchases must be for business purchases. Department managers must review transactions on a monthly basis for compliance. PCards have offered convenience and reduced procurement costs, but there is a high risk of fraud and abuse. You are an internal auditor for the university, and you are tasked to perform an operational review of the program. Briefly describe what you would suggest for each step in the data analysis (MOSAIC) process, then apply two critical thinking elements for each step listed.

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Answer: Data Analysis Process Brief Description (MOSAIC) Stage 1: Plan Motivation • Assess PCard users' compliance to the program.

Objective

Strategy

Stage 2: Analyze Prepare data

Build models

Critical Thinking Elements (SPARKS)

• The motivation is to assess the level of compliance within the PCard program. • The Chief Financial Officer is a stakeholder since they will be responsible for any financial risk that the university has. • Determine any risk areas • The objective is to within the PCard program determine any risk areas within the PCard program. • Ask articulating objective questions such as "Are PCard holders splitting transactions to circumvent the $10,000 transaction limit?" • Determine what data needs • Determine what PCard to be used in the analysis. transactional data needs to be used for analysis. • Extract supporting purchasing data such as receipt of purchases.

• Perform ETL of the data.

• Download PCard transactions into Excel. • Filter transactions based on dates and load data into Tableau so that data can be visualized for anomalies and trends. Tableau allows for analysis of large amounts of data. • Calculation of totals from • Calculation of total number the data collected will allow of transactions by PCard. the data to be analyzed more • Calculation of total value of efficiently. transactions based on the merchant category code (every credit card transaction has a category of the merchant, for example, hardware store, airlines, etc.).

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Explore data

Stage 3: Report Interpret

Communicate

• Explore data for any relationships, patterns, or anomalies.

• Are there transactions that appear to be anomalies that should be investigated? • Are there product categories purchased that are considered to be a non-business expense?

• Self-reflection of knowledge gained; determine if analysis meets the objective.

• Take inventory of the knowledge that you gained from the PCard program and apply it for future analyses. • Do the results of the analysis determine if split transactions are occurring? • Communication should be • A written report should be sent to clients and internal sent to the PCard program partners manager to outline the project's motivation, objectives, results, interpretation, and recommendations. • If there are instances of fraud, a report of these instances should be sent to the director of internal audit.

Diff: 3 LO: 1-1, 1-2, 1-3, 1-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

© 2023 John Wiley & Sons, Inc. All rights reserved. Instructors who are authorized users of this course are permitted to download these materials and use them in connection with the course. Except as permitted herein or by law, no part of these materials should be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise. 59

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 2 Foundational Data Analysis Skills 1) A relational database A) is a collection of logically related data. B) stores data in individual tables that can be linked together. C) allows data to be retrieved, manipulated, and updated. D) All of these answer choices are correct. Answer: D Explanation: All of these answer choices are correct. Diff: 1 LO: 2-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) Database tables are comprised of rows and columns. The difference between a row and a column is that A) a row represents one record or instance of the table's object, and a column reflects the attributes. B) a row reflects the attributes, and a column represents a single data item. C) a row describes aspects of a resource, events, or agents of the object of interest, and a column reflects the attributes. D) a row represents one record or instance of the table's object, and a column represents a single field. Answer: A Explanation: A row in a table represents one record or instance of the table's object. The columns in a database table reflect the attributes, which are the data fields that describe different aspects of the records. Diff: 1 LO: 2-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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3) Identifiable objects that have economic value to the business entity are called A) events. B) resources. C) agents. D) tables. Answer: B Explanation: Identifiable objects that have economic value to the business entity are called resources. Diff: 1 LO: 2-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 4) Examples of attributes in a database table storing sales data are A) date of sales, sales quantity, and sales unit price. B) employee address, sales order number, and sales unit price. C) inventory on hand, name of salesperson, and employee address. D) customer number, reorder quantity level, and sales order number. Answer: A Explanation: Sales data should not store the employee address, inventory on hand, or reorder quantity level. Diff: 1 LO: 2-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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5) Bridgeport University is designing a new information system to track purchasing activity. The following database tables have been created. What are the primary keys to each of the tables? VendorRecord VendorID VendorName Street City State ZIP POData PONumber PODate VendorID POAmount InvoiceData InvoiceNumber InvoiceDate VendorID InvoiceAmount PONumber A) VendorName is the primary key for VendorRecord; PONumber is the primary key for POData; and PONumber is the primary key for InvoiceData. B) VendorID is the primary key for VendorRecord; PONumber is the primary key for POData; and InvoiceNumber is the primary key for InvoiceData. C) VendorName is the primary key for VendorRecord; PONumber is the primary key for POData; and VendorID is the primary key for InvoiceData. D) VendorID is the primary key for VendorRecord; VendorID is the primary key for POData; and InvoiceDate is the primary key for InvoiceData. Answer: B Explanation: In A, PONumber is the foreign key for InvoiceData; in C, VendorName is an attribute to Vendor Record; and in D, VendorID is a foreign key for POData. Diff: 1 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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6) Bridgeport University is designing a new information system to track purchasing activity. The following database tables have been created. What are the foreign keys to each of the tables? VendorRecord VendorID VendorName Street City State ZIP POData PONumber PODate VendorID POAmount InvoiceData InvoiceNumber InvoiceDate VendorID InvoiceAmount PONumber A) VendorRecord has no foreign keys; VendorID is the foreign key for POData; and VendorID is the foreign key for InvoiceData. B) VendorID is the foreign key for VendorRecord; PONumber is the foreign key for POData; and InvoiceNumber is the foreign key for InvoiceData. C) VendorName is the foreign key for VendorRecord; VendorID is the foreign key for POData; and VendorID is the foreign key for InvoiceData. D) VendorRecord has no foreign keys; VendorID is the foreign key for POData; and VendorID and PONumber are the foreign keys for InvoiceData. Answer: D Explanation: In A, VendorID is the primary key for VendorRecord; in B, PONumber is the primary key for POData; and in C, VendorName is an attribute to VendorRecord. Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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64) Bridgeport University is designing a new information system to track purchasing activity. Thefollowing database tables have been created. POData PONumber PODate VendorID POAmount InvoiceData InvoiceNumber InvoiceDate VendorID InvoiceAmount PONumber POData is the left table and InvoiceData is the right table. What join type would be used to determine if there are invoices that do not have a matching purchase order (PO)? A) Left join B) Right join C) Inner join D) Full join Answer: B Explanation: Left join will show all POData and matching invoice data. Inner join will only show matching POData and InvoiceData rows. Full join will show all POData and all Invoice Data rows. Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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65) Bridgeport University is designing a new information system to track purchasing activity. Thefollowing database tables have been created. POData PONumber PODate VendorID POAmount InvoiceData InvoiceNumber InvoiceDate VendorID InvoiceAmount PONumber POData is the left table and InvoiceData is the right table. What join type would be used to show only the invoices that have matching purchase orders (POs)? A) Left join B) Right join C) Inner join D) Full join Answer: C Explanation: Left join will show all POData and matching invoice data. Right join will show all InvoiceData rows that have matching POData rows. Full join will show all POData and Invoice Data rows. Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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66) Temple Consulting is a professional services company. Employee training is critical to theirsuccess in their knowledge industry. The HRIS system tracks employee training. The HRIS database contains the following tables: EmployeeID 10343 10354 10385 10399

EmployeeData First Name Last Name Sandra Song Nicole Kim Samuel Walter Jeffrey King

CourseID 543 543 543 754 754 754 939

TrainingData EmployeeID DateCompleted 10343 2022-05-05 10354 2022-05-05 10385 2022-10-11 10343 2022-11-09 10354 2022-01-08 10385 2022-09-11 10343 2022-11-13

HireDate 2017-02-02 2018-05-07 2018-09-14 2019-04-16

EmployeeData is the left table and TrainingData is the right table. If the EmployeeID field is used for the join, performing an inner join with EmployeeData and TrainingData will result in A) 7 rows. B) 0 rows. C) 4 rows. D) 6 rows. Answer: A Explanation: Inner join will show all rows from both tables with matching values. The join will result in the following: EmployeeID First Name 10343 Sandra 10343 Sandra 10343 Sandra 10354 Nicole 10354 Nicole 10385 Samuel 10385 Samuel

Last Name Song Song Song Kim Kim Walter Walter

HireDate

CourseID DateCompleted

2017-02-02 2017-02-02 2017-02-02 2018-05-07 2018-05-07 2018-09-14 2018-09-14

543 754 939 543 754 543 754

Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 66

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67) Temple Consulting is a professional services company. Employee training is critical to their success in their knowledge industry. The HRIS system tracks employee training. The HRIS database contains the following tables: EmployeeID 10343 10354 10385 10399

EmployeeData First Name Last Name Sandra Song Nicole Kim Samuel Walter Jeffrey King

CourseID 543 543 543 754 754 754 939

TrainingData EmployeeID DateCompleted 10343 2022-05-05 10354 2022-05-05 10385 2022-10-11 10343 2022-11-09 10354 2022-01-08 10385 2022-09-11 10343 2022-11-13

HireDate 2017-02-02 2018-05-07 2018-09-14 2019-04-16

EmployeeData is the left table and TrainingData is the right table. If the EmployeeID field is used for the join, performing a left join with EmployeeData and TrainingData will result in A) 7 rows. B) 8 rows. C) 4 rows. D) 6 rows.

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Answer: B Explanation: A left join returns all records from EmployeeTable and the matching records from TrainingData. The join will result in the following: EmployeeID First Name 10343 Sandra 10343 Sandra 10343 Sandra 10354 Nicole 10354 Nicole 10385 Samuel 10385 Samuel 10399 Jeffrey

Last Name Song Song Song Kim Kim Walter Walter King

HireDate CourseID DateCompleted 2017-02-02 543 2017-02-02 754 2017-02-02 939 2018-05-07 543 2018-05-07 754 2018-09-14 543 2018-09-14 754 2019-04-16

Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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2022-05-05 2022-11-09 2022-11-13 2022-05-05 2022-01-08 2022-10-11 2022-09-11

69) Temple Consulting is a professional services company. Employee training is critical to their success in their knowledge industry. The HRIS system tracks employee training. The HRIS database contains the following tables: EmployeeID 10343 10354 10385 10399

EmployeeData First Name Last Name Sandra Song Nicole Kim Samuel Walter Jeffrey King

CourseID 543 543 543 754 754 754 939

TrainingData EmployeeID DateCompleted 10343 2022-05-05 10354 2022-05-05 10385 2022-10-11 10343 2022-11-09 10354 2022-01-08 10385 2022-09-11 10343 2022-11-13

HireDate 2017-02-02 2018-05-07 2018-09-14 2019-04-16

EmployeeData is the left table and TrainingData is the right table. If the EmployeeID field is used for the join, performing a right join between EmployeeData and TrainingData will results in A) 7 rows. B) 0 rows. C) 4 rows. D) 6 rows. Answer: A Explanation: A right join will return all records from TrainingData and the matching records from EmployeeTable. The join will result in the following: EmployeeID First Name 10343 Sandra 10343 Sandra 10343 Sandra 10354 Nicole 10354 Nicole 10385 Samuel 10385 Samuel

Last Name Song Song Song Kim Kim Walter Walter

HireDate CourseID DateCompleted 2017-02-02 939 2017-02-02 754 2017-02-02 543 2018-05-07 754 2018-05-07 543 2018-09-14 754 2018-09-14 543

Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 69

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2022-11-13 2022-11-09 2022-05-05 2022-01-08 2022-05-05 2022-09-11 2022-10-11

70) Temple Consulting is a professional services company. Employee training is critical to their success in their knowledge industry. The HRIS system tracks employee training. The HRIS database contains the following tables: EmployeeData Last Name Song Kim Walter King

EmployeeID 10343 10354 10385 10399

First Name Sandra Nicole Samuel Jeffrey

Position Manager Director Manager Manager

CourseID 543 543 543 754 754 754 939

TrainingData EmployeeID DateCompleted 10343 2022-05-05 10354 2022-05-05 10385 2022-10-11 10343 2022-11-09 10354 2022-01-08 10385 2022-09-11 10343 2022-11-13

HireDate 2017-02-02 2018-05-07 2018-09-14 2019-04-16

EmployeeData is the left table and TrainingData is the right table. What would be the most appropriate join type to determine what employee has not taken a course? A) EmployeeData left join with TrainingData B) EmployeeData inner join with TrainingData C) TrainingData right join with TrainingData D) None of the answer choices are correct. Answer: A Explanation: A left join returns all records from the left table and matching records from the right table. Any null values will indicate that the employee has not taken a course. Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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71) Temple Consulting is a professional services company. Employee training is critical to their success in their knowledge industry. The HRIS system tracks employee training. The HRIS database contains the following tables: EmployeeData Last Name Song Kim Walter King

EmployeeID 10343 10354 10385 10399

First Name Sandra Nicole Samuel Jeffrey

Position Manager Director Manager Manager

CourseID 543 543 543 754 754 754 939

TrainingData EmployeeID DateCompleted 10343 2022-05-05 10354 2022-05-05 10385 2022-10-11 10343 2022-11-09 10354 2022-01-08 10385 2022-09-11 10343 2022-11-13

HireDate 2017-02-02 2018-05-07 2018-09-14 2019-04-16

If EmployeeData is the left table and TrainingData is the right table, what would be the most appropriate join type to determine which courses were taken by employees who are managers? A) EmployeeData left join with TrainingData B) EmployeeData inner join with TrainingData C) EmployeeData right join with TrainingData D) None of the answer choices are correct. Answer: B Explanation: Inner join shows all rows from both tables with matching values. There will not be any null values. Diff: 2 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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72) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A B SalesID Product 203211 Premium 203212 Economy 203213 Luxury 203214 Luxury … … 205304 Economy 205303 Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What is the Excel formula that will determine the total sales quantity of premium cars? A) =SUM(E2:E2030,"Premium",B2:B2030) B) =SUMIF(E2:E2030,"Premium",B2:B2030) C) =SUMIF(B2:B2030,"Premium",E2:E2030) D) =SUMIF(E2:E2030,B2:B2020,"Premium") Answer: C Explanation: A and B will result in an error in the formula since column B is not numeric. D will result in an error in the formula. Diff: 2 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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73) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A SalesID 203211 203212 203213 203214 … 205304 205303

B Product Premium Economy Luxury Luxury … Economy Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What is the Excel formula that will calculate the total count of sales orders in the state of California? A) =COUNT(C2:C2030, "CA", A2:A2020) B) =COUNTIF(C2:C2030, "CA") C) =COUNTIF(B2:B2030, "CA") D) =COUNTIF(B2:B2030, C2:C2020, "CA") Answer: B Explanation: A will result in an error in the formula. C will result in 0 since there is no "CA" in column B. D will result in an error in the formula. Diff: 2 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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74) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A SalesID 203211 203212 203213 203214 … 205304 205303

B Product Premium Economy Luxury Luxury … Economy Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What is the Excel formula that will calculate the total sales quantity for the state of New York for July 1, 2022 and onwards? A) =SUMIF(C2:C2030, "CA", D2:D2030,">2022-06-30", F2:F2030) B) =SUMIFS(C2:C2030, "CA", D2:D2030,">2022-06-30", F2:F2030) C) =SUMIFS(E2:E2030,C2:C2030,"NY", D2:D2030,">2022-06-30") D) =SUM(E2:E2030,C2:C2030,"NY", D2:D2030,">2022-06-30") Answer: C Explanation: A and B will result in an error in the formula since column C is not numeric. D will result in an error in the formula. Diff: 2 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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17) Eagle Wings Motors is an auto manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A SalesID 203211 203212 203213 203214 … 205304 205303

B Product Premium Economy Luxury Luxury … Economy Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What is the Excel formula that will calculate the average unit price of luxury cars sold? A) =AVEIF(F2:F2030, B2:B2030,"Luxury") B) =AVERAGEIF(F2:F2030, B2:B2030,"Luxury") C) =AVERAGE(B2:B2030,"Luxury", F2:F2030) D) =AVERAGEIF(B2:B2030,"Luxury", F2:F2030) Answer: D Explanation: A, B, and C will result in an error in the formula. Diff: 2 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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76) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A B SalesID Product 203211 Premium 203212 Economy 203213 Luxury 203214 Luxury … … 205304 Economy 205303 Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What is the Excel formula that will calculate the total count of sales orders in the state of California and New York? A) =COUNTIF(C2:C2030, "CA") + COUNTIF(C2:C2030, "NY") B) =COUNTIFS(C2:C2030, "CA", C2:C2030, "NY") C) =COUNTIF(C2:C2030, "CA", C2:C2030, "NY") D) =COUNTIF(C2:C2030, "CA,NY") Answer: A Explanation: B and D will result in 0. C will result in an error in the formula. Diff: 3 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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77) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A B SalesID Product 203211 Premium 203212 Economy 203213 Luxury 203214 Luxury … … 205304 Economy 205303 Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What is the Excel formula that will calculate the number of rows that have the Location field as blank? A) =COUNTBLANK(C3:C2030) B) =COUNTA(C3:C2030) C) =COUNT(C3:C2030, "") D) =COUNTBLANK(C3:C2030, "") Answer: A Explanation: B will count the number of cells containing text. C will count the number of cells in a range that contain numbers. D will result in an error in the formula. Diff: 2 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 20) A pivot table has the following components A) columns, rows, values, and filters. B) categories, rows, values, and ranges. C) columns, rows, measures, and filters. D) dimensions, values, and filters. Answer: A Explanation: A pivot table has the following components: columns, rows, values, and filters. Diff: 1 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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21) You have an extract of the payroll data for the last fiscal year. Payroll runs twice a month. The spreadsheet has the following columns: Pay Date, Employee, Department, and Payment Amount. How do you summarize the data as a pivot table to show the total payroll payments by department? A) Set Department as dimensions and set Sum of Payment Amount as values. B) Set Department as rows and set Payment Amount as columns. C) Set Department as columns and set Sum of Payment Amount as measures. D) Set Department as rows and set Sum of Payment Amount as values. Answer: D Explanation: Set Department as rows and set Sum of Payment Amount as values. Diff: 2 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 22) You have an extract of the payroll data for the last fiscal year. Payroll runs twice a month. The spreadsheet has the following columns: Pay Date, Employee, Department, and Payment Amount. How would you determine the total payment for each employee in the first quarter for the year? A) Set Department as rows, set Employee as columns, and set Sum of Payment Amount as values, and set Pay Date as filters. B) Set Department as rows, set Pay Date as columns, set Sum of Payment Amount as values, and set Employee as filters. C) Set Employee as rows, set Sum of Payment Amount as values, and set Pay Date as filters. D) Set Employee as rows and set Sum of Payment Amount as values. Answer: C Explanation: Set Employee as rows, set Sum of Payment Amount as values, and set Pay Date as filters. Diff: 2 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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23) You have an extract of the payroll data for the last fiscal year. Payroll runs twice a month. The spreadsheet has the following columns: Pay Date, Employee, Department, and Payment Amount. How would you determine the total number of employees by department? A) Set Department as rows and set Count of Employee as values. B) Set Employee as rows and set Department as columns. C) Set Department as rows and set Count of Employee as columns. D) Set Department as rows and set Sum of Employee as values. Answer: A Explanation: Set Department as rows and set Count of Employee as values. Diff: 2 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 24) You have an extract of the sales data of the last three fiscal years. The extract is a spreadsheet with the following columns: Sales Date, Sales Order ID, Sales Amount, Product, and Sales Region. How would you determine the average sales transaction amount? A) Set Sales Order ID as rows and set Average of Sales Amount as values. B) Keep rows and columns as empty and set Average of Sales Amount as values. C) Set Sales Order ID as columns and set Average of Sales Amount as values. D) Set Sum of Sales Amount and Count of Sales Order ID as values. Answer: B Explanation: Keep rows and columns as empty and set Average of Sales Amount as values. Diff: 2 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 25) You are analyzing employee salaries. If the salary values are spread-out evenly then A) the mode and median should be similar. B) the mean and median should be similar. C) the mode and mean should be similar. D) the mean and median should be very different. Answer: B Explanation: The mean and median should be similar. Diff: 1 LO: 2-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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26) You are analyzing employee salaries. If the salary values are skewed such that there are a few employees with extremely high salaries, A) the median is a better measure since the mean will be influenced by the few extremely high salaries. B) the mean is a better measure since the median will be influenced by the few extremely high salaries. C) the mode is a better measure since the median will be influenced by the few extremely high salaries. D) the mode and the median will provide similar values. Answer: A Explanation: The median is a better measure if there are data outliers. Diff: 2 LO: 2-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 27) Variance and standard deviations are examples of A) measures of location. B) measures of dispersion. C) measures of central tendency. D) measures of shape. Answer: B Explanation: Variance and standard deviations are examples of measures of dispersion. Diff: 1 LO: 2-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 28) When analyzing accounts receivable values by customers, a high standard deviation A) indicates that the values are spread out over a wide range. B) indicates that the values are spread out over a small range. C) indicates that the values are close to the mean. D) indicates that the values are close to the median. Answer: A Explanation: A high standard deviation indicates that there is a high degree of dispersion, so values are spread out over a wide range. Diff: 1 LO: 2-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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29) When analyzing employee sales, you see that most of the salaries are close to the mean. This would imply that the A) standard deviation is high. B) standard deviation is low. C) standard deviation could be high or low. D) variance and standard deviations would be similar values. Answer: B Explanation: A low standard deviation indicates that there is a low degree of dispersion, so the values are close to the mean. Diff: 1 LO: 2-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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30) The following scatter chart was created to show the employee salaries by tenure.

With respect to salary values, the results of the scatter chart show that A) there is a high standard deviation. B) the mean and median values are similar. C) the difference between the mean and median is large. D) the variance and standard deviation will have similar values. Answer: B Explanation: Since the salary values appear to be relatively uniform, the mean and median values should be similar. Diff: 2 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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31) When analyzing the values of the mean, median and mode, which statement is correct? A) If there are outliers in the data, the mean tends to be a more reliable value. B) If there are outliers in the data, the median tends to be a more reliable value. C) If there are outliers in the data, the mode tends to be a more reliable value. D) The mean is always more reliable than the median. Answer: B Explanation: The mean will be influenced if there are outliers in the data, so the median is a more reliable. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 32) In a symmetrical distribution, what conclusion can be made about the mean, median and mode? A) The mean, median, and mode will have the same values. B) Only the mean and mode will have the same values. C) Only the mean and median will have the same values. D) The mean, median, and mode will have different values. Answer: A Explanation: The mean, median, and mode will have the same value. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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84) You are a financial analyst, and you are asked to show the salary distribution of employees. The distribution has been plotted out in the following graph:

The distribution is showing that A) the coefficient of skewness will be negative, and the mean will be lower than the median. B) the coefficient of skewness will be negative, and the mean will be higher than the median. C) the coefficient of skewness will be positive, and the mean will be lower than the median. D) the coefficient of skewness will be positive, and the mean will be higher than the median. Answer: A Explanation: The distribution is showing a negative skew, which indicates that the mean will be lower than the median. Diff: 2 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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85) You are a financial analyst, and you are asked to show the salary distribution of employees. The distribution has been plotted out in the following graph:

The distribution is showing that A) the coefficient of skewness will be negative, and the mean will be lower than the median. B) the coefficient of skewness will be negative, and the mean will be higher than the median. C) the coefficient of skewness will be positive, and the mean will be lower than the median. D) the coefficient of skewness will be positive, and the mean will be higher than the median. Answer: D Explanation: The distribution is showing a positive skew, which indicates that the mean will be higher than the median. Diff: 2 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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35) At BTE Accounting Services, employee lunches are reimbursed during business travel. The lunch expense distribution is plotted for the Assurance and Taxation division.

The distribution is showing that A) the coefficient of kurtosis will be higher for the Assurance division compared to the Taxation division. B) the coefficient of kurtosis will be higher for the Taxation division compared to the Assurance division. C) the coefficient of kurtosis for Taxation division and the Assurance division will be the same. D) None of these answer choices are correct.

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Answer: B Explanation: Kurtosis refers to how peaked or flat a histogram of the data is. If there is more peak the coefficient of kurtosis will be higher. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 36) A coefficient of skewness of 0.6 means that A) there is moderate skewness, and the data is right skewed. B) there is a high degree of skewness, and the data is right skewed. C) there is moderate skewness, and the data is left skewed. D) there is a high degree of skewness, and the data is left skewed. Answer: A Explanation: Values of 0.5 ≤ |CS| ≥ 1 indicate moderate skewness. If the CS is positive, the data is right skewed (tails off to the right). Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 37) A coefficient of skewness of -2.3 means that A) there is a high degree of skewness, and the data is left skewed. B) there is a high degree of skewness, and the data is right skewed. C) there is moderate skewness, and the data is right skewed. D) there is moderate skewness, and the data is left skewed. Answer: A Explanation: Values of |CS| > 1 indicate a high degree of skewness. If the CS is negative, the data is left skewed (tails off to the left). Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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38) A coefficient of kurtosis of 4.2 means that the A) data is somewhat flat with a wide degree of dispersion. B) data is somewhat peaked with less dispersion. C) data has a high degree of skewness. D) data has a moderate degree of skewness. Answer: B Explanation: If the CK is greater than three, the data is somewhat peaked with less dispersion. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 39) In a symmetrical distribution, the A) coefficient of kurtosis will be greater than 3. B) coefficient of skewness will be between 0.5 and 1. C) coefficient of kurtosis can be useful for measuring dispersion. D) coefficient of skewness will be greater than 1. Answer: C Explanation: In any distribution, the coefficient of kurtosis can be useful for measuring dispersion. Diff: 2 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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89) You are a financial analyst, and you are reviewing supplier performance for the procurement department. The suppliers' credit rating is part of the key performance indicators. A histogram chart showing distribution of supplier credit ratings is provided. What conclusions can be made?

A) The measure of location shows that the median is lower than the mean and the measure of shape shows that the coefficient of skewness is positive. B) The measure of location shows that the median is higher than the mean and the measure of shape shows that the coefficient of skewness is negative. C) The measure of location shows that the median is lower than the mean and the measure of shape shows that the coefficient of skewness is less than 0.5. D) The measure of location shows that the median is higher than the mean and the measure of shape shows that the coefficient of skewness is greater than 1. Answer: A Explanation: The distribution is showing a positive skew, so the median is lower than the mean. Diff: 2 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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90) You are a financial analyst, and you are reviewing supplier performance for the procurement department. The suppliers' credit rating is part of the key performance indicators. A histogram chart showing distribution of supplier credit ratings is provided. What conclusions can be made?

A) The bin range is in increments of 5. B) The bin range is in increments of 10. C) The coefficient of skewness is less than 1. D) The coefficient of kurtosis is less than 1. Answer: A Explanation: The bin range is in increments of 5. For example, 60-64, 65-69, etc. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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42) Over the last 5 years, mortgage rates have been changing. You are a financial analyst at a real estate company, and you want to see the effect of mortgage rates and home sales. You create a scatter chart showing mortgage rates against the number of sales. What data relationship is being shown?

A) There is a strong positive linear relationship between mortgage rates and home sales. B) There is no linear relationship between mortgage rates and home sales. C) There is a perfect linear relationship between mortgage rates and home sales. D) There is a strong negative linear relationship between mortgage rates and home sales. Answer: D Explanation: There is a strong negative linear relationship between mortgage rates and home sales. As mortgage rates increase, the number of home sales decrease. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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43) The price of gas impacted the sales of hybrid vehicles. The following scatter chart shows the price of gas against the sales units of hybrid vehicles. What data relationship is being shown?

A) There is a strong negative linear relationship between gas prices and hybrid vehicles. B) There is a strong positive linear relationship between gas prices and hybrid vehicles. C) There is no linear relationship between gas prices and hybrid vehicles. D) There is a perfect linear relationship between gas prices and hybrid vehicles. Answer: B Explanation: There is a strong positive linear relationship between gas prices and hybrid vehicles. As gas prices increase, hybrid vehicles sales increase. Diff: 1 LO: 2-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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44) Driving Comfort offers automotive insurance. A correlation analysis was completed to show the age of policy holders and their average claim. The correlation coefficient between the age of policy holders and their average claim is -0.78. What can be concluded? A) There is a moderate negative linear relationship between the age of policy holders and their average claim. B) There is a weak linear relationship between the age of policy holders and their average claim. C) There is a strong negative linear relationship between the age of policy holders and their average claim. D) There is no linear relationship between the age of policy holders and their average claim. Answer: C Explanation: A correlation coefficient between age of -0.78 indicates a strong negative linear relationship. Diff: 1 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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45) Descriptive Statistics in Excel was used to analyze accounts payable values. The results are as follows: Accounts Payable Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

880.9722222 160.9982672 779 #N/A 965.9896032 933,135.9135 28.06306646 4.991430883 6,169 34 6,203 31,715 36

The results are showing that A) the average accounts payable is $881; the middle value of accounts payables is $779; and there is a wide dispersion of accounts payable values. B) the average accounts payable is $881; the middle value of accounts payables is $779; and for any given account, the accounts payables value could be + or - $966 from $779. C) the average accounts payable is $779; the middle value of accounts payables is $881; and for any given account, the accounts payables value could be + or - $966 from $779. D) None of the answer choices are correct. Answer: A Explanation: The average is represented by mean. The middle value is represented by median. The standard deviation is high since it is greater than the mean, so there is a wide dispersion of accounts payable values. Diff: 2 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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46) Descriptive Statistics in Excel was used to analyze outstanding accounts payable values. The results are as follows: Accounts Payable Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

880.9722222 160.9982672 779 #N/A 965.9896032 933,135.9135 28.06306646 4.991430883 6,169 34 6,203 31,715 36

The results are showing that A) the shape of the accounts payable value distribution is peaked with less dispersion. The data peaks around the median and then tails off to the left. B) the shape of the accounts payable value distribution is flat with a wide degree of dispersion. The data peaks around the mean and then tails off to the right. C) the shape of the accounts payable value distribution is flat with a wide degree of dispersion. The data peaks around the mean and then tails off to the left. D) the shape of the accounts payable value distribution is peaked with less dispersion. The data peaks around the mean and then tails off to the right. Answer: D Explanation: Since the coefficient of kurtosis is greater than 3, the data is somewhat peaked with less dispersion. Since the coefficient of skewness is positive, data peaks around the mean and then tails off to the right. Diff: 2 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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47) Your company produces 25 different product categories. To compare the total value of sales for each product category, what data visualization would be the most appropriate to use? A) Area charts B) Line charts C) Pie charts D) Tree maps Answer: D Explanation: A and B require a date. C should have a max of five segments. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 48) Prime Pizza produces five different types of pizza. To show the monthly sales trends for each type of pizza over the year, what data visualization would be the most appropriate to use? A) Bar charts B) Bubble charts C) Pie charts D) Tree maps Answer: A Explanation: B, C and D do not show trends by date, so these are not appropriate. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 49) The marketing department of Jasmine Fashion House has asked you to compare sales according to the customer's age. The information will be used to target marketing campaigns to specific age groups. What data visualization would be the most appropriate to use? A) Tree maps B) Scatter charts C) Area charts D) Bubble charts Answer: B Explanation: Scatter charts show correlations between two or more data elements. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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50) If the purpose of the analysis is to show data relationships, what is the best data visualization to use? A) Area charts B) Line charts C) Column charts D) Bubble charts Answer: B Explanation: Line charts with multiple lines shows correlation between data elements. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 51) What is a best practice for using pie charts? A) Limit segments to a maximum of 5. B) Limit segments to a maximum of 10. C) Start the first segment at the 6 o'clock position. D) Always show the percentage of each segment. Answer: A Explanation: Limit segments to a maximum of 5, otherwise, the segment size would be too hard to evaluate. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 52) What is a best practice for using line charts? A) Do not plot more than 10 lines; instead, use multiple charts. B) Start the y-axis at zero or above. C) Use solid lines or dotted lines. D) Do not plot more than four lines. Answer: D Explanation: Do not plot more than four lines. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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53) What is a best practice for using histogram charts? A) Use a zero baseline. B) The bins should represent time intervals. C) There should be a max of 10 bins. D) There should be a minimum of 3 bins. Answer: A Explanation: Use a zero baseline. Otherwise, the data may appear skewed. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 54) You are asked to review the following data visualization that shows your department expenses by category.

What is your feedback? A) There should be better color contrast between bubbles. B) A bubble chart is not an effective visualization when the value of the categories is similar. C) The percentage of the total spend should be shown within each bubble. D) The bubble chart is appropriate, and no changes are needed. Answer: B Explanation: Do not use a bubble chart if they are all similar in size. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 98

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55) You are asked to review the following data visualization that shows your department expenses by category.

What is your recommendation? A) Convert the bubble chart to a bar chart so that the size of the column can be easily compared. B) Convert the bubble chart to a tree map so that the size of the squares can be easily compared. C) Convert the bubble chart to an area chart so that the size of the areas can be easily compared. D) There are no improvements needed. Answer: A Explanation: A bar chart compares values by column length for each category. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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100) You are asked to review the following data visualization that shows revenue by category forSunny Supermarket.

What is your feedback? A) A pie chart is not an appropriate visualization to use since there are too many segments to show. B) The percentage of total revenue for each product category should always be displayed. C) The product category should be ordered from the highest revenue to the lowest revenue starting from the 12 o'clock position. D) The product category should be ordered alphabetically starting from the 12 o'clock position. Answer: A Explanation: A pie chart should have a max of 5 segments. Diff: 1 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

100

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101) You are asked to review the following data visualization that shows revenue by category forSunny Supermarket.

What is your recommendation? A) Convert the pie chart to a bar chart since there are too many segments. B) Convert the pie chart to a stacked column chart so that the total revenue can also be shown. C) Adjust the pie chart by consolidating some categories together. D) Convert the pie chart to an area chart since the size of the areas can be easily compared. Answer: A Explanation: A bar chart compares values for each category. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

101

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58) The best data visualization to show data trends would be A) a pie chart. B) a line chart. C) a tree map. D) a bubble chart. Answer: B Explanation: A, C and D don't support a time series. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

102

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103) You are asked to review the following data visualization that shows revenue by categories forJ & J Hardware.

What is your feedback? A) The categories should be ordered alphabetically so that the categories can be easily found. B) A vertical bar chart is not appropriate to use since there are too many categories shown. C) The categories should be coded in different colors for better readability. D) The total revenue value for each category should be shown at the top of each bar. Answer: B Explanation: Vertical bars should have a max of seven categories. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

103

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104) You are asked to review the following data visualization that shows revenue by categories forJ & J Hardware.

What is your recommendation? A) The vertical bar chart should be changed to a pie chart. B) The vertical bar chart should be changed to a tree map. C) The vertical bar chart should be changed to a horizontal bar chart. D) The vertical bar chart should be changed to a line chart. Answer: C Explanation: A horizontal bar chart should be used since horizontal labels offers better readability. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

104

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61) A best practice for bar charts is A) always use a zero baseline. B) use vertical bars if there are less than 10 categories. C) use horizontal bars if there are more than 10 categories. D) color coding bars for each category. Answer: A Explanation: Always use a zero baseline so that the data doesn't look skewed. Diff: 1 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 62) Hammond Chairs manufactures office chairs. To analyze manufacturing data, a scatter chart was used to plot the total cost of materials against the total units produced for each batch of production. This is an example of A) exploratory data visualization to identify patterns, trends, or anomalies. B) exploratory data visualization to show relationships in the data and communicate insights. C) explanatory data visualization to identify patterns, trends, or anomalies to show relationships in the data, and communicate insights. D) explanatory data visualization to show relationships in the data and communicate insights. Answer: A Explanation: Exploratory data visualization is used to identify patterns, trends, or anomalies. Diff: 2 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

105

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63) Field House Social is a national chain of restaurants. You want to identify which restaurants generate the most revenue based on the number of employees at each restaurant. What is the purpose of the analysis and the data visualization that should be used? A) The purpose of the analysis is to show data relationships, and a line chart is an appropriate data visualization to use. B) The purpose of the analysis is to show data distributions, and a scatter chart is an appropriate data visualization to use. C) The purpose of the analysis is to show data relationships, and a scatter chart is an appropriate data visualization to use. D) The purpose of the analysis is to show data distributions, and a bar chart is an appropriate data visualization to use. Answer: C Explanation: The data relationship between revenue and the number of employees at each restaurant location can be shown through a scatter chart. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 64) Lighting Technologies is a public traded company. You want to compare Lighting stock prices against the stock prices of your top five competitors. What is the purpose of the analysis and the data visualization that should be used? A) The purpose of the analysis is to show trends, and a scatter chart is an appropriate data visualization to use. B) The purpose of the analysis is to show trends, and a column chart is an appropriate data visualization to use. C) The purpose of the analysis is to show comparisons, and a line chart is an appropriate data visualization to use. D) The purpose of the analysis is to show comparisons, and an area chart is an appropriate data visualization to use. Answer: C Explanation: The purpose of the analysis is to show comparisons between stock prices. A line chart is an appropriate data visualization to use since it allows a time series to be shown. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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65) Jarvis Publishing is a publisher of educational materials. Sales throughout the year can be seasonal. A data visualization is being created to show sales throughout the year. What is the purpose of the analysis and the data visualization that should be used? A) The purpose of the analysis is to show distributions, and a column chart is an appropriate data visualization to use. B) The purpose of the analysis is to show comparisons, and a scatter chart is an appropriate data visualization to use. C) The purpose of the analysis is to show trends, and a scatter chart is an appropriate data visualization to use. D) The purpose of the analysis is to show trends, and a line chart is an appropriate data visualization to use. Answer: D Explanation: The purpose of the analysis is to show trends throughout the year. A line chart is an appropriate data visualization to use since it allows a time series to be shown. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 66) If the purpose of the analysis is to show composition, A) area charts, pie charts and scatter charts can be used. B) pie charts, histogram charts, and scatter charts can be used. C) histogram charts, scatter charts, and stacked bar charts can be used. D) area charts, pie charts, and stacked bar charts can be used. Answer: D Explanation: Scatter charts show relationship and histogram chart shows distribution, so these don't show composition. Diff: 2 LO: 2-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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67) Consider the following Excel worksheet for customer accounts:

1 2 3 4 5 …

A B C Customer ID Outstanding Balance Status 203211 $104,100 High Risk 203212 $99,900 Low Risk 203213 $76,000 Low Risk 203214 $99,900 … … …

Column C indicates if the Customer is "High Risk" or "Low Risk". What would be the formula for C5 given the results of other values in the Status column? A) IF(B5>100000, "High Risk", "Low Risk") B) IFS(B5>100000, "High Risk", "Low Risk") C) IF(B5<100000, "High Risk", "Low Risk") D) IFS(B5>100000, "Low Risk", "High Risk") Answer: A Explanation: B and D would result in an error in the formula. C would show that $99,900 is "High Risk" which is incorrect. Diff: 2 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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68) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the sales order table:

1 2 3 4 5 … 2029 2030

A B SalesID Product 203211 Premium 203212 Economy 203213 Luxury 203214 Luxury … … 205304 Economy 205303 Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

Line 2030 is the last sales record in the file. What are the Excel formulas that will calculate the number of rows that have the Location field as blank? Select all that apply. A) =COUNTIF(C2:C2030, "") B) =COUNTBLANK(C2:C2030) C) =COUNTIFS(C2:C2030, "") D) =COUNTA(C2:C2030) Answer: A, B, C Explanation: D will count the number of cells containing text. Diff: 3 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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110) AutoFood is a food delivery service. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the total sales for each customer: A B C D 1 CustID First Last Phone 2 3002 Shawn Ng 503-345-1405 3 3003 Penny Singh 503-365-2434 4 3004 Daisy Roberts 5 3005 William Martin 503-645-6434 … … … … … 670 3670 Ethel Parson 503-755-7405 671 3671 Denise Bishop 503-905-9415

F Email Region s.ng1@mail.com Central South drob2@mail.com East Wm2@mail.com West … … epars@gmail.com North dbisho@msn.com Central

G Sales $234.13 $1273.11 $2234.43 $254.17 $8233.34

Line 671 is the last record in the spreadsheet. What are the Excel formulas that will calculate the total sales within the Central and East regions? Select all that apply. A) =SUMIF(G2:G671, F2:F671, "Central", F2:F671, "East") B) =SUMIF(F2:F671, "Central", G2:G671) + SUMIF(F2:F671, "East", G2:G671) C) =SUMIFS(G2:G671, F2:F671, "Central", F2:F671,"East") D) =SUMIFS(G2:G671, F2:F671, "Central") + SUMIFS(G2:G671, F2:F671, "East") Answer: B, D Explanation: C will result in 0. A will result in an error in the formula. C will result in 0. A will result in an error in the formula. Diff: 3 LO: 2-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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111) AutoFood is a food delivery service. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheet of the total sales for each customer: A B C D 1 CustID First Last Phone 2 3002 Shawn Ng 503-345-1405 3 3003 Penny Singh 503-365-2434 4 3004 Daisy Roberts 5 3005 William Martin 503-645-6434 … … … … … 670 3670 Ethel Parson 503-755-7405 671 3671 Denise Bishop 503-905-9415

F Email Region s.ng1@mail.com Central South drob2@mail.com East Wm2@mail.com West … … epars@gmail.com North dbisho@msn.com Central

G Sales $234.13 $1273.11 $2234.43 $254.17 $8233.34

Line 671 is the last record in the spreadsheet. What are the Excel formulas that calculate the number of customers who don't have any sales? Select all that apply. A) =COUNT(G2:G671, "") B) =COUNTIF(G2:G671,"") C) =COUNTBLANKS(G2:G671) D) =COUNTIFS(G2:G671, "") Answer: B, C, D Explanation: A will count all lines between G2 and G671. Diff: 3 LO: 2-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 71) You have an extract of the sales data from the last three fiscal years. The extract is a spreadsheet with the following columns: Sales Date, Sales Order ID, Sales Amount, Product, and Sales Region. How would you determine the total sales by sales region for the last fiscal year? Select all that apply. A) Set Sales Region as rows, set Sum of Sales Amount as values, and set Sales Date as Filters. B) Set Sales Region as rows, set Sales Date as Columns, and set Sales Amount as Filters. C) Set Sales Region as rows, set Sales Date as Columns, and use Sales Amount as Slicers. D) Set Sales Region as rows, set Sum of Sales Amount as values, and use Sales Date as Slicers. Answer: A, D Explanation: B and C doesn't sum the Sales Amounts. Diff: 3 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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72) You have an extract of the sales data from the last three fiscal years. The extract is a spreadsheet with the following columns: Sales Date, Sales Order ID, Sales Amount, Product, and Sales Region. How would you determine the top 10 sales regions that have the highest total sales? Select all that apply. A) Set Sales Region as rows, set Sum of Sales Amount as values, and in the Sum of Sales Amount column, apply a filter for the top 10 by Sum of Sales Amount. B) Set Sales Region as rows, set Sum of Sales Amount as values, and in the Sales Region column, apply a filter for the top 10 by Sum of Sales Amount. C) Set Sales Region as rows, set Sum of Sales Amount as values, and sort by the Sum of Sales Amount column and observe the top 10 Sales Regions D) Set Sales Region as rows, set Sum of Sales Amount as values, and in the Sum of Sales Amount column, apply a filter for the top 10 by Sales Region. Answer: B, C Explanation: A and D does not support filters on the Sum by Sales Amount column. Diff: 3 LO: 2-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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73) The following scatter chart was created to show employee salaries by tenure.

Select all that apply. With respect to salary values, the results of the scatter chart show that A) the standard deviation is low. B) the standard deviation is high. C) the mean and median have similar values. D) the mean is higher than the median. Answer: B, D Explanation: The standard deviation is high since the values are spread over a large range. The mean is higher than the median since there are some outliers that are pushing the mean to be high. Diff: 2 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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74) Select all that apply. When measuring the shape of the data distribution, A) a negative skew refers to a longer tail on the left side of the distribution. B) a positive skew refers to a longer tail on the right side of the distribution. C) a negative skew refers to a longer tail on the right side of the distribution. D) a positive skew refers to a longer tail on the left side of the distribution. Answer: A, B Explanation: A negative skew refers to a longer tail on the left side of the distribution, and a positive skew refers to a longer tail on the right side of the distribution. Diff: 1 LO: 2-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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75) You are a financial analyst, and you are reviewing supplier performance for the procurement department. The suppliers' credit rating is part of the key performance indicators. A histogram chart showing distribution of supplier credit ratings is provided. What conclusions can be made? Select all that apply.

A) The bin range is in increments of 5. B) The bin range is in increments of 4. C) The coefficient of skewness is positive. D) The coefficient of kurtosis is less than 1. Answer: A, C Explanation: The bin range is in increments of 5. For example, 60-64, 65-69, etc. Since there is a positive skew, the coefficient of skewness is positive. Diff: 2 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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76) Broadway Luxury Motors sells luxury cars. What would be an expected data correlation? Select all that apply. A) Annual rainfall values will have a negative correlation with luxury convertible vehicles sales. B) Annual rainfall values will have a positive correlation with luxury convertible vehicles sales. C) Average temperature values will have a negative correlation with luxury convertible vehicles sales. D) Average temperature values will have a positive correlation with luxury convertible vehicles sales. Answer: A, D Explanation: High annual rainfall values will weaken convertible sales. Warmer temperatures would strengthen convertible sales. Diff: 2 LO: 2-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 77) You have grouped accounts receivables into aging buckets. The buckets are 0 to 30 days, 31 to 60 days, 61 to 90 days and greater than 90 days. To show accounts receivables distributions in these buckets, what data visualizations would be the most appropriate to use? Select all that apply. A) Histogram charts B) Line charts C) Scatter charts D) Bubble charts Answer: A, B Explanation: A histogram and a line chart are effective visualizations to show distributions. A histogram and a line chart are effective visualizations to show distributions. Diff: 2 LO: 2-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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78) Closets Plus is a manufacturer of several closet products. All the parts that are used to build the closets are stored in the BillofMaterials table. The InventoryData table tracks all parts available in inventory. BillofMaterials ProductNumber ItemNumber PartNumber Quantity InventoryData PartNumber QuantityOnHand StorageLocation BillofMaterials is the left table and InventoryData is the right table. A left join between BillofMaterials and InventoryData can be used to answer the following questions. Select all that apply. A) Which products have missing part numbers in inventory? B) How many products can be made given the available part numbers in inventory? C) Are there any part numbers in inventory that are not part of a product? D) How many additional parts need to be ordered to fulfill a customer order? Answer: A, B, D Explanation: C would require a right join. Diff: 3 LO: 2-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 79) What is the difference between exploratory data visualization and explanatory data visualization? Provide an accounting example for each type of data visualization. Answer: Exploratory data visualization is used to examine data to uncover patterns, trends, or anomalies, whereas explanatory data visualization is used to explain the results of an analysis, show relationships in the data, and communicate insights. Exploratory data visualization can be used to look at employee expense to detect any anomalies for possible fraud. Explanatory data visualization can be used to show sales trends to see if there any seasonality in sales throughout the year. Diff: 2 LO: 2-5 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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118) Business travel presents a large portion of expenses for Global Reach Consulting. ProjectMaster (left table) lists all projects and their budget. ExpenseData (right table) tracks employee expenses for each project. ProjectMaster ProjectID ProjectName TotalBudget TeamMemberCount ExpenseData ProjectID EmployeeID ExpenseDescription Amount TransactionDate What questions can be answered using the following join types? • a left join • a right join • an inner join Answer: Left join: What is the total expense for all projects? Right join: What expense transactions don't have any matching projects? Inner join: What projects have expenses associated to it? Diff: 2 LO: 2-1 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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119) Business travel presents a large portion of expenses for Global Reach Consulting. ProjectMaster (left table) lists all projects and their budget. ExpenseData (right table) tracks employee expenses for each project. ProjectMaster ProjectID ProjectName TotalBudget TeamMemberCount ExpenseData ExpenseID ProjectID EmployeeID ExpenseDescription Amount TransactionDate What is meant by a primary key? What are the primary keys for each of these tables? What is meant by a foreign key? What are the foreign keys for each of these tables? Answer: The primary key is the column which must have a unique value for each row in the table. The ProjectID is the primary key for ProjectMaster and ExpenseID is the primary key to ExpenseData. The foreign key contains the same data as a primary key from another table. It is repeated in this table so the tables can be linked in relationship to each other. There are no foreign keys in the ProjectMaster table. ProjectID and EmployeeID are foreign keys in the ExpenseData table. Diff: 2 LO: 2-1 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 82) What is the difference between coefficient of skewness and coefficient of kurtosis? What can be interpreted if the coefficient of skewness is greater than 1? What can be interpreted if the coefficient of kurtosis is greater than 3? Answer: The coefficient of skewness measures the skewness of a distribution whereas the coefficient of kurtosis determines how peaked or flat a histogram of the data is. If the coefficient of skewness is greater than 1, there is a high degree of skewness. If the coefficient of kurtosis is greater than 3, the data is somewhat peaked with less dispersion. Diff: 1 LO: 2-4 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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120) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheetof the sales order table:

1 2 3 4 5 … 2029 2030

A B SalesID Product 203211 Premium 203212 Economy 203213 Luxury 203214 Luxury … … 205304 Economy 205303 Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Qty 20 40 13 15 … 33 40

F UnitPrice $45,100 $25,200 $76,000 $76,900 … $23,100 $42,700

What are the four components of a pivot table? How do you summarize the data as a pivot table to determine the count of sales transaction for each product within each location in 2022? What data elements would be represented for each component in the pivot table? Answer: The four components to a pivot table are columns, rows, values, and filters. The columns would be Location, the rows would be Product, the values would be Count of Sales ID, and the filters would be the Sales Dates in 2022. Alternatively, the columns would be Product, the rows would be Location, the value would be Count of Sales ID, and the filters would be the Sales Dates in 2022. Diff: 2 LO: 2-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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121) Eagle Wings Motors is an automobile manufacturer. The sales order data has been extracted from their ERP system and exported into an Excel table. Consider the following Excel worksheetof the sales order table:

1 2 3 4 5 … 2029 2030

A SalesID 203211 203212 203213 203214 … 205304 205303

B Product Premium Economy Luxury Luxury … Economy Premium

C Location NY CA FL CA … MA LA

D SalesDate 2021-02-02 2022-01-07 2022-03-14 2022-03-16 … 2022-11-16 2022-12-17

E Total Sales $451,100 $253,200 $363,000 $732,800 … $233,400 $143,700

Discuss two approaches within Excel that can be used to calculate the total sales of luxury cars in the state of Louisiana. Answer: 1. Create a pivot table with the column and row being blank, set the value as Sum of Total Sales, and set filters for Location to be "LA" and Product to be "Luxury" 2. Create an Excel formula to be =SUMIFS(E2:E2030, C2:C2030, "LA", B2:B2030, "Luxury") Diff: 2 LO: 2-2, 2-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 85) Define measure of central tendency. You are given a data set of the following numbers: 2, 3, 3, 3, 3, 4, 5, 6, 8, and 8. What are the three measures of central tendency. Using the values in the data set, what are the values of the three measures? Answer: A measure of central tendency is a single value that describes a set of data by identifying the central position within that data set. There are three measures of central tendency: mean, median and mode. The mean is 4.5, the mode is 3 and the median is 3.5. Diff: 1 LO: 2-4 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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86) What is the difference between variance and standard deviation? Compare the usefulness for interpreting dispersion. Answer: Variance is the average squared distance between the data points in the data set and the mean, whereas the standard deviation is the square root of the variance. Although variance is necessary to calculate standard deviation, standard deviation is a more useful measure. The standard deviation is in the same units as the mean, so it is easier to interpret and understand compared to variance. Diff: 2 LO: 2-4 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 87) Define Pearson Product Moment Correlation Coefficient. Explain the meaning behind the values for Pearson Product Moment Correlation Coefficient. Answer: Pearson Product Moment Correlation Coefficient measures the linear relationship between two variables. This measure is a numerical value between -1 and +1. If the value is close to +1, there is positive correlation which means that if one variable increases the other variable will increase as well. If the value is close to -1, there is negative correlation which means that if one variable increases the other variable will increase as well. Diff: 2 LO: 2-4 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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88) You are a financial analyst for Pizza 511. You are given the following tables from the ERP system. MenuItems ProductID ProductDescription Price SalesOrder SalesOrderID ProductID Quantity CustomerID TransactionDate Customer CustomerID CustomerName Street City State Phone 1. What are the primary keys for each of the tables? 2. What are the foreign keys for each of the tables? 3. What table joins would be used to determine the monthly sales total for all customers who placed an order. Indicate the type of join used. 4. What table joins would be used to determine if there are sales orders for products that are not in the MenuItems table? Indicate the type of join used. 5. What table joins would be used to determine the value of total sales. Indicate the type of join used. Answer: 1. MenuItems: ProductID SalesOrder: The combination of SalesOrderID and ProductID. Customer: CustomerID 2. MenuItems: None SalesOrder: ProductID, CustomerID Customer: None 3. SalesOrder inner join with Customer. 4. SalesOrder right join MenuItems. 5. SalesOrder inner join MenuItems. Diff: 2 LO: 2-1 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 123

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89) You are a financial analyst for Trillium Properties. A new rental housing construction project has been completed. The following data set was provided showing labor cost and materials cost by fiscal quarters. Period Year 1 Q1 Year 1 Q2 Year 1 Q3 Year 1 Q4 Year 2 Q1 Year 2 Q2 Year 2 Q3 Year 2 Q4 Year 3 Q1 Year 3 Q2 Year 3 Q3 Year 3 Q4

Labor Cost $ 155,340 174,463 180,489 183,213 199,454 189,905 237,363 228,720 215,349 191,311 178,447 140,073

Materials Cost $ 58,489 59,418 118,949 127,255 249,510 324,991 351,903 332,563 361,997 186,534 77,093 29,170

1. Identify an appropriate visualization to show the total cost of construction by period. The breakdown between labor cost and materials cost should also be shown in the same visualization. Explain your reasoning on why you chose this visualization. How would the data elements be shown on the visualization? 2. List three best practices for the visualization. Answer: 1. A stacked bar chart should be used since the visualization allows you to show the total cost over a time series. Since the labor cost and materials cost would be stacked, you can use the cost breakdown for each period. The y-axis should show the costs and x-axis should show the period. 2. • Use horizontal labels for better readability. • Space bars appropriately and consistently. • Use color sparingly or as an accent color. • Always have a zero baseline. Diff: 2 LO: 2-5 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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90) Holland Hospital is reviewing the depreciation policy of its medical equipment. They are currently using a straight-line depreciation approach. They are interested in how the yearly depreciation expense will be impacted if they change the policy to the declining balance depreciation or to the sum-of-the-years' digits depreciation. 1. Identify an appropriate visualization that compares the yearly depreciation expense for each of the three depreciation methods. Explain your reasoning on why you chose this visualization. How would the data elements be shown on the visualization? 2. List 3 best practices for the visualization. Answer: 1. A line chart should be used since the visualization allows you to compare depreciation expenses for each year. The y-axis should show the depreciation expense value and the x-axis should show the time in years. Each line on the chart should represent a different depreciation method. 2. • Time runs from left to right. • Be consistent in plotting time points. • Use solid lines not dotted. • Use a zero baseline. • Do not plot more than four lines, instead use multiple charts. Diff: 2 LO: 2-5 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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91) The manufacturing department for Crystal Lighting has provided you with the following area chart to show the product cost by fiscal quarters. The product cost consists of direct materials costs, direct labor costs and overhead costs. You are asked to review the data visualization.

1. List two best practices for this data visualization that are met. 2. Identify an improvement that can be made to the data visualization and explain why. Answer: 1. • The baseline starts at zero or above. In this case it starts at $95,000 which is fine. • There are no more than four categories used. In this case there are three. 2. Direct materials costs should be at the top of the stacked area since there is more variability in the data. The direct labor costs and overhead costs should be in the lower stacked area so it can be easily shown that the values are more constant. Diff: 2 LO: 2-5 Bloom: S Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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92) You are an auditor and need to assess the fair market value of your client's long term investment portfolio. A junior staff provided you with the following data visualization. You review the data visualization.

1. List one best practice for this data visualization that is met. 2. List two improvements that can be made to the data visualization and explain why. Answer: 1. There are no more than four categories used. In this case there are 4. 2. • The baseline should start at zero. In this case it starts at $30 which skews the interpretation of the data. • The time series should be consistent. Since the years are 1, 2, 5, 10, and 20, the data interpretation of the dates is skewed since the dates are not uniform. Diff: 2 LO: 2-4, 2-5 Bloom: S Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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93) Compass Partners is looking to increase the salaries for all of its staff. The distribution of salaries has been provided. You review the data visualization.

1. List two best practices for this data visualization and assess if they are met. 2. Does the distribution have a positive skew, negative skew or is it symmetrical? Please explain your answer. 3. Comment on the degree of the skewness and the coefficient of skewness value. Answer: 1. • Use a zero baseline — this is satisfied. • Bins are numbers that represent the intervals into — this is satisfied with salaries in intervals of $10,000. • Use between 5 to 15 bins — this is satisfied. 2. There is a positive skew since the data is right skewed (data tails off to the right). 3. Since the majority of salaries are in the first three bars of the salary bins, we can conclude that there is a high degree of skewness, and the coefficient of skewness value is expected to be greater than 1. Diff: 2 LO: 2-5 Bloom: AP Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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94) Solar Motors is a manufacturer of solar-powered vehicles. You are presented with the data visualization of the sales revenue by region. You are asked to review the data visualization.

1. List two best practices for this data visualization that are met. 2. Identify a best practice for this data visualization that is not met. 3. What data visualization should be used instead of a pie chart? How would the data elements be shown on the visualization? Answer: 1. • Make sure the data adds to 100%. • Start the first segment at 12 o'clock position. 2. Limit the chart to a max of five segments. The visualization has 6 segments. 3. A bar chart can be used to show sales regions and their corresponding sales. The y-axis should show the sales revenue value and the x-axis should show the sales regions. Diff: 2 LO: 2-5 Bloom: AP Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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95) You are an internal auditor for Humber Hospital. Employees at the hospital have purchasing authorizations. Before suppliers are paid, there needs to be a 3-way match, meaning that the quantity on the purchase order (PO), invoice, and goods receipt must match. You are provided with the following tables to run your audit tests. Note that for every OrderID, InvoiceID and GoodsReceiptID, there can be multiple line numbers. POData OrderID LineNumber ProductNumber Price Quantity EmployeeID POData SupplierID InvoiceData InvoiceID OrderID LineNumber ProductNumber Price Quantity SupplierID InvoiceDate GoodsReceiptData GoodsReceiptID LineNumber EmployeeID ProductNumber Quantity GoodReceiptDate PackingSlipNumber SupplierID Employee EmployeeID FirstName LastName AuthorizationRole AuthorizationLimit

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Supplier SupplierID SupplierName Street City State PhoneNumber 1. What are the primary keys for each of the tables? 2. What are the foreign keys for each of the tables? 3. What table joins would be used to determine if the employee has authorization to create the purchase order? Indicate the type of join used. What fields would be used in the join? What fields do you need from the table(s) to be able to complete this test? 4. What table joins would be used to determine which invoice should not be paid yet? Indicate the type of join used. Answer: 1. POData: The combination of OrderID and LineNumber. InvoiceData: The combination of InvoiceID and LineNumber GoodsReceiptData: The combination of GoodsReceiptID and LineNumber Employee: EmployeeID Supplier: SupplierID 2. POData: EmployeeID, SupplierID InvoiceData: OrderID, SupplierID GoodsReceiptData: EmployeeID, SupplierID Employee: None Supplier: None 3. POData inner join with Employee. EmployeeID in both tables will be used in the join. The price and quantity from the POData would be used to ensure that price multiplied by quantity is less than the AuthorizationLimit from the Employee table. The AuthorizationRole field from the Employee table will also make sure the Employee has the authorization to create the purchase order 4. There would be two joins to InvoiceData. InvoiceData left outer join GoodsReceiptData and InvoiceData left outer join POData. InvoiceData would be the left table and GoodsReceiptData and InvoiceData would be the right tables. Diff: 3 LO: 2-1 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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96) You are a tax accountant. You need to calculate the capital gains from your client's investment account. Some of the investments are in foreign currencies. The foreign exchange rate needs to be applied to the purchase and sale of the investment. You are given the following tables. TradingTransactions TransactionID BuyOrSell StockSymbol Currency Quantity Price TransactionDate ForeignExchange Date Currency Rate 1. What are the primary keys for each of the tables? 2. What are the foreign keys for each of the tables? 3. What fields will you use to join the tables? 4. What type of join will be used? 5. Which fields will you need to gather the information to determine the capital gain? Answer: 1. TradingTransactions: TransactionID ForeignExchange: The combination of Date and Currency. 2. TradingTransactions: Currency and TransactionDate ForeignExchange: None 3. The Currency and TransactionDate fields from the TradingTransactions table will be used to join with Currency and Date from ForeignExchange. 4. An inner join can be used, assuming that the ForeignExchange table has a complete set of currencies and daily rates. 5. All the fields in the TradingTransactions should be used as well as the Rate field from ForeignExchange. Diff: 3 LO: 2-1 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 97) Button Trust Realtors had 72 home sales over the year. You are interested in determining the 132

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distribution of home prices. Descriptive Statistics in Excel was used to analyze the home prices. The results are as follows: House Sales Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

610,387.7302 44,174.45832 558,583.7112 #N/A 374,832.7084 1.405E+11 11.5240843 3.221472449 2,305,168.243 205,710.5721 2,510,878.815 43,947,916.57 72

1. What conclusions can be made on the measure of central tendency? 2. What conclusions can be made on the measure of dispersion? 3. What conclusions can be made on the measure of shape? 4. If you are provided with the date of each sales transaction, what data visualization can be used to show the sales trend? How would the date and sales price be plotted on the data visualization? Answer: 1. The mean is $610,388 and the median is $558,583. Since the mean is much higher than the median, we can conclude that the home sales had data outliers and have influenced the mean to be a lot higher than the median. 2. The standard deviation is $374,832. Given that the mean is $610,388, we can conclude that the standard deviation is low since it's a lot lower than the mean. 3. The coefficient of skewness is 3.2 which indicates that there is a high degree of skewness. Since the value is positive, the data is right skewed (tails off to the right). Since the coefficient of kurtosis is greater than three, the data is somewhat peaked with less dispersion. 4. To show the sales trends over the year, a line chart or column chart can be used. The y-axis can show the home values, and the x-axis can show the sale date. Diff: 3 LO: 2-4, 2-5 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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98) You are a financial analyst at Steps Depot, a national retailer of shoes. You are asked to analyze the salaries of store managers. The Descriptive Statistic function in Excel was applied and the output are as follows: Salary Mean Standard Error Median Mode Standard Deviation Sample Variance Kurtosis Skewness Range Minimum Maximum Sum Count

74,851.11267 3,456.834684 87,047.00768 86,447.00768 25,636.57216 657,233,832 -0.51136098 -0.884381972 94,532.06303 18,176.59256 112,708.6556 411,6811.197 55

1. What conclusions can be made on the measure of central tendency? 2. What conclusions can be made on the measure of dispersion? 3. What conclusions can be made on the measure of shape? 4. If you are provided with the total revenue of each store, what data visualization can be used to show the relationship between the store revenue and store manager salaries? How would the store revenue and store manager salary be plotted on the data visualization? What data relationship would you expect to see? Answer: 1. The mean is $74,851 and the median is $87,047. Since the mean is lower than the median, we can conclude there are some lower salaries that are influencing the mean to be lower than the median. 2. The standard deviation is $25,637. Given that the mean is $74,851, we can conclude that the standard deviation is low since it's a lot lower than the mean. 3. The coefficient of skewness is -0.88 which indicates that there is a moderate degree of skewness. Note that if the absolute value of the coefficient of skewness is between 0.5 and 1, there is a moderate degree of skewness. Since the value is negative, the data is left skewed (tails off to the left). 4. A scatter chart can be used to show the relationship between the store revenue and the store manager's salary. The total revenue can be on the y-axis and the salary can be on the x-axis. We would expect that there is a positive correlation between store revenues and store manager salaries. So higher revenue should correspond with higher salaries. This data relationship may not be true for all instances but any data point that fall outside of this expectation can be further investigated. Diff: 3 LO: 2-4, 2-5 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 99) Jupiter Technologies is a producer of smart phones. The sales units were plotted for early 134

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adopters of new technologies and for the main market. A new phone was launched in month 1.

1. For the main market what is the data relationship between sales units and month? Discuss the possible correlation coefficient value. 2. For early adopters what is the data relationship between sales units and months? Discuss the possible correlation coefficient value. 3. Discuss two data visualizations that can be used to show total sales unit per month and also show the breakdown of sales by early adopters. Answer: 1. There is a strong positive linear relationship between months and sales units. As months increased, the sales units increased. The correlation coefficient value will be close to +1. It is not a perfect positive linear relationship since the sale units decreased in the 11th and 12th months. 2. There is a strong negative linear relationship between months and sales units. As months increased, the sales units decreased. The correlation coefficient value will be close to -1. It is not a perfect negative linear relationship since the sales units decreased in the 1st and 2nd months. 3. A stack bar chart can be used to show total sales by month. Sales units by early adopters can be stack on top of the sales units by the main market. The y-axis will show the sales units and the x-axis will show the months. An area chart can be used to show total sales by month. Sales units by early adopters can be shown as an area on top of the sales units by the main market. The y-axis will show the sales units and the x-axis will show the months. Diff: 3 LO: 2-4, 2-5 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 100) You are a financial analyst for Trillium Properties. A new rental housing construction project 135

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has been completed. The following data set was provided showing labor cost and materials cost by fiscal quarters. Period Year 1 Q1 Year 1 Q2 Year 1 Q3 Year 1 Q4 Year 2 Q1 Year 2 Q2 Year 2 Q3 Year 2 Q4 Year 3 Q1 Year 3 Q2 Year 3 Q3 Year 3 Q4

Labor Cost $ 155,340 174,463 180,489 183,213 199,454 189,905 237,363 228,720 215,349 191,311 178,447 140,073

Materials Cost $ 58,489 59,418 118,949 127,255 249,510 324,991 351,903 332,563 361,997 186,534 77,093 29,170

1. Identify an appropriate visualization to compare the labor cost and material cost by period. Explain your reasoning. How would the data elements be shown on the visualization? 2. List three best practices for the visualization. 3. The correlation function in Excel generates the following output. Labor Costs Labor Costs Materials Costs

Materials Costs

1 0.888838397

Interpret the results of the output. Do the results make sense?

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Answer: 1. A line chart should be used since the visualization allows you to compare values over a time series. The y-axis should show the costs and the x-axis should show the period. The labor cost and materials cost would be separate lines on the chart. 2. • Time runs from left to right. • Be consistent in plotting time points. • Use solid lines not dotted. • Use a zero baseline. • Do not plot more than four lines, instead use multiple chart 3. Since the correlation coefficient value is close to 1, there is a strong positive linear relationship between labor cost and materials cost. So, when material cost increases, labor cost increases. This makes sense since there will be more costs associated to labor if there are more materials for construction. Diff: 2 LO: 2-4, 2-5 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 3 Motivations and Objectives for Data Analytics 1) In 2022, taxpayers saw increases in the cost of living. The inflation rate increased as a result and the IRS provided tax inflation adjustments for tax rate schedules. Your tax firm would like data analysis on how these changes will affect its tax clients. The motivation of the data analysis is to A) evaluate the tax firm's opportunities for increasing more tax clients. B) evaluate the impacts of these adjustments on the firm's clients. C) focus on problem-solving on getting more additional tax savings for the firm's clients. D) evaluate the process and conduct a performance assessment on the firm's financial impact. Answer: B Explanation: Professional issues and requirements involve ensuring compliance with new or upcoming regulations, laws, or changes on practices. Diff: 1 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) North Star Industries manufactures steel bearings for the automotive sector. Data analysis is needed to investigate if investing in a new machine will be a good return on investment (ROI). The motivation of the data analysis is to A) evaluate opportunities for increasing production output. B) evaluate the impacts of the professional issues and requirements related to new legislation in the automotive industry. C) problem-solve for why production output is low. D) evaluate the manufacturing process and conduct a performance assessment on financial efficiencies. Answer: A Explanation: Opportunities involve new, potentially advantageous occasions or channels. Diff: 1 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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3) Bid and Buy is an online platform that allows users to bid on customer products. Bid and Buy require users to add their shipping information. Data analysis of users' shipping information revealed incomplete and incorrect addresses. The motivation of the data analysis was to A) evaluate marketing opportunities. B) evaluate professional issues and requirements related to the Sarbanes—Oxley Act (SOX). C) problem-solve for why data input controls were not being fully executed. D) evaluate the process and conduct a performance assessment of payment operations. Answer: C Explanation: Problem solving looks at risks and issues around clients, technologies, employees, operations, and supply chains. Diff: 1 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 4) At Panther Shoes, returns and allowances have been increasing over the last two years. Investments have been made to increase resources available for improved quality control. A data analysis is required to evaluate the effects of these investments. The motivation of the data analysis is to A) evaluate opportunities for increasing production output. B) evaluate professional issues and requirements. C) problem-solve for why returns and allowances are high. D) conduct a performance assessment and evaluate the impact on production and quality control processes from its investments. Answer: D Explanation: Process and performance assessment involves regular inspection of operational efficiency and effectiveness. Diff: 1 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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5) There are different types of motivations in data analytics projects. An example of a professional issues and requirements motivation would be A) analyzing how new proposed capital gain tax rates will affect financial statements. B) determining the appropriate calculation for the allowance of doubtful accounts. C) analyzing whether to outsource its IT functions or keep these functions in-house. D) analyzing your company's stock prices in comparison to other competitors in the industry. Answer: A Explanation: Professional issues and requirements involves ensuring compliance with new or upcoming regulations, laws, or changes in practices. Diff: 2 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 6) There are different types of motivations in data analytics projects. An example of an opportunity motivation would be A) analyzing how new proposal capital gain tax rates will affect financial statements. B) determining the appropriate calculation for allowance of doubtful accounts. C) analyzing whether to outsource its IT functions or keep the function in-house. D) analyzing your stock prices and comparing them to other competitors in the industry. Answer: A Explanation: Opportunities involve new, potentially advantageous occasions or channels. Diff: 2 LO: 3-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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7) Peaks Consulting provides IT consulting nationally. Its consultants travel significantly for work. The fiscal year has ended. Management budgeted $1.25 million for business travel but actual business travel totaled $1.85 million. What would be the motivation and the objective for analyzing the business travel spend? A) The motivation is to understand which consultants are compliant with the firm's travel policies. The objective is to identify which consultants are not in compliance with the travel policies. B) The motivation is to identify gaps in the travel policy. The objective is to identify the factors driving the large variances in travel expenses. C) The motivation is to avoid any fraud risks. The objective is to identify internal controls that should be implemented. D) The motivation is to understand why there is a large variance between budgeted versus actual amounts. The objective is to identify the factors driving large variances in travel expenses. Answer: D Explanation: Motivation in data analytics in accounting is the reason the analysis is being performed and the objective is the goal of the data analysis. Diff: 2 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 8) Diamond Coast Partners is a full-service accounting firm that offers tax, assurance, and management consulting. The cost accounting department would like to allocate HR costs these three divisions. HR is a supporting department for all divisions. Data analysis is needed for this project. What would be the motivation and the objective for the data analysis? A) The motivation is to understand how allocating HR costs will affect each divisions' profitability. The objective is to identify how much HR costs should be allocated to each division. B) The motivation is to understand how much HR costs should be allocated to each division. The objective is to determine how allocating HR costs will affect each division's profitability. C) The motivation is to improve each division's profitability. The objective is to identify how much HR costs should be allocated to each division. D) The motivation is to understand how allocating HR costs will affect each division's profitability. The objective is to reduce each division's operating costs. Answer: A Explanation: Motivation in data analytics in accounting is the reason the analysis is being performed and the objective is the goal of the data analysis. Diff: 2 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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9) Blaze Scooters is a manufacturer of electric scooters. Process costing is used to calculate the work-in-process ending inventory. You are a cost accountant and need to analyze the differences between using the FIFO method and the weighted-average method for calculating work-in-process ending inventory. What would be the motivation and the objective for the data analysis? A) The motivation is to determine if job costing or process costing should be used. The objective is to calculate the work-in-process ending inventory for each inventory costing method. B) The motivation is to understand how using these two inventory costing methods will affect the balance sheet. The objective is to calculate the work-in-process ending inventory under each inventory costing method. C) The motivation is to understand how using the two inventory costing methods will affect the financial statements. The objective is to calculate which inventory method generates a higher work-in-process ending inventory value. D) The motivation is to understand how using the two inventory costing methods will affect the balance sheet. The objective is to calculate which inventory method generates a lower work-in-process ending inventory value. Answer: B Explanation: Motivation in data analytics in accounting is the reason the analysis is being performed and the objective is the goal of the data analysis. Diff: 2 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 10) The airline industry has been hit with an increasing number of cyber-attacks. You are a data analyst for Turbo Airlines and senior management has requested a report analyzing cyber-attack trends. The stakeholders in this analysis from highest to lowest are A) senior management, chief information officer, IT security team, customers, and investors. B) senior management, IT security team, chief information officer, investor, and customers. C) chief information officer, IT security team, senior management, investors, and customers. D) investors, customers, chief information officer, IT security team, senior management. Answer: A Explanation: Senior management is the main stakeholder since they are asking for the report. Investors are low since they will not see the report. Diff: 2 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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11) Orange Systems produces video conferencing equipment. The COVID pandemic has caused a shortage of computer chips that are needed for their products. Data analytics are needed to determine financial projections based on production output and sales demand. The stakeholders in this analysis from highest to lowest are A) production department, computer chip suppliers, chief financial officer, and customers. B) production department, finance managers, investors, and customers. C) chief financial officer, production department, and computer chip suppliers. D) production department, chief financial officer, and customers. Answer: B Explanation: Production department, finance managers, investors, and customers. Diff: 2 LO: 3-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 12) A college intern joined the data analytics team. You need to explain to the student the difference between motivation and objective in data analytics projects. What is your response? A) Motivation is the goal of the data analysis, and the objective is what the project is trying to accomplish. B) Motivation is the goal of the data analysis, and the objective is the reason the analysis is being performed. C) Motivation is the reason the analysis is being performed and objective is what the project is trying to accomplish. D) Motivation is the reason the analysis is being performed, and the objective is what you are trying to prove in your analysis. Answer: C Explanation: Motivation in data analytics in accounting is the reason the analysis is being performed and the objective is the goal of the data analysis. Diff: 1 LO: 3-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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13) The four common motivators for data analytics in accounting are A) professional issues and requirements, problem solving, opportunities, and financial performance evaluation. B) cost savings, problem solving, opportunities, and process and performance assessment. C) professional issues and requirements, Cost savings, financial compliance, and process and performance assessment. D) professional issues and requirements, problem solving, opportunities, and process and performance assessment. Answer: D Explanation: Professional issues and requirements, problem solving, opportunities, and process and performance assessment are the motivations for data analytics in accounting. Diff: 1 LO: 3-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 14) Market Plus is a startup technology company that provides e-commerce capabilities to businesses who want an online storefront. Senior Management has asked you to perform data analysis on the cash flow trends since they are concerned about meeting its immediate financial obligations. What descriptive questions can be asked in this data analysis? A) How does cash flow from operations compare with cash flow from financing? B) Should cash flow from financing activities be increased to increase cash balances? C) Do we expect cash flow to increase in the next fiscal quarter? D) Will cash outflow from investment activities generate cash inflows in the long term? Answer: A Explanation: Descriptive questions focus on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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15) Primo Pies is a chain of pizza restaurants. A data analysis is required to determine why operating income has been decreasing given that revenue has been steady. What descriptive questions can be asked in this data analysis? A) Is there a correlation between increases in marketing expense and increased revenue? B) How would closing down a restaurant with low operating income affect the company's overall performance? C) Has there been an increase in employee compensation which has increased operating expenses? D) How would increasing menu prices by 10% affect operating income? Answer: C Explanation: Descriptive questions focus on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 16) Blaze Scooters is a manufacturer of electric scooters. Warranty expenses have been increasing for each quarter in the last fiscal year. The descriptive question is "Which electric scooter models contributed to the increased warranty expenses?" What measures can be used to answer the question? A) The percentage of products returned for repairs for each scooter model B) The total sales for each scooter model C) The percentage change of labor costs compared with the prior quarter D) The projected warranty expense for each model for the next fiscal year Answer: A Explanation: This measure focuses on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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17) Roadstar Motors manufactures both gasoline-powered and electric-powered vehicles. In the last five years, gasoline-powered vehicles sales have declined, and electric-powered vehicles sales have increased but overall net income has decreased. If the descriptive question is "What factors are causing net income to decrease?", what measures can be used for this analysis? A) The cash flow values from financing operations from each vehicle B) The operating margin percentage for each year for each vehicle C) Percentage changes in ending inventory values for each vehicle D) Production capacity for each vehicle model Answer: B Explanation: This measure focuses on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 18) Dipped offers specialty donuts and has several locations. Expenses have been increasing. If the descriptive question is "Which expenses are driving the increases in total expenses?", what measures can be used for this analysis? A) Average wage of employees B) Percentage changes in production output C) Percentage changes in sales demand D) Percentage changes in overhead costs Answer: A Explanation: This measure focuses on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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19) To answer descriptive questions in a data analysis project, possible measures include A) the calculation of median, calculation of variance, and projected percentage changes in future periods. B) the calculation frequency measures, calculation of mode, and what-if scenarios. C) the calculation of mode, calculation of variance, and calculation of correlation coefficients. D) the calculation of mean, calculation of standard deviation, and percentage changes compared to the prior period. Answer: D Explanation: These measures focus on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 20) Data analytics are used to audit employee travel expenses for possible fraud. The descriptive question is "What transactions should be investigated for potential fraud?" What measure would be most useful to answer this question? A) The frequency of transactions for each airline used B) The average value of employee expense reports C) The variance between an employee's expenses and the average expense report D) The mean value and standard deviation of dining transactions Answer: C Explanation: This measure focuses on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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148) OfficePlus sells office furniture to businesses. They want to understand if accounts receivablecollections are a problem for the company. The following spreadsheet is provided, and it shows invoices by customers and shows which invoices have been paid. Customer ID

Invoice ID

203211 203212 203213 203211 …

INV204312 INV204333 INV204345 INV206311 …

Invoice Date 2021-02-02 2022-01-07 2022-03-14 2022-03-16 …

Invoice Amount $15,110 $25,200 $76,000 $76,900 …

Payment Amount $0 $25,200 $70,000 $0 …

What would be the objective of the analysis? A) To determine if there are accounts receivables that present a collection risk. B) To determine which customers have the highest accounts receivable balances. C) To determine if the amount in the allowance for doubtful accounts is adequate. D) To determine the values for the accounts receivable turnover ratio. Answer: A Explanation: The objective is the goal of the data analysis. The goal is to determine if there are accounts receivables that present a collection and therefore a financial statement risk. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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149) OfficePlus sells office furniture to businesses. They want to understand if accounts receivablecollections are a problem for the company. The following spreadsheet is provided, and it shows invoices by customers and shows which invoices have been paid. Customer ID

Invoice ID

203211 203212 203213 203211 …

INV204312 INV204333 INV204345 INV206311 …

Invoice Date 2021-02-02 2022-01-07 2022-03-14 2022-03-16 …

Invoice Amount $15,110 $25,200 $76,000 $76,900 …

Payment Amount $0 $25,200 $70,000 $0 …

If the objective is to determine which customers have the highest overdue accounts receivable balances, what should be a descriptive question that would be relevant to the objective? A) Who are the customers that have the highest invoice totals? B) Who are the customers that have the highest overdue accounts receivable dollar amounts? C) Who are the customers that have the highest invoice counts? D) Who are the customers that have the highest average days delinquent? Answer: B Explanation: The objective is the goal of the data analysis. The goal is to determine which customers have the highest overdue accounts receivable dollar values. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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150) OfficePlus sells office furniture to businesses. They want to understand if accounts receivablecollections are a problem for the company. The following spreadsheet is provided, and it shows invoices by customers and shows which invoices have been paid. Customer ID 203211 203212 203213 203211 …

Invoice ID INV204312 INV204333 INV204345 INV206311 …

Invoice Date 2021-02-02 2022-01-07 2022-03-14 2022-03-16 …

Invoice Amt $15,110 $25,200 $76,000 $76,900 …

Payment Amount $0 $25,200 $70,000 $0 …

If the descriptive question is "Have overdue accounts receivable balances increased for each month?", what analysis can be used to answer this question? A) Analysis showing the total overdue accounts receivable balance for each month on a bar or a line chart B) Analysis showing the total receivable balance for each month in a pivot table C) Analysis showing the overdue accounts receivable balance for each month in a pie chart D) Analysis showing the total overdue accounts receivable balance compared to sales transactions Answer: A Explanation: A bar or line chart will show if overdue accounts receivable balances have increased or decreased by month. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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24) Highlands University's accounting department is doing an internal audit of vendor payments. They want to understand if there are any fraud risks associated with vendor payments. A spreadsheet is provided, and it shows the payments by customers and which invoices have been paid. Vendor ID

Vendor Name

Vendor Address

342322 342334 N/A 342522 N/A …

OfficePlus Ltd GlassWorks Painters Pros Signs INV204345 …

234 Main St… Box 343, 35 Rob Ave… Box 334, 9 State St…. 553 Franklin Ave …. 3043 Broadway Ave…. …

Payment Date 2021-02-02 2022-01-07 2022-03-14 2022-03-16 2022-03-14 …

Payment Amount $15,110 $25,200 $76,000 $76,900 $76,000 …

What would be the motivation and objective of this data analysis? A) The motivation is to determine if there is a financial risk related to vendor payments. The objective is to identify which vendors present the highest financial risks. B) The motivation is to be compliant with internal auditing. The objective is to determine if there is a financial risk related to vendor payments. C) The motivation is to determine if there is a financial risk related to vendor payments. The objective is to identify if there are any vendors or transactions that are fraudulent. D) The motivation is to identify if there are any vendors or transactions that are fraudulent. The objective is to be compliant with internal auditing. Answer: C Explanation: Motivation in data analytics in accounting is the reason the analysis is being performed and objective is the goal of the data analysis. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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152) Highlands University's accounting department is doing an internal audit of vendor payments. They want to understand if there are any risks associated with vendor payments. A spreadsheet is provided, and it shows the payments by customers and which invoices have been paid. Vendor ID Vendor Name Vendor Address Payment Payment Date Amount 342322 OfficePlus Ltd 234 Main St… 2021-02-02 $15,110 342334 GlassWorks Box 343, 35 Rob Ave… 2022-01-07 $25,200 N/A Painters Pros Box 334, 9 State St…. 2022-03-14 $76,000 342522 Signs 553 Franklin Ave …. 2022-03-16 $76,900 N/A INV204345 3043 Broadway Ave…. 2022-03-14 $76,000 … … … … … If the objective is to determine which vendors present a higher risk of fraud what should be a descriptive question that would be relevant to the objective? A) What is the total amount of payments to each vendor? B) Which vendors have an address that match an employee's address? C) Which payments have been made outside of the vendor's payment terms? D) Which vendors have the highest number and total amount of payments? Answer: B Explanation: Vendor addresses should not match employee addresses. Diff: 3 LO: 3-2 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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153) Highlands University's accounting department is doing an internal audit of vendor payments. They want to understand if there are any risks associated with vendor payments. A spreadsheet is provided, and it shows the payments by customers and which invoices have been paid. Vendor ID Vendor Name Vendor Address Payment Payment Date Amount 342322 OfficePlus Ltd 234 Main St… 2021-02-02 $15,110 342334 GlassWorks Box 343, 35 Rob Ave… 2022-01-07 $25,200 N/A Painters Pros Box 334, 9 State St…. 2022-03-14 $76,000 342522 Custom Signs 553 Franklin Ave …. 2022-03-16 $76,900 N/A INV204345 3043 Broadway Ave…. 2022-03-14 $76,000 … … … … … If the descriptive question is "Which vendors should be investigated for potential fraud?", what analysis can be used to answer this question? A) Count of vendors that don't have a valid vendor id and count of vendors who have an address that matches an employee address. B) Determine which vendors have a large range of payment values. C) Determine which vendors have high percentage changes in total payments compared to the previous year. D) Determine the total payments to vendors that have a vendor id setup. Answer: A Explanation: Vendor addresses should not match employee addresses. Vendors without an id are not properly setup in the vendor master record so there is a higher risk of fraud. Diff: 3 LO: 3-2 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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27) Collins Properties operates rental apartments. It's fiscal year-end and the financial statements are being compared with budgeted values. These variances will show where the business has deviated from the budget. The CFO has asked you for a data analysis that will summarize the factors that are driving these variances. What would be the motivation and objective of this analysis? A) The motivation is to determine whether the financial statements meet investors' expectations. The objective is to identify which accounts have large variances. B) The motivation is to understand how the business performed against what was planned. The objective is to identify which accounts have large variances. C) The motivation is to understand how the business performed against what was planned. The objective is to determine if the financial statements met investors' expectations. D) The motivation is to ensure that the financial statements meet GAAP requirements. The objective is to determine which accounts present the highest financial risk. Answer: B Explanation: Motivation in data analytics in accounting is the reason the analysis is being performed and objective is the goal of the data analysis. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 28) Collins Properties operates rental apartments. It's fiscal year-end and the financial statements are being compared with budgeted values. The variances will show where the business has deviated from the budget. The CFO has asked you for a data analysis that will summarize the factors that are driving the variances. If the objective is to determine whether the financial statements were in line with the budget, what should be a descriptive question that would be relevant to the objective? A) What was the percentage variance between budgeted revenue and actual revenue? B) What was the percentage change between actual revenue of the current year versus the prior year? C) Did Collins Properties have a positive net income? D) What changes will be made to next year's budget? Answer: A Explanation: Descriptive questions focus on understanding what is currently happening or what has happened in the past. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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29) Collins Properties operates rental apartments. It's actual fiscal year-end financial statements are being compared with budgeted values. The variances will show where the business has deviated from the budget. The CFO has asked you for a data analysis that will summarize the factors that are driving the variances. If the descriptive question is "Which months of the year had actual expenses that were greater than budgeted expenses?", what analysis can best answer this question? A) A visualization showing percentage differences between actual expenses and budgeted expenses by expense line B) A clustered bar chart showing actual expenses and budgeted expenses by quarter C) A data table showing the actual expenses and budgeted expenses by month D) A clustered bar chart showing actual expenses and budgeted expenses by month Answer: D Explanation: A clustered bar chart will show variances between actual expenses and budgeted expenses by month. Diff: 2 LO: 3-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 30) A diagnostic question A) identifies a problem or issue to understand why an outcome occurred. B) is designed to gain a better understanding of data to answer business questions. C) asks what you want to know about what may happen in the future. D) investigates how to take advantage of future opportunities or mitigate a future risk outcome. Answer: A Explanation: A diagnostic question identifies a problem or issue so as to understand why an outcome occurred. Diff: 1 LO: 3-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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31) Descriptive questions A) identify a problem or issue to understand why an outcome occurred. B) are designed to gain a better understanding of data to answer business questions. C) ask what you want to know about what may happen in the future. D) investigate how to take advantage of future opportunities or mitigate a future risk outcome. Answer: B Explanation: Descriptive questions are designed to gain a better understanding of data to answer business questions. Diff: 1 LO: 3-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 32) Sundial Solar Industries manufactures solar panels. Although sales orders are high, production output has slowed down. A data analysis is needed to understand the production performance. What is a diagnostic question that can be asked in this data analysis? A) Are there any trends in inventory counts of raw materials? B) What is the total cost of raw materials for the year? C) If an underperforming supplier was replaced with a more reliable supplier, how would production output increase? D) Given the current trends, what are the sales projected to be for the next fiscal quarter? Answer: A Explanation: Diagnostic analytics determine why an outcome occurred by looking for anomalies, correlations, patterns, or trends. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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33) Aura Security manufactures smart locks that can be activated anywhere. They provide three models at different price points. Data analysis is needed, and the objective is to understand sales performance. What is a diagnostic question that can be asked in this data analysis? A) Which model had the greatest number of sales? B) Which sales regions look to have potential sales increases for next year? C) If marketing efforts increase, how would it affect sales? D) Is there any correlation between marketing spend and sales by model? Answer: D Explanation: Diagnostic analytics determine why an outcome occurred by looking for anomalies, correlations, patterns, or trends. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 34) Aura Security manufactures smart locks that can be activated anywhere. They provide three models at different price points. Data analysis is needed. If the diagnostic question is "What is causing production costs to increase?", what analyses will you use to answer the questions you developed? A) An analysis showing the correlation between production output and sales demand B) An analysis showing any patterns in material waste by production teams C) An analysis that determines production costs if the supplier was replaced with another supplier that has lower material costs D) A bar chart that compares the production costs for each of the models Answer: B Explanation: Common diagnostic analyses: anomaly detection, correlation (linear), pattern detection and trend analysis. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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35) You are an auditor and analytic procedures are needed to determine if there is any potential fraud in payroll expenses. What diagnostic question can be asked in this data analysis? A) Are there any data anomalies in payroll expenses? B) What is the percentage allocation of payroll expenses for each department? C) What is the average salary for each job function? D) What is the total amount of overtime pay? Answer: A Explanation: Diagnostic questions determine why an outcome occurred by looking for anomalies, correlations, patterns, or trends. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 36) You are an auditor and analytic procedures are needed to determine if there is any potential for fraud in payroll expenses. If the diagnostic question is "Is there are any unusual changes in the payroll expense for each payroll cycle?", what analyses will you use to answer the questions you developed? A) A pie chart showing the total payroll expense with each pay cycle as a slice B) A correlation analysis showing the relationship between payroll and sales revenue C) A line chart showing the total payroll expense for each payroll cycle D) A frequency distribution chart of the payroll expense values Answer: C Explanation: Common diagnostic analyses: anomaly detection, correlation (linear), pattern detection and trend analysis. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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159) Vista Education is an educational publisher of college textbooks. A visualization was createdto show sales and sales returns trends for the year as follows.

The visualization can be used to answer which diagnostic question? A) Are there any months that have unusual amounts of sales and sales returns? B) What are the total sales and sales returns that should be recorded during the year? C) What are the expected sales and sales return trends for next year given the trends shown for this year? D) What is the monthly average of sales and sales returns? Answer: A Explanation: Diagnostic questions determine why an outcome occurred by looking for anomalies, correlations, patterns, or trends. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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160) Vista Education is an educational publisher of college textbooks. A visualization was createdto show sales and sales returns trends for the year as follows.

If the diagnostic question is "Are there any identifiable trends in monthly sales returns?", what would be the correct answer? A) Yes, there is an identifiable trend in the sales return. There are high sales returns at the beginning of the year but the value decreases throughout the year. B) Yes, there is an identifiable trend in sales returns. There are high sales returns at the beginning of the year, but after February, the sales returns are more consistent. C) No, there is no identifiable trends in sales returns. The sales returns are variable throughout the year. D) Yes, there is an identifiable trend in sales returns. Sales returns are low in the summer months but are higher in the fall months. Answer: B Explanation: Diagnostic questions determine why an outcome occurred by looking for anomalies, correlations, patterns, or trends. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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39) Over recent years, employees were offered the option to work from home. Employees can submit expenses related to a home office. Employees were granted up to $750 per year to submit for reimbursement for home office expenses. Expense reports require a receipt for the purchase. A spreadsheet of home office expenses was provided. Employee ID 34120 34131 34152 34144 34221 …

Expense Category Furniture Equipment Supplies Equipment Furniture …

Submitted Date 2021-02-02 2022-01-07 2022-03-14 2022-03-16 2022-03-14 …

Expense Receipts Amount Status $334.30 Validated 131.50 N/A 34.23 Submitted 634.99 Submitted 781.80 Validated … …

If the objective is to determine if employees are compliant with the home office expense reimbursement policy, what would be a diagnostic question for the data analysis? A) What is the average expense submitted by an employee? B) What percentage of the employees submitted valid receipts? C) Are there any employee expenses where the amount is unusually high? D) What category of expenses represents the highest expense amount? Answer: C Explanation: Diagnostic questions determine why an outcome occurred by looking for anomalies, correlations, patterns, or trends. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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40) Over recent years, employees were offered the option to work from home. Employees can submit expenses related to a home office for reimbursement. Employees were granted up to $750 per year for home office expense reimbursement. Expense reports require a receipt for each expense. A spreadsheet of home office expenses was provided. Employee ID 34120 34131 34152 34144 34221 …

Expense Category Furniture Equipment Supplies Equipment Furniture …

Submitted Date 2021-02-02 2022-01-07 2022-03-14 2022-03-16 2022-03-14 …

Expense Amount $334.30 131.50 34.23 634.99 781.80 …

Receipts Status Validated N/A Submitted Submitted Validated …

If the diagnostic question is "Is there a correlation between the expense category and the expense amount?", what analyses can be used to best answer this question? A) A scatter plot graph can be used to show each expense amount by category. B) A pie chart can be used to show the proportion of total expense each category represents. C) A stacked bar chart showing the monthly total expense. The category totals are stacked within each month. D) A clustered bar chart showing the monthly totals for each category. Answer: A Explanation: Common diagnostic analyses: anomaly detection, correlation (linear), pattern detection and trend analysis. Diff: 2 LO: 3-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 41) A predictive question A) identifies a problem or issue to understand why an outcome occurred. B) is designed to gain a better understanding of data to answer business questions. C) asks what you want to know about what may happen in the future. D) investigates how to take advantage of future opportunities or mitigate a future risk outcome. Answer: C Explanation: A predictive question asks what you want to know about what may happen in the future. Diff: 1 LO: 3-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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42) Sundial Solar Industries manufactures solar panels. Although sales orders are high, production output has slowed down. A data analysis is needed to understand production performance. What is a predictive question that can be asked in this data analysis? A) Are there any significant trends in inventory counts of raw materials? B) What additional staff should be hired to increase production? C) If an underperforming supplier was replaced with a more reliable supplier, how would production output increase? D) Given the current trends, what is the projected production output for the next fiscal quarter? Answer: D Explanation: Predictive analytics use past and present data to forecast and create models that allow businesses to make predictions about the future. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 43) Sundial Solar Industries manufactures solar panels. Although sales orders are high, production output has slowed down. A data analysis is needed to predict production performance. What is a predictive question that can be asked in this data analysis? A) Are there any trends in inventory counts of raw materials? B) What is the total production for the year? C) If an underperforming supplier was replaced with a more reliable supplier, how would production output increase? D) Given the current trends, what is the production output projected to be for the next fiscal quarter? Answer: C Explanation: Predictive analytics use past and present data to forecast and create models that allow businesses to make predictions about the future. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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44) Nature Farms is a power generator of sustainable energy. They sell their power to businesses that are environmentally conscious. Data analysis is needed to project sales growth. What is a predictive question that can be asked in this data analysis? A) If the government increases subsidies by 10% to businesses using sustainable energy, would this change affect our sales? B) Two additional competitors have entered the market. How would that affect profitability? C) If Nature Farms expands to additional sales markets, what are the capital costs involved? D) Should Nature Farms invest in another power farm if sales growth continues? Answer: A Explanation: Predictive analytics use past and present data to forecast and create models that allow businesses to make predictions about the future. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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45) Advertising strategy has shifted with the rise of social media. Social media advertising now represents the majority of total advertising costs. A data analysis was conducted to show the correlation between social media advertising costs with sales over the past fiscal year. What is a predictive question that can be used based on the results of this data analysis?

A) If social media advertising costs were to increase during the summer months, would that make summer sales monthly revenue more consistent? B) If the sales revenue increased towards the end of the year, was it the result of increased social media advertising costs? C) If print media advertising was eliminated, how would that affect future sales revenue? D) If social media advertising costs increased next year, how would that affect profitability? Answer: A Explanation: Predictive analytics use past and present data to forecast and create models that allow businesses to make predictions about the future. Diff: 1 LO: 3-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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166) The Chef's Palate is a distributor of organic ingredients for the restaurant industry. Advertisinghas contributed to sales growth. A scatter plot is created to show the advertising cost and the associated sales for the advertising campaign.

Given the trend line, what would be a likely equation for predicting sales? A) Y = 0.05x + $800 B) Y = 16x + $2,000 C) Y = -16x + $2,000 D) Y = 0.05x - $800 Answer: B Explanation: Take a historic advertising cost value and apply it to x in the formula. E.g., y = 16 × $5,000 + $2,000 = $82,000. $82,000 would be a typical value given the historic values in sales. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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167) The Chef's Palate is a distributor of organic ingredients for the restaurant industry. Advertisinghas contributed to sales growth. A scatter plot is created to show the advertising cost and the associated sales for the advertising campaign.

What can be concluded from this visualization? A) There is a linear relationship between sales and advertising costs. An equation can be used to predict sales using advertising costs. B) There is no data relationship between sales and advertising costs. C) There is a linear relationship between sales and advertising costs, but an equation cannot be used to predict sales using advertising costs. D) There is no data relationship between sales and advertising costs, but an equation can be used to predict sales using advertising costs. Answer: A Explanation: There appears to be a linear relationship between sales and advertising costs, so we can predict sales using advertising costs. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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48) Vision Tech is a manufacturer of high-end televisions. Management would like to see if there is a linear relationship between quality assurance costs and warranty costs. A scatter plot is created to show the relationship between the two variables.

Given the trend line, what would be a likely equation to predict quality assurance costs? A) y = 0.03x + $6,000 B) y = -25x + $150,000 C) y = -0.03x + $6,000 D) y = 25x + $150,000 Answer: C Explanation: Take a historic cost value and apply it to x in the formula. E.g., y = -0.03 × $100,000 + $6,000 = $3,000. $3,000 would be a typical value given the historic values for quality assurance costs. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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49) Collins Realtors would like to predict home sales using a regression model. The regression model is based on historic values for certain variables. The regression statistics from Excel are provided below. Regression Statistics Multiple R 0.992439 R Square 0.984935 Adjusted R Square 0.983523 Standard Error 1.641107 Observations 36 ANOVA df

SS 5,634.567 86.18341 5,720.75

MS 1,878.189 2.693232

Regression Residual Total

3 32 35

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

F Significance F 697.3737 3.23E-29

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

What are the dependent variables and independent values in the regression model? A) Inventory count, unemployment rate, and mortgage rate are the dependent variables. Home sale count is an independent variable. B) Home sales count is a dependent variable. Inventory count, unemployment rate, and mortgage rate are the independent variables. C) Unemployment rate and mortgage rate are the dependent variables. Home sales count and inventory count are independent variables. D) Home sales count and inventory count are the dependent variables. The unemployment rate and mortgage rate are the independent variables. Answer: B Explanation: The ANOVA statistics show the independent variables. Diff: 3 LO: 3-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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50) Collins Realtors would like to predict home sales using a regression model. The regression model is based on historic values sales and certain contributing factors. The regression statistics from Excel are provided below. Regression Statistics Multiple R 0.992439 R Square 0.984935 Adjusted R Square 0.983523 Standard Error 1.641107 Observations 36 ANOVA df

SS 5,634.567 86.18341 5,720.75

MS 1,878.189 2.693232

Regression Residual Total

3 32 35

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

F Significance F 697.3737 3.23E-29

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

What can be interpreted from the Multiple R-value? A) Multiple R is the correlation coefficient, and the value is indicating a positive correlation between the dependent variable and the independent variables. B) Multiple R is the correlation coefficient, and the value is indicating that there is no correlation between the dependent variable and the independent variables. C) Multiple R is the correlation coefficient, and the value is indicating that 98.3% of the change in home sales counts is explained by the inventory count, unemployment rate, and mortgage rate. D) Multiple R is the coefficient of determination, and the value is indicating a positive correlation between dependent variables and independent variables. Answer: A Explanation: Multiple R is 0.992439 which is close to 1, so there is a positive correlation between dependent variables and independent variables. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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51) Collins Realtors would like to predict home sales using a regression model. The regression model is based on historic sales and certain contributing factors. The regression statistics from Excel are provided below. Regression Statistics Multiple R 0.992439 R Square 0.984935 Adjusted R Square 0.983523 Standard Error 1.641107 Observations 36 ANOVA df

SS 5,634.567 86.18341 5,720.75

MS 1,878.189 2.693232

Regression Residual Total

3 32 35

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

F Significance F 697.3737 3.23E-29

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

What can be interpreted from the R Squared value? A) The R Squared value is the correlation coefficient, and the value is indicating 98.5% of the change in home sales is explained by inventory count, unemployment rate, and mortgage ratevalues. B) The R Squared value is the correlation coefficient, and the value is indicating that there is no correlation between the dependent variable and the independent variables. C) The R Squared value is the coefficient of determination, and the value is indicating that 98.5% of the change in home sales is explained by the inventory count, unemployment rate, and mortgage rate. D) The R Squared value is the coefficient of determination, and the value is indicating that 98.5% of the inventory count, unemployment rate, and mortgage rate values can be explained by the home sales. Answer: C Explanation: The R Squared value is close to 1 which indicates that change in home sales is explained by the inventory count, unemployment rate, and mortgage rate. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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172) Collins Realtors would like to predict home sales using a regression model. The regressionmodel is based on historic values. The regression statistics from Excel are provided below. Regression Statistics Multiple R 0.992439 R Square 0.984935 Adjusted R Square 0.983523 Standard Error 1.641107 Observations 36 ANOVA df

SS 5,634.567 86.18341 5,720.75

MS 1,878.189 2.693232

Regression Residual Total

3 32 35

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

F Significance F 697.3737 3.23E-29

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

What can be interpreted from the Adjusted R Square value? A) Adjusted R Square explains how well the regression line fits the data. The value is indicatingthat there is not a close fit of the regression line to the data. B) Adjusted R Square explains how well the regression line fits the data. The value is indicating that 98.5% of the change in home sales is explained by the inventory count, unemployment rate, and mortgage rate. C) Adjusted R Square explains how well the regression line fits the data. The value is indicating that there is a close fit of the regression line to the data. D) Adjusted R Square measures the strength of the relationship between the dependent and the independent variables. The value is indicating a strong relationship between the dependent and the independent variables. Answer: C Explanation: Adjusted R Square explains how well the regression line fits the data. The value is close to 1 which indicates that there is a close fit of the regression line to the data. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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173) Collins Realtors would like to predict home sales using a regression model. The regressionmodel is based on historic values. The regression statistics from Excel are provided below. Regression Statistics Multiple R 0.992439 R Square 0.984935 Adjusted R Square 0.983523 Standard Error 1.641107 Observations 36 ANOVA df

SS 5,634.567 86.18341 5,720.75

MS 1,878.189 2.693232

Regression Residual Total

3 32 35

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

F Significance F 697.3737 3.23E-29

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

The mean for home sales count is 26.5 and the standard deviation is 12.78. What can be interpreted from the standard error value? A) The standard error represents the variability of the home sales from the values predicted by the model. The standard error is acceptable since it is smaller than the standard deviation. B) The standard error represents the variability of the home sales values from the values predicted by the model. The standard error is not acceptable since it is smaller than the standard deviation. C) The standard error represents the measure of how well the regression line fits the data. The standard error is not acceptable since it is smaller than the standard deviation. D) The standard error represents the measure of how well home sales are explained by the inventory count, unemployment rate, and mortgage rate values. The standard error is acceptable since it is smaller than the standard deviation. Answer: A Explanation: The standard error represents the variability of the home sales count values from the values predicted by the model. The standard error is acceptable since it is smaller than the standard deviation. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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174) Collins Realtors would like to predict home sales using a regression model. The regressionmodel is based on historic values. The regression statistics from Excel are provided below. Regression Statistics Multiple R 0.992439 R Square 0.984935 Adjusted R Square 0.983523 Standard Error 1.641107 Observations 36 ANOVA df

SS 5,634.567 86.18341 5,720.75

MS 1,878.189 2.693232

Regression Residual Total

3 32 35

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

F Significance F 697.3737 3.23E-29

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

What can be interpreted from the P-values for inventory count, unemployment, and mortgage rate? A) Since the values for each variable are greater than 0.05, the variables are not significant. We can conclude that the inventory count, unemployment rate, and mortgage rate values can explain the variations in the home sales. B) We can conclude the inventory count is least significant. Therefore, it should be removed from the regression model. C) We can conclude that the mortgage rate is the most significant variable. Therefore, the inventory count and unemployment rate variables should be removed from the regression model. D) Since the value for each variable is less than 0.05, the independent variables are significant. We can conclude that the inventory count, unemployment rate, and mortgage rate values can explain the variations in home sales. Answer: D Explanation: P-value is a test as to whether the independent variable improves the ability of the model to better predict the dependent variable. A p-value of 0.05 or less is generally considered to be significant. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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55) A regression model has the following output.

Intercept Inventory Count Unemployment Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933

t Stat -19.4549 15.22256 5.690592

P-value 2.7E-19 3.28E-16 2.66E-06

What does the intercept coefficient represent? A) The intercept coefficient is a result of the model that represents the mean for the response when all the dependent variables are zero. B) The intercept doesn't have a practical interpretation. C) The intercept coefficient is the value when the equation function crosses the y-axis. D) The intercept coefficient is the inverse relationship between the dependent variable and the independent values since the value is less than 0. Answer: B Explanation: The intercept doesn't have a practical interpretation. It is a result of the model that represents the mean for the response when all the independent variables are zero. It is where the equation function crosses the y-axis. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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56) Collins Realtors would like to predict home sales using a regression model. The regression model is based on historic values. The regression statistics from Excel are provided below.

Intercept Inventory Count Unemployment Rate Mortgage Rate

Coefficients Standard Error -45.5369 2.340635 0.005637 0.00037 443.7485 77.97933 1,060.542 205.0054

t Stat -19.4549 15.22256 5.690592 5.173237

P-value 2.7E-19 3.28E-16 2.66E-06 1.2E-05

Based on the regression model, the equation to predict homes sales is A) y = -45.5369 + 0.0056 × (inventory count) + 443.7485 × (unemployment rate) + 1,060.542 × (mortgage rate) B) y = 45.5369 - 0.0056 × (inventory count) - 443.7485 × (unemployment rate) - 1,060.542 × (mortgage rate) C) y = -19.4549 + 15.22256 × (inventory count) + 5.690592 × unemployment rate + 5.173237 × (mortgage rate) D) y = 19.4549 - 15.22256 × (inventory count) - 5.690592 × (unemployment rate) - 5.173237 × (mortgage rate) Answer: A Explanation: y = -45.5369 + 0.0056 × (inventory count) + 443.7485 × (unemployment rate) + 1,060.542 × (mortgage rate) Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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57) Sky Eyes manufactures drones for security and enforcement organizations. They would like to predict production costs using a regression model. The regression model is based on historic production values. The regression statistics from Excel are provided below.

Intercept Machine Hours Labor Hours Production Output

Coefficients Standard Error -477.7647341 62.63384 44.97381045 5.9814 -0.08890915 0.083252 55.06503861 5.957718

t Stat -7.627901659 7.518943592 -1.067948403 9.242639029

P-value 1.20603E-09 1.74367E-09 0.291239564 5.77595E-12

What can be concluded based on the output of the regression statistics? A) Each labor hour will add $0.0889 to the production cost. B) 44.97 machine hours are required to produce 55 units. C) The unit of production will add $44.97 to the production cost. D) Each machine hour will add $44.97 to the production cost. Answer: D Explanation: The coefficient for machine hours in $44.97, so each machine hour will add $44.97 to the production cost. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 58) Sky Eyes manufactures drones for security and enforcement organizations. They would like to predict production costs using a regression model. The regression model is based on historic production values. The regression statistics from Excel are provided below.

Intercept Machine Hours Labor Hours Production Output

Coefficients Standard Error -477.7647341 62.63384 44.97381045 5.9814 -0.08890915 0.083252 55.06503861 5.957718

t Stat -7.627901659 7.518943592 -1.067948403 9.242639029

P-value 1.20603E-09 1.74367E-09 0.291239564 5.77595E-12

What can be concluded based on the output of the regression statistics? A) Labor hours and machine hours are not significant variables in the regression model. B) Labor hours is not a significant variable in the regression model. C) Labor hours, machine hours, and production output are all significant in the regression model. D) Only the production output is a significant variable in the regression model. Answer: B Explanation: Labor hours is not a significant variable since the P-value is greater than 0.05. Diff: 1 LO: 3-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 177

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59) A prescriptive question A) identifies a problem or issue to understand why an outcome occurred. B) is designed to gain a better understanding of data to answer business questions. C) asks what you want to know what may happen in the future. D) investigates how to take advantage of future opportunities or mitigate a future risk outcome. Answer: D Explanation: A prescriptive question investigates how to take advantage of future opportunities or mitigate a future risk outcome. Diff: 1 LO: 3-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 60) Dipped offers specialty donuts in several locations. A data analysis is required to look at how they can increase revenues. What prescriptive question can be asked for this analysis? A) What price should be charged if these products were bundled together? B) What ingredients can be substituted to achieve lower product costs? C) Which locations have the most sales? D) Will increased marketing spend increase revenues? Answer: A Explanation: A prescriptive question investigates how to take advantage of future opportunities or mitigate a future risk outcome. Diff: 1 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 61) A linear optimization is best used when answering A) predictive questions. B) diagnostic questions. C) prescriptive questions. D) descriptive questions. Answer: C Explanation: Optimization is the process of selecting values of variables that minimize or maximize some quantity of interest. Linear optimization is best used when answering prescriptive questions. Diff: 1 LO: 3-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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62) A linear optimization model is comprised of A) decision variables, an objective function, and constraints. B) dependent and independent variables, an objective function, and constraints. C) dependent and independent variables and constraints. D) dependent and independent variables, a regression equation, and constraints. Answer: A Explanation: A linear optimization model is comprised of decision variables, an objective function, and constraints. Diff: 1 LO: 3-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 63) Mountain Ice produces three types of organic ice cream: vanilla bean, chocolate chunk, and black cherry. Each product type has different product costs and sales demand. If the prescriptive question is "How much should be produced for each type to maximize contribution margin?", what constraints should be applied in the model? A) Sales demand and labor hours available. B) Raw ingredient costs and raw ingredients availability. C) Overhead costs and sales demand. D) Labor hours and raw ingredients costs. Answer: A Explanation: Labor hours is a resource constraint and sales demand will have limits. Both also contribute to contribution margin. Diff: 2 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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64) Mountain Ice produces three types of organic ice cream: vanilla bean, chocolate chunk, and black cherry. Each product type has different product costs and sales demand. If the prescriptive question is "How much should be produced for each type to maximize contribution margin?", what analyses should be used? A) A what-if analysis can be used to determine the product mix that will maximize contribution margin. B) A regression analysis can be used to determine the product mix that will maximize contribution margin. C) A linear optimization model can be used to determine the product mix that will maximize contribution margin. D) A goal seek analysis can be used to determine the product mix that will maximize contribution margin. Answer: C Explanation: A prescriptive question investigates how to take advantage of future opportunities or mitigate a future risk outcome. The objectives for prescriptive analytics focus on what should happen. Linear optimization is a process which select values of variables which minimize or maximize some quantity of interest, which is production for this question. Diff: 2 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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65) Cyber-attacks are on the rise. Companies are investing in remote access VPN which will provide remote and secure access to a company network to employees working away from the main office. A data analysis is required to evaluate which VPN will have the highest return on investment. What area of professional practice is this and what would be the motivation and objective? A) The professional practice area is accounting information systems (AIS). The motivation is to reduce cyber-attacks. The objective is to determine which VPN will reduce cyber-attacks the best. B) The professional practice area is information technology. The motivation is to increase the security of its AIS assets, including data. The objective is to determine which VPN will reduce cyber-attacks the most. C) The professional practice area is information technology. The motivation is to determine what VPN will have the highest return on investment. The objective is to reduce cyber-attacks. D) The professional practice area is accounting information systems (AIS). The motivation is to increase the security of its AIS assets, including data. The objective is to determine what VPN will have the highest return on investment. Answer: D Explanation: VPNs are part of accounting information system (AIS). The goal is to increase the security of its AIS asset. Diff: 1 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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66) The controller has requested data analysis to see if the allowance for doubtful accounts has been correctly calculated. What area of professional practice is this and what would be the motivation and objective? A) The professional practice area is financial accounting. The motivation is to have accurate financial statements. The objective is to determine if the allowance for doubtful accounts is correct. B) The professional practice area is financial accounting. The motivation is to determine if the allowance for doubtful accounts is correct. The objective is to have accurate financial statements. C) The professional practice area is managerial accounting. The motivation is to have accurate financial statements. The objective is to determine if the allowance for doubtful accounts is correct. D) The professional practice area is managerial accounting. The motivation is to determine if the allowance for doubtful accounts is correct. The objective is to have accurate financial statements. Answer: A Explanation: Financial accountants are interested in calculating the correct amount for the allowance for doubtful accounts. The goal is to determine if the allowance for doubtful accounts is adequate to cover potential future uncollectible receivables. Diff: 1 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 67) What would be a typical motivation for managerial accountants to perform a data analysis? A) Ensure that closing entries are posted at the end of the fiscal year. B) Determine if there are fraudulent sales transactions. C) Determine if the tax liability is correctly calculated in accordance with any new tax laws. D) Determine the return on investment on a new ERP system. Answer: D Explanation: Managerial accountants are interested in analyzing the return on any capital asset related investment decisions. Diff: 1 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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68) Sky Eyes manufactures drones for security and enforcement organizations. They would like to predict production cost using a regression model. The regression model is based on historic production values. The regression statistics from Excel are provided below.

Intercept Machine Hours Labor Hours Production Output

Coefficients -477.7647341 44.97381045 -0.08890915 55.06503861

Standard Error 62.63384 5.9814 0.083252 5.957718

t Stat -7.627901659 7.518943592 -1.067948403 9.242639029

P-value 1.20603E-09 1.74367E-09 0.291239564 5.77595E-12

What can be concluded based on the output of the regression statistics? Select all that apply. A) The regression equation is y = 44.97 × (machine hours) - 0.0889 × (labor hours) + 55.065 × (production output). B) Labor hours is significant variable in the regression model C) Machine hours is a significant variable in the regression model. D) The regression equation is y = - 477.76+ 44.97 × (machine hours) - 0.0889 × (labor hours) + 55.065 × (production output). Answer: C, D Explanation: The P-value for machine hours is less than 0.05 so it is significant. The equation is based on the value of the coefficients shown in the regression model statistics. Diff: 2 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 69) Select all that apply. A linear optimization model is comprised of A) decision variables. B) constraints. C) dependent and independent variables. D) a regression equation. Answer: A, B Explanation: A linear optimization model is based on decision variables, an objective function, and constraints. Diff: 1 LO: 3-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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70) A data analysis is required to see if revenue has been correctly classified as earned revenue or unearned revenue. What statements are correct? Select all that apply. A) The area of accounting practice is financial accounting. B) The area of accounting practice is managerial accounting. C) The objective is to verify that revenue recognition rules are being met. D) The motivation for the analysis is to calculate sales returns and allowances. Answer: A, C Explanation: Financial accountants are concerned about classifying revenue as earned revenue and unearned revenue. They want to make sure that the classification complies with revenue recognition rules established by the Company under GAAP. Diff: 1 LO: 3-5 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 71) A data analysis is required to determine the effects of corporate tax rate changes. What statements are correct? Select all that apply. A) The area of accounting practice is auditing. B) The area of accounting practice is tax accounting. C) The objective of the data analysis is to determine how the changes will affect the income tax liability. D) The motivation for the data analysis is to ensure that the financial statements reflect all transactions. Answer: B, C Explanation: Tax accountants are concerned about corporate tax rate changes and how it affects tax liability. Diff: 1 LO: 3-6 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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72) What would be a typical objective in an audit performed in accordance with generally accepted auditing standards to perform data analysis? Select all that apply. A) Determine whether physical inventory exists, and the total inventory value matches the balance sheet amount. B) Determine the risk of fraudulent sales transactions. C) Determine if the tax liability is correctly calculated in accordance with new tax laws. D) Determine the return on investment on a new capital project. Answer: A, B Explanation: Auditors are concerned about existence and fraud. Diff: 2 LO: 3-6 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 73) What would be a typical objective in accounting information system professional practices related to performing data analysis? Select all that apply. A) Determine whether physical inventory exists, and the values match the balance sheet. B) Determine the risk of fraudulent sales transactions. C) Determine system uptime and other reliability metrics. D) Determine which ERP system would have the highest return on investment. Answer: C, D Explanation: AIS professionals are responsible for ERP systems and system availability. Diff: 1 LO: 3-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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74) Blaze Scooters is a manufacturer of electric scooters. Warranty expenses have been increasing for each quarter in the last fiscal year. If the descriptive question is "What electric scooter models are contributing to the increased warranty expense?", what measures can be used to answer the question? Select all that apply. A) What are the total warranty costs for each scooter model? B) What are the number of products that are returned for repairs for each scooter model for each recent quarter? C) What is the average warranty cost for each scooter product line returned for repairs? D) What are the total sales for all scooter model combined? Answer: A, B, C Explanation: Total sales for all scooter model combined will not determine which electric scooter models are contributing to the increased warranty expenses. Diff: 2 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 75) Blaze Scooters is a manufacturer of electric scooters. Warranty expenses have been increasing for each quarter in the last fiscal year. If the diagnostic question is "What is driving the increase in warranty expense?", what measures can be used to answer the question? Select all that apply. A) What has been the trend in quantity assurance expenses throughout the year? B) Are increased sales units causing warranty expenses to increase? C) What are the total warranty expenses for each quarter? D) Are total warranty expenses expected to increase given the increase in sales units? Answer: A, B Explanation: Answer C will not show data relationships and answer D is a predictive question. Diff: 3 LO: 3-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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76) Select all that apply. A linear regression model is comprised of A) decision variables. B) constraints. C) dependent and independent variables. D) an objection function. Answer: C Explanation: A linear regression model is comprised of a dependent variable and independent variables. Diff: 1 LO: 3-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 77) You are creating a regression model to predict cash flow. What are possible independent variables that can be included in the regression model? Select all that apply. A) Revenues B) Investments in financing activities C) Depreciation expense D) Impairment of goodwill Answer: A, B Explanation: Depreciation expense and goodwill are noncash accounts. Diff: 1 LO: 3-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 78) Mountain Ice produces five types of energy bars. If the prescriptive question is "How many bars of each type should be produced to maximize operating profit?", what constraints should be applied in the model? Select all that apply. A) Raw ingredients availability B) Product price C) Raw ingredient costs D) Sales demand Answer: A, D Explanation: Product price and raw ingredient costs are not resource constraints. Diff: 2 LO: 3-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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79) Identify and describe the four motivations for data analyses in accounting. Answer: Opportunities — New, potentially advantageous occasions or channels. Professional Issues and Requirements — Ensuring compliance with new or upcoming regulations, laws, or changes in practices. Problem Solving — Solving problems related to risks and issues around clients, technologies, employees, operations, and supply chains. Process and Performance Assessment — Evaluating financial statements for potential material misstatements or risks of material misstatement. Regular inspection of operational efficiency and effectiveness at the individual, functional, unit, and business levels, for example, by comparing actual results to budgets. Diff: 1 LO: 3-1 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 80) What is meant by a functional relationship? Name two chart types that can be used to show functional relationships. Answer: A functional relationship is the effect of an independent variable on a dependent variable. A scatter plot chart or line chart can be used to show functional relationships. Diff: 1 LO: 3-4 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 81) What are two types of variables in a regression model? Within a taxation context, provide an example of a dependent variable and two independent variables. Answer: A regression model has a dependent variable and independent variables. Dependent variable is the outcome measure. Independent variables are the variables that influence the dependent variable. Using a tax example, estimating a tax liability would be the dependent variable and independent variables would be tax rates and taxable revenues, respectively. Diff: 1 LO: 3-4 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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82) For each area of professional practice identify an internal stakeholder and an external stakeholder. Professional Practice Accounting information systems Auditors Financial accountants Managerial accountants Tax accountants Answer: Professional Practice Accounting information systems Auditors Financial accountants Managerial accountants Tax accountants

Internal Stakeholder

External Stakeholder

Internal Stakeholder External Stakeholder Chief Information Officer, Investors IT Security Board of Directors, Investors, Creditors Management Board of Directors, Chief Suppliers, Banks, Financial Officer Creditors Divisional VPs, Investors, Competitors Operational Managers Management, Chief Tax Regulators Financial Officer

Diff: 2 LO: 3-6 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 83) What are what-if analyses? What are two what-if tools built into Microsoft Excel? Explain how they work. Answer: A spreadsheet model that evaluates changes and specific combinations of model inputs and assumptions. The tools built into Excel are Scenario Manager and Goal Seek. Scenario Manager in Excel allows changing or substituting input values for multiple cells so that the results of different input values or different scenarios can be viewed at the same time. Goal Seek is used if we know the result we want but are not sure what input value will achieve that result. Diff: 1 LO: 3-5 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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84) Explain what diagnostic questions are. What are two common diagnostic analyses and what charts can be used for these analyses? Answer: Diagnostic questions build on what was learned in the descriptive analysis and explore the data to find the cause of the outcome. Common diagnostic analyses are: Anomaly detection: Scatter plots, bar charts. Correlation (linear): Scatter plots, correlation. Pattern detection: Line graphs, bar charts. Trend analysis: Bar charts, line charts, trendlines. Diff: 1 LO: 3-3 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 85) What is the difference between predictive and prescriptive questions? Within a managerial accounting context, provide an example of a predictive question and a prescriptive question. Answer: Predictive analytics use past and present data to forecast and create models that allow businesses to make predictions about the future. Prescriptive objectives build on predictions about the future and descriptions of the present to determine the best course of action. An example of a predictive question is "How will production output increase if an additional production line was added?" An example of a prescriptive question is "What price should be charged for each concert ticket if the goal is to increase the total contribution margin by 10%?" Diff: 1 LO: 3-4, 3-5 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 86) Explain what descriptive questions are. What are three common descriptive analyses? Answer: Descriptive questions focus on understanding what is currently happening or what has happened in the past. Common descriptive analyses are: Frequency measures Measures of location (mean, median, mode) Measures of dispersion (minimum, maximum, range, variance, and standard deviation) Measures of percentage change Diff: 1 LO: 3-2 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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87) Explain the difference between motivation and objective in data analyses. Provide an example of a motivation, an objective, and a question for data analysis within an auditing context. Answer: Motivation in data analytics in accounting is the reason the analysis is being performed and objective is the goal of the data analysis. A motivation would be to evaluate the risk of fraudulent employee travel expense payments. An objective is to verify that employees are not receiving unauthorized payments. A question is "Are there any travel expenses that are not in compliance with the company's travel policies?" Diff: 1 LO: 3-1 Bloom: K Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 88) You are an auditor for Sunnybrook Hotels. You are using analytical procedures to validate the accuracy of total annual compensation of hotel employees. Provide a motivation, an objective, and a question for data analysis within an auditing context. What type of analysis can be used to answer the question? Answer: Stakeholders: Auditors, Audit Committee Motivation: Evaluate the accuracy of the total annual compensation of the hotel employees. Objective: To determine any unusual changes in the total annual compensation compared to prior years. Questions: Are there any unusual trends or changes in total annual compensation from prior years? Analysis: Trends analysis using a bar chart showing total compensation by year. Diff: 2 LO: 3-6 Bloom: AP Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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89) Clean Whistle provides cleaning services to private homes. They offer three service packages: light cleaning, moderate cleaning, and deep cleaning. You have been asked to provide data analysis that will determine the optimal mix of services that maximize profits. You are given sales transactions for the last two years, and you are aware that there are some resource constraints that should be factored into the analysis. 1. Name an internal stakeholder and an external stakeholder in the analysis. 2. What is the objective of this analysis? 3. What are three possible constraints that could be factored into the analysis? 4. What analysis will you use to answer the three questions that you developed? Answer: 1. Internal Stakeholders: management, employees. External Stakeholders: customers 2. The objective is to determine the optimal sales mix of services given the resources available. 3. Availability of employees, demand for each type of cleaning service, availability of cleaning equipment are possible constraints. 4. A linear optimization can be used to determine the best mix of products for maximum profit. Diff: 2 LO: 3-4, 3-5 Bloom: S Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 90) You are an internal auditor for North Humber University. You are using analytical procedures to test segregation of duties controls for accounts receivable write-offs. Provide a stakeholder, a motivation, an objective, and a question for data analysis within an auditing context. What type of analysis can be used to answer the question? Answer: Stakeholders: Internal Audit Committee, Finance Department. Motivation: Evaluate the risks for fraudulent accounts receivable write-off activities. Objective: Determine if accounts receivable write-offs are recorded by authorized individuals. Question: Are there individuals performing accounts receivable write-offs and also collecting payments? Analysis: A bar chart of the total amount of accounts receivable write-offs recorded by each employee. Diff: 2 LO: 3-6 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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91) Diamond Coast Partners is a full-service accounting firm that offers tax, assurance, and management consulting. The cost accounting department would like to allocate HR costs to three divisions. HR is a supporting department for all three divisions. A data analysis scenario is needed for this project. Name two stakeholders and their motivation. Provide a question that each stakeholder would have. What measures can be used to answer their question? Answer: Stakeholder: Divisional Managers. Motivation: Would like to understand how the profitability of each division is affected by HR costs. Question: What is the HR cost allocation for my division? How does the HR cost allocation affect my division's operating margin? What is the cost/benefit of the HR cost allocation for my department. Measures: Total HR costs; operating margins; recent growth in newly recruited staff for each division. Stakeholder 2: VP of HR Motivation: Would like to understand if costs are appropriately allocated to each division. Question: How do the HR costs compare with each division? What is the percentage of total cost allocation for each division? Measures: Percentage of the HR costs for each division; average HR costs for each division. Diff: 2 LO: 3-1, 3-6 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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92) OneSun is a manufacturer of electric automotive vehicles. To offset electricity costs, they have installed a solar roof. Electricity costs are impacted by other factors. The finance manager would like to predict electricity costs using historic values of electricity costs and several other variables. A regression model has been created and the output is provided. Regression Statistics Multiple R 0.964206543 R Square 0.929694257 Adjusted R Square 0.925007208 Standard Error 1,363.307738 Observations 49 ANOVA df Regression Residual Total

Intercept Production Hours Production Units Average Sun Hours

3 45 48

SS 1.11E+09 83,637,359 1.19E+09

Coefficients -64,437.24936 209.2798074 -0.014018417 39.9200352

MS F Significance F 368,662,025.4 198.3538366 5.99569E-26 1,858,607.989

Standard Error t Stat P-value Lower 95% 4,414.09 -14.59808252 1.10788E-18 -73,327.68289 13.27861 15.76066575 6.122E-20 182.5353046 0.009134 -1.534764268 0.131843377 -0.032415079 7.684759 5.194702143 4.79785E-06

24.44213561

1. What is the dependent variable and the independent variables? 2. Is there a correlation between electric costs and the independent variables? Explain your answer. 3. What statistic can be used to assess the variability of the observed dependent variable values from the values predicted by the model? Can the variability be assessed given the information provided?

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Answer: 1. The dependent variable is electricity cost and the independent variables are production hours, production units, and average sun hours. 2. Yes, there is a positive correlation between electricity costs and the independent variables. This can be validated by the Multiple R value which represents the correlation coefficient. Since the value is close to +1, there is a strong positive correlation. 3. The Standard Error represents the variability of the observed dependent variable values from the values predicted by the model. We cannot assess variability without knowing the standard deviation of the electricity costs. If the standard error is smaller than the standard deviation, the standard error is acceptable. Diff: 2 LO: 3-4 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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93) Trius Holdings has real estate holdings across the country. They hold a large investment account which consists of short-term and long-term investments. They want to predict their investment account using historic values of the investment account and several other variables. A regression model has been created and the output is provided. Regression Statistics Multiple R 0.970093325 R Square 0.94108106 Adjusted R Square 0.93715313 Standard Error 209,769.7706 Observations 49 ANOVA df Regression Residual Total

Intercept S&P 500 Interest Rate Inflation Rate

3 45 48

SS MS 3.16E+13 1.05426E+13 1.98E+12 44,003,356,661 3.36E+13

Standard Coefficients Error t Stat -629825.3634 212314.7 -2.966471198 -267.8595084 74.30892 -3.604674908 722,055.2598 134,162.2 5.381958121 457,127.5171 55,583.61 8.224142542

F Significance F 239.587064 1.13189E-27

P-value 0.004808796 0.000778512 2.55421E-06 1.63011E-10

Lower 95% -1,057,449.066 -417.525361 451,838.7488 345,176.3834

1. What is the dependent variable and the independent variables? 2. What does the Significant F value indicate? Interpret the value for the regression model. 3. What does the P-value indicate? Interpret the value for the regression model. 4. What would be the regression equation for this analysis? Answer: 1. The dependent variable is the investment account value, and the independent variables are the S&P 500, interest rate, and inflation rate. 2. The Significant F value tests for significance. If the value is less than 0.05 then the model can explain some of the variations of the dependent variable. The value is lower than 0.05 so the independent variables can explain some of the variations in total expenses and is better than no model at all. 3. The P-value for each of the independent variables provides a test of significance. Since all the values are less than 0.05, they are significant. This means that the independent variable improves the ability of the model to better predict the dependent variable. 4. Investment Account = -629,825.363 - 267.860 × (S&P 500 value) + 722,055.260 × (interest rate) + 457,127.517 × (inflation rate) Diff: 3 LO: 3-4 Bloom: AP Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 196

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94) Mountain Ice produces ice cream and distributes its products nationally. Management wants insights into sales revenue by region using the data from the last fiscal period. The clustered bar chart below will be used to answer descriptive questions.

1. What is the objective of the data analysis? 2. What is an initial question? 3. What are three sub-questions? 4. What are possible measures to answer the sub-questions? Answer: 1. The objective to understand sales performance by region. 2. Have sales increased or decreased for each region? 3. Have sales increased or decreased for all regions? What sales region had the largest sales increase compared to the previous quarter? Which sales region had the lowest sales increase compared to the previous quarter? What was the total sales revenue for each region compared to the previous quarter? 4. Measures: Percentage changes in sales revenue from the prior quarter, total revenue for each region; average revenue per quarter for each region. Diff: 2 LO: 3-1, 3-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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95) South Palm Hotel would like to predict sales refunds to its guests. Refunds are issued when guests are receiving services that are not up to the hotel's standards. Management would like to predict sales refunds using historic values of sales refunds and several other variables. A regression model has been created and the output is provided. Regression Statistics Multiple R 0.804710011 R Square 0.647558202 Adjusted R Square 0.624062082 Standard Error 1,461.377131 Observations 49 ANOVA df Regression Residual Total

Intercept Sales # of Staff Onsite Occupancy Rate

3 45 48

SS 1.77E+08 96,103,040 2.73E+08

MS F Significance F 58,858,240.12 27.56021864 2.85583E-10 2,135,623.12

Standard Coefficients Error t Stat P-value -1,068.462647 1,823.126 -0.586060653 0.560762977 0.637505609 0.105207 6.059513122 2.54751E-07 -188.9895066 51.45769 -3.672716484 0.00063505 4,121.496217 1,826.393 2.25663105 0.068935138

Lower 95% -4,740.427704 0.425607032 -292.6306146 442.9509363

1. What is a motivation for the data analysis? 2. What is an objective? 3. What is the dependent variable? 4. What are the independent variables? 5. Comment on the significance of the independent variables for this regression model. 6. Comment on the correlation between the dependent variable and independent variables. 7. What is the regression equation? 8. If sales are $10,000, the number of staff onsite is 10, and the occupancy rate is 50%, what would be the projected sales refund amount?

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Answer: 1. The motivation is to understand the factors driving sales refunds. 2. The objective is to predict sales refunds based on key variables. 3. The dependent variable is sales refund amounts. 4. The independent variables are sales, number of staff onsite, and occupancy rate. 5. Sales and the number of staff onsite are significant in the regression model since the P-values are less than 0.05. The occupancy rate is not significant since the P-value is greater than 0.05. 6. There is a positive correlation between the sales return amounts and the independent variables since the Multiple R value is close to 1. 7. Sales Return Amounts = -1,068.46 + 0.638 × (sales) -188.990 × (# of staff onsite) + 4,121.496 × (occupancy rate). 8. Sales Return Amounts = -1,068.46 + 0.638 × (10,000) -188.990 × (10) + 4,121.496 × (0.50) = $5,482.39. Diff: 3 LO: 3-1, 3-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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96) BTP Consulting would like to understand the impact of employee-focused benefit plans and their impact on revenue. Training enhances employees' skills and wellness programs can promote the mental, physical, and financial health of employees. A regression model was provided. Regression Statistics Multiple R 0.999712 R Square 0.999425 Adjusted R Square 0.999386 Standard Error 2,899.151 Observations 48 ANOVA df Regression Residual Total

Intercept Training Costs Wellness Costs Vacation Days

3 44 47

SS 6.43E+11 3.7E+08 6.43E+11

Coefficients -4,206.02 0.041594 123.901 2.343214

MS F Significance F 2.14E+11 25,493.26445 2.78E-71 8405077

Standard Error 843.8352 0.066163 0.688673 3.339849

t Stat P-value -4.98441 1.01511E-05 0.628653 0.532826124 179.9127 9.96066E-65 0.701593 0.48662779

Lower 95% -5,906.66 -0.09175 122.5131 -4.38781

1. What is a motivation for the data analysis? 2. What is an objective? 3. What is the dependent variable? 4. What are the independent variables? 5. Comment on the significance of the independent variables for this regression model. 6. Comment on the correlation between the dependent variable and independent variables? 7. What is the regression equation? 8. If training costs are $1,000, wellness costs are $1,000, and vacation days are 20, what would be the predicted revenue amount?

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Answer: 1. The motivation is to understand how employee programs have impacted revenues. 2. The objective is to predict revenues based on employee program variables. 3. The dependent variable is revenues. 4. The independent variables are training cost, wellness costs, and vacation days. 5. Training costs and vacation days are not significant in the regression model since the p-values are greater than 0.05. The wellness costs variable is significant since the p-value is greater than 0.05. 6. There is a positive correlation between sales returns and the independent variables in the model since the Multiple R value is close to 1. 7. Revenue = -4,206.02 + 0.0416 × (training costs) + 123.901 × (wellness costs) + 2.343 × (vacation days) 8. Revenue = -4,206.02 + 0.0416 × (training costs) + 123.901 × (wellness costs) + 2. 343 × (vacation days) = $119,783.44 Diff: 3 LO: 3-1, 3-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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97) Wanda's Pie is a start-up specializing in gluten-free pies. There are two varieties of pies being offered and they would like to add black cherry into their product line. Management would like to achieve a total contribution margin of $12,000. The contribution margin ratios (percentages) have already been determined for all three pies and the revenues for the first two pies have been estimated. Revenue Strawberry Mint Mango Peach Black Cherry Total

Contribution Contribution Margin % Margin $15,000 15% $2,250 $20,000 18% $3,600 ? 20% ? $12,000

1. What is the motivation type (opportunity, professional issue, problem solving, process and performance assessments) for this data analysis? 2. What is the objective? 3. What kind of analysis is this (e.g., diagnostic, prescriptive, predictive, descriptive)? Explain why. 4. What is the area of accounting practice in this data analysis? 5. What is the prescriptive question being asked in this analysis? 6. What Excel function can be used for this analysis? 7. What is the revenue needed to achieve a total contribution of $12,000? Answer: 1. This is an opportunity since they are introducing a new product. 2. The objective is to determine the revenue needed to achieve contribution goals. 3. This is a prescriptive analysis since we are asking what is needed to achieve a goal. 4. The accounting practice is managerial accounting since we are making management decisions. 5. What is the revenue needed to achieve a total contribution margin of $12,000? 6. The Goal Seek function in Excel can be used for the analysis but it can also be done manually with a calculator. 7. A revenue of $30,750 is needed to achieve a total contribution of $12,000. Revenue Strawberry Mint Mango Peach Black Cherry Total

Contribution Contribution Margin % Margin $15,000 15% $2,250 $20,000 18% $3,600 $30,750 20% $6,150 $12,000

a. Calculate contribution margin for black cherry: $12,000 - 2,250 - 3,600 = $6,150 b. Calculate the revenue for Black cherry = $6,150/0.20 = $30,750 Diff: 3 LO: 3-1, 3-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 202

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98) Glassworks is a supplier of office windows. The company has had a problem with debt collection and bad debt write-offs have been increasing. They want to predict bad debt write-off amounts based on the dollar value amounts of the accounts receivable. Historic data of bad debt write-off amounts have been plotted against its related accounts receivable dollar balances.

1. Identify the main stakeholder and their motivation for the data analysis. 2. What is the objective? 3. What kind of analysis is this (e.g. diagnostic, prescriptive, predictive, descriptive)? Explain why. 4. What is the area of accounting practice in this data analysis? 5. How would you interpret the trendline being shown? 6. How would you interpret the value of the R² value? 7. What is the predicted bad debt write-off value if the accounts receivable value is $10,000? Answer: 1. The accounting department is the main stakeholder, and their motivation is to understand the relationship between bad debt write-off, and accounts receivable. 2. The objective is to present bad debt write-off amounts based on accounts receivable values. 3. This analysis is predictive since we are trying to predict bad debt expense amounts. 4. The area of accounting practice is financial accounting. 5. The trend line is showing a functional relationship between accounts receivable and bad debt write-off values. As the accounts receivable value increases, the bad debt expense also increases. 6. The R² value shows how well the line fits with the data. A value of 0.6 is showing a moderate fit. Values closer to 1 would show a better fit. 7. Bad Debt Write-Off = 0.6893 × $10,000 - $222.63 = $6,670.37 Diff: 3 LO: 3-1, 3-5, 3-6 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 203

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99) Vista Education is an educational publisher of college textbooks. There are some concerns that textbooks are being sold to increase bonuses at year-end. Subsequently, textbooks are being returned at the beginning of the new year for credit. The controller has asked you to perform data analysis of the issue so that they can understand the problem better. A visualization was created below to show sales and sales returns trends for the year.

Complete the chart below for descriptive, diagnostic, predictive, and prescriptive analytics. Objective Initial Question Sub-question Descriptive Analysis: Understand total sales and sales returns. Diagnostic Analysis: Understand if there are patterns to sales and sales returns by salesperson. Predictive Analysis: Can sales returns be predicted using historic values? Prescriptive Analysis: Understand the impacts to bonuses if the bonus calculation is changed.

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Analyzes

Answer: Objective Initial Question Sub-question Measures Analyzes Descriptive How do total sales What was the Sum of total Bar chart of Analysis: compare with sales total sales and sales and sum sales and total Understand total returns? total returns for of sales sales returns sales and sales each month? returns. by month. returns. Diagnostic Are there patterns Is there a Average sales A line chart Analysis: in sales and sales salesperson that returns as a that shows Understand if there returns during the has an unusually percentage of sales and sales are patterns to sales year? high dollar sales by return by and sales returns by amount of sales salesperson. month for salesperson. returns? each salesperson. Predictive If sales increase by What would be Average sales Line Analysis: 10%, how would it the projected returns as regression Can sales returns affect sales return sales returns for percentage analysis of be predicted using amounts? each salesperson sales sales and sales historic values? if sales transactions. returns. increased? Prescriptive If the bonus What would be Total sales and What-if Analysis: calculation was the revised total sales analysis Understand the changed using net bonus amount returns for impacts to bonuses sales instead of earned for each each if the bonus gross sales, how employee? salesperson. calculation is would that affect Total bonus changed. bonuses? calculation. Diff: 3 LO: 3-1, 3-2, 3-3, 3-4, 3-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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100) Sky Eyes is a manufacturer of drones for security and enforcement organizations. They have models at different price points and functional capabilities for these existing markets. They are looking to expand into the customer market. You have been asked to conduct a data analysis that will help management understand the sales trends and understand operating costs of expanding into the customer market. Complete the chart below for descriptive, diagnostic, predictive, and prescriptive analytics. Objective Initial Question Descriptive Analysis: Understand sales performance. Diagnostic Analysis: Understand if there are patterns to sales for each model. Predictive Analysis: How is revenue affected by expanding into the consumer market? Prescriptive Analysis: What is the most profitable product mix?

Sub-question

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Analyzes

Answer: Objective Initial Question Sub-question Measures Analyzes Descriptive Has revenue What models areTotal Sales by Bar chart of Analysis: increased for the showing the best Model. Total sales by model Understand sales company? sales? Operating Costs type for each performance. by Model. month Diagnostic Are there patterns Is there a model Total units sold A line chart Analysis: of sales for each that has an for each model. that shows Understand if model? unusual high Percentage sales of each there are patterns individual changes in sales model for the to sales for each sale(s)? for each model last three model. from prior year. years. Predictive What is the Price variance Trend analysis If the lowest priced expected sales between Sky Analysis: will provide How is revenue model was sold to demand of Eyes' products an estimate of consumer markets, comparable affected by and the projected expanding into how will that products in the competition. sales. impact revenues? the consumer marketplace? Total units sold market? by competitors. Linear optimization Prescriptive How many of each What is the model using Contribution Analysis: model should be maximum the Solve Margin. Sales function in What is the most produced and sold contribution profitable to maximize margin that can price for each Microsoft model. product mix? operating profits? be achieved? Excel. Diff: 3 LO: 3-1, 3-2, 3-3, 3-4, 3-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 4 Planning Data and Analysis Strategies 1) When creating a data analysis project plan, what is the order of steps? A) Focus on the objective, select a data strategy, select an analysis strategy, consider risks, and embed controls. B) Select a data strategy, focus on the objective, select an analysis strategy, embed controls, and consider risks. C) Select an analysis strategy, select a data strategy, focus on the objective, embed controls, and consider risks. Answer: A Explanation: Focus on the objective, select a data strategy, select an analysis strategy, consider risks, and embed controls. Diff: 1 LO: 4-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) When focusing on the objective, A) use critical thinking to develop and rank a few data alternatives. B) use what was learned from selecting the data strategy and apply that same development and ranking process to analyses alternatives. C) consider and prioritize critical risks to both the data and the analysis strategies. D) remember to ask how the plan's proposed data and analysis strategy decisions relate to the objective. Answer: D Explanation: Keep the project's objective and specific questions in mind to select the best data and analysis strategies to fulfill the objective and answer those questions. Simply remembering to ask how the plan's proposed data and analysis strategy decisions relate to the objective helps us make better choices. Diff: 1 LO: 4-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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3) The purpose of considering risks in the analysis process is to A) increase the likelihood of selecting the best analysis option. B) prevent misleading and invalid results. C) increase the likelihood that the best data are selected for the objective. D) have confidence that the data selected is the most appropriate for the objective. Answer: B Explanation: Considering and prioritizing critical risks to both the data and the analysis strategies reveals how these risks can create misleading and invalid results. Diff: 1 LO: 4-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 4) The purpose of embedding controls in the analysis process is to A) ensure that anomalies can be easily detected. B) have confidence that results are accurate, valid, and reliable. C) have confidence that the best analysis strategy is detected. D) have confidence that the data selected is the most appropriate for the objective. Answer: B Explanation: Designing and implementing preventative and detective controls into the analysis process means we can be confident that results are accurate, valid, and reliable. Embed controls to reduce these risks in data strategy and analysis strategy. Diff: 1 LO: 4-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 5) You are selecting data within a data analysis project plan. If you are analyzing investment data, Securities and Exchange Commission data would be considered A) as internal data. B) as public domain data. C) as external data. D) as big data. Answer: C Explanation: External data are obtained from sources outside of an organization. This data can include weather data, geographic data, and publicly available competitor data. Diff: 1 LO: 4-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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6) You are selecting data within a data analysis project plan and need to analyze vendor payments. Purchase order data would be considered A) as external data. B) as internal data. C) as cloud data. D) as big data. Answer: B Explanation: Internal data are generated within the organization, such as sales data, purchase data, inventory data, customer data, and vendor data. Diff: 1 LO: 4-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 7) In a data analysis project, external data A) can be used to provide insights that internal data alone cannot provide, but the data can be risky. B) can be used only if internal data cannot provide answers to the questions in the objective. C) can be used only if the external data are sourced by public regulators. D) should not be used in the analysis since there is risk that the data are incorrect and incomplete. Answer: A Explanation: External data are somewhat riskier to use since we often cannot know if the data are accurate or complete. External data can, however, provide insights that internal data alone cannot provide. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 8) A data set is a A) collection of data columns and rows used for analysis. B) collection of structured or unstructured data. C) collection of internally sourced data. D) collection of complete and error-free data. Answer: A Explanation: A data set is a collection of data columns and rows available for analysis. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 9) Attributes are A) columns in the data only if the source is from a database. 210

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B) columns in a data set. C) a row in a data set. D) rows in a data set only if the source is from a database. Answer: B Explanation: Columns are called attributes. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 10) What would be an objective question in a data analysis project plan? A) Should credit card transactions be used to analyze travel spend? B) Are there any missing or incorrect data in the travel expense data set? C) Which employee had the highest travel spend? D) Should we review the travel spend data for any anomalies? Answer: C Explanation: This question ties back to objective on why we are preforming the analysis. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 11) Within a data set, a record A) represents the collection of rows that hold the descriptions of a single or multiple occurrences of the data set. B) represents the collection of columns that hold the descriptions of multiple occurrences of the data set. C) represents the collection of rows that hold the descriptions of a multiple occurrence of the data set. D) represents the collection of columns that hold the descriptions of a single occurrence of the data set. Answer: D Explanation: Rows in a data set from a database are records, which represent the collection of columns that hold the descriptions of a single occurrence of the data set. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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12) Measured raw data are A) data that are created or captured by a controlled process and their format is continuous. B) data that are created automatically by the computer or company policy and the fields are typically formatted as discrete. C) data that are created automatically by the computer or company policy and the fields are typically formatted as discrete or continuous. D) data that are created or captured by a controlled process and their format can be discrete or continuous. Answer: D Explanation: Measured raw data are data created or captured by a controlled process to determine the value of the data. Examples include price, cost, number on hand, weight, date, hours worked, temperature, sensor readings, human observation, or economic value. Their format can be discrete or continuous data. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 13) Non-measured raw data A) is data that are created or captured by a controlled process and their format can be discrete or continuous. B) is data that are created or captured by a controlled process and their format is continuous data. C) is data that are created automatically by the computer or company policy and the fields are typically formatted as discrete. D) is data that are created automatically by the computer or company policy and the fields are typically formatted as discrete or continuous. Answer: C Explanation: Non-measured raw data are often created automatically by the computer or company policy for control. These fields are typically formatted as discrete data. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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14) Calculated data are A) created when one or more fields in a particular record have any number of mathematical operators and can be formatted as discrete or continuous data. B) created when one or more fields in a particular record have any number of mathematical operators and can be formatted as continuous data only. C) created or captured by a controlled process and their format can be discrete or continuous data. D) created automatically by the computer or company policy and the fields are typically formatted as discrete. Answer: A Explanation: Calculated data are created when one or more fields in a particular record (row) have any number of mathematical operators (such as +, -, ×, %) applied, and often are derived from using the data in another field or fields within the same record (never across different rows). These fields can be formatted as discrete or continuous data. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 15) Examples of measured raw data include A) inventory on hand, employee salary, and cash on hand. B) gross profit percentage, total purchase order value, and vendor number. C) product category, employee state of residence, and sales region. D) product description, customer comments, and inventory code. Answer: A Explanation: Measured raw data are created or captured by a controlled process to determine the value of the data. Examples include price, cost, number on hand, weight, date, hours worked, temperature, sensor readings, human observation, or economic value. Their format can be discrete or continuous data. Diff: 1 LO: 4-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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16) Examples of non-measured raw data include A) inventory on hand, employee salary, and cash on hand. B) gross profit percentage, total purchase order value, and credit card transaction charge. C) product category, employee state of residence, sales region. D) product description, customer comments, and sales tax percentage. Answer: C Explanation: Non-measured raw data are often created automatically by the computer or company policy for control. These fields are typically formatted as discrete data. Diff: 1 LO: 4-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 17) A data field's measurement scale A) is a calculation of one or more fields. B) refers to the numeric range of values in the data. C) refers to the type of information provided by the data. D) always contains quantitative values. Answer: C Explanation: A data field's measurement scale refers to the type of information provided by the data. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 18) Categorical (nominal) data A) should always have a quantitative value. B) should have a natural zero point such as financial values. C) are labeled data that can be sorted into groups such as product types. D) have equal or constant difference between observations. Answer: C Explanation: Categorial (nominal) data are labeled or named data that can be sorted into groups according to specific characteristics. The data do not have a quantitative value. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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19) Ordinal data that have equal and constant differences between observations and an arbitrary zero point are called A) categorical data. B) calculated data. C) interval data. D) ratio data. Answer: C Explanation: Interval data is ordinal data that have equal and constant differences between observations and an arbitrary zero point. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 20) Ordinal data A) are ordered or ranked categorical data, for example, bond rating values of D to AAA. B) are data that have equal and constant differences between observations and an arbitrary zero point, for example, temperature. C) should always have a numerical value. D) is interval data with a natural zero point, for example, US dollars. Answer: A Explanation: Ordinal data is ordered or ranked categorical data. Distance between the categories does not need to be known or equal. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 21) Interval data with a zero point that is not arbitrary, such as euros, are called A) ratio data. B) ordinal data. C) categorical data. D) measured raw data. Answer: A Explanation: Ratio data are interval data with a natural zero point. A natural zero point means that it is not arbitrary. Diff: 1 LO: 4-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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22) A control for identifying outlier data points is to A) perform a regression analysis to determine the relationship between variables. B) perform a histogram analysis to identify any unusual data points. C) perform a prescriptive analysis to determine any unusual data points. D) verify integrity of data set and clean up dirty data issues. Answer: B Explanation: Performing a histogram or quartile analysis to identify outliers, then explaining or justifying the rule used for outlier adjustment or removal is a control. Diff: 2 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 23) You are an auditor, and you are performing audit analytic procedures on purchase order data. You see that there are three missing PO numbers in the data set. This is an example of A) erroneous data. B) dirty data. C) a data anomaly. D) non-representative sample selections. Answer: B Explanation: The final data risk is that a variety of data errors, or dirty data, are problematic for data analysis. Dirty data include missing, invalid, duplicate, and incorrectly formatted data. For example, the purchase orders, invoices, or checks written by the company should be sequentially accounted for, with no missing numbers or two with the same identifying number. Diff: 2 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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24) Cougar Motors manufactures electric vehicles globally. A visualization was created to show the number of orders for each sales region. This visualization has data measurement scales of A) categorical and ratio. B) categorical. C) categorical and ordinal. D) ratio. Answer: A Explanation: Sales region is categorical (nominal) data, labeled or named data that can be sorted into groups according to specific characteristics. Number of orders is ratio data, Interval data with a natural zero point. A natural zero point means that it is not arbitrary. Diff: 2 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 25) Calculations such as gross margin percentage have (a) data measurement scale(s) of A) categorical, ordinal, interval, and ratio. B) ordinal, interval, and ratio. C) interval and ratio. D) ratio. Answer: C Explanation: Ratio data are Interval data with a natural zero point. A natural zero point means that it is not arbitrary. E.g., Economic data, such as dollars or euros. Diff: 1 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 26) Bar charts and pie charts can have (a) data measurement scale(s) of A) ordinal, interval, and ratio. B) interval and ratio. C) ratio. D) categorical, ordinal, interval, and ratio. Answer: D Explanation: See Illustration 4.14: Analyses Strategies for Descriptive and Diagnostic Analytics. Diff: 1 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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27) A scatterplot chart was created to show the correlation between employee salaries and their tenure at the company. The scatterplot chart has (a) data measurement scale(s) of A) categorical, ordinal, interval, and ratio. B) ordinal, interval, and ratio. C) interval and ratio. D) ratio. Answer: B Explanation: See Illustration 4.14: Analyses Strategies for Descriptive and Diagnostic Analytics. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 28) A linear regression analysis was created to determine the likelihood of future information security breaches based on the independent variables of dollars spent on cybersecurity training and encryption software. The linear regression analysis has (a) data measurement scale(s) of A) categorical, ordinal, interval, and ratio. B) categorical, interval, and ratio. C) categorical and ordinal. D) ratio. Answer: B Explanation: See Illustration 4.17: Analyses Strategies for Predictive and Prescriptive Analytics. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 29) Analysis is required to determine what the price should be for concert tickets to optimize operating profit. The analysis has (a) data measurement scale(s) of A) categorical, ordinal, interval, and ratio. B) categorical, interval, and ratio. C) interval and ratio. D) ratio. Answer: C Explanation: What if analysis has at measurement scales of interval and ratio. See Illustration 4.17: Analyses Strategies for Predictive and Prescriptive Analytics. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 30) The marketing manager has asked you to provide customer data so that data analysis can be used in forming their targeted advertising campaigns. You extract the customer data and notice 218

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some customer profile fields had invalid entries. The recommended response is to A) properly prepare the data before starting the analysis. B) select a different data sample where the data are cleaner. C) select a larger sample data set and ignore the dirty data. D) perform the analysis and ignore the dirty data. Answer: A Explanation: If there is an analysis risk of dirty data issues, such as errors and empty fields, the recommended control is to properly prepare the data before starting the analysis. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 31) If the analysis risk is having poorly made or misleading visualizations, the recommended control is to A) perform descriptive analyses to compare and augment the visualization. B) acquire proper training for creating better visualizations. C) investigate if the dirty data are causing the misleading visualization. D) gather more data to meet the model's minimum data. Answer: A Explanation: Risk: Poorly made or misleading visualizations. Control: Perform descriptive analyses to compare and augment the visualization. Use visualization best practices. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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32) Desert Sand is a startup fashion brand. They anticipate that their sales and customer base will grow year over year. They are doing a data analysis of using cloud data services to address the growing data needs. What risk should be considered in the data strategy? A) Errors in variable transformations B) Errors in calculations when analyzing the data C) Data set is too small to capture more strategy trends D) Human behavior is not captured within cloud data services Answer: D Explanation: Risk: Human behavior is not captured. Control: Strong logs and segregation of duties in IT. Diff: 3 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 33) Desert Sand is a startup fashion brand. They anticipate that their sales and customer base will grow year over year. They are doing a data analysis of using cloud data services to address the growing data needs. What risk should be considered in the analysis strategy? A) Dirty data and outliers in the data cloud B) Difficulties capturing high velocity data as the company grows C) Errors in calculations in the analysis stage D) Loss of data due to security breaches through using cloud services Answer: C Explanation: The other choices are data risks. Diff: 2 LO: 4-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 34) For AIS, what control should be considered in the data strategy? A) Strong access controls B) Verifying analysis steps and calculations C) Performing sensitivity analyses for critical results D) Creating effective visualizations and explanations Answer: A Explanation: The other choices are analysis strategies. Diff: 1 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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35) For AIS, what control should be considered in the analysis strategy? A) Strong audit trails B) Verifying analysis steps and calculations C) Clear procedures D) Strong logs and segregation of duties in IT Answer: B Explanation: The other choices are data control strategies. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 36) The purpose of having strong logs and segregation of duties in IT is to minimize the risk of A) data manipulation from unauthorized access. B) dirty data and outliers. C) errors in variable transformations. D) human behavior not being captured. Answer: D Explanation: Risk: Human behavior is not captured. Control: Strong logs and segregation of duties in IT. Diff: 3 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 37) For financial accountants, what risk should be considered in the data strategy? A) Fake transaction data B) Calculation errors C) Biases and self-interests D) Data set is too small to capture trends Answer: A Explanation: The other choices are analysis control strategy risks. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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38) For financial accountants, what risk should be considered in the analysis strategy? A) Incorrect time period B) Missing operational and adjusting entries C) Biases and self-interests D) Dirty data and outliers Answer: C Explanation: The other choices are data risks. Diff: 2 LO: 4-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 39) For financial accountants, what controls should be considered in the data strategy? A) Testing for and correcting missing, duplicate, and outlier data B) Verifying analysis steps and calculations C) Checking authentication and approvals D) Sensitivity analysis for critical results Answer: A Explanation: The other choices are analysis controls. Diff: 1 LO: 4-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 40) For management accountants, what risk should be considered in the data strategy? A) Calculation errors B) Biases and self-interests C) Irrelevant data D) Human behavior is not captured Answer: C Explanation: The other choices are analysis risks or data risk for IT. Diff: 1 LO: 4-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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41) For management accountants, what risk should be considered in the analysis strategy? A) Errors in attributions B) Irrelevant data C) Data manipulation from unauthorized access or untrained employees D) Human behavior is not captured Answer: A Explanation: The other choices are data risks. Diff: 2 LO: 4-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 42) For management accountants, what controls should be considered in the analysis strategy? A) Sound personnel governance B) Verifying all steps and calculations C) Segregation of duties D) Verify system authorization Answer: B Explanation: The other choices are data controls. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 43) Pooch Wear is an online retailer of pet clothing and accessories. A data visualization has been created to show sales revenue and marketing costs for each month. Diagnosing objectives in data analysis strategies involve which of the following? A) Determining the period that had the highest marketing costs. B) Determining if there is a relationship between marketing costs and sales revenue. C) Determining the factors that caused lower sales revenues at the beginning of the year. D) Determining if marketing costs can be a predictor of sales revenue. Answer: C Explanation: Diagnostic analytics focus on explaining why something happened. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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44) Pooch Wear is an online retailer of pet clothing and accessories. A data visualization has been created to show sales revenue and marketing costs for each month. Descriptive objectives in data analysis strategies involve which of the following? A) Determining the factors that caused higher sales revenues at the end of the year. B) Determining the monthly average sales revenue. C) Determining how much should be spent in marketing to increase sales revenue by 50%. D) Determining if marketing costs can be a predictor of sales revenue. Answer: B Explanation: Descriptive analytics are used to understand what is currently happening or has happened in the past. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 45) Pooch Wear is an online retailer of pet clothing and accessories. A data visualization has been created to show sales revenue and marketing costs for each month. Diagnosing objectives in data analysis strategies involve which of the following? A) Determining the factors that caused lower sales revenues at the beginning of the year. B) Determining the period that had the highest marketing costs. C) Determining if there is a relationship between marketing costs and sales revenue. D) Determining if marketing costs can be a predictor of sales revenue. Answer: A Explanation: Diagnostic analytics help reveal why something has happened. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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46) Eco Clean is a manufacturer of eco-friendly products. To reduce outstanding accounts receivables, Finance has implemented a 2% discount on advance payments. A data visualization has been created to show accounts receivables by ageing buckets. Predictive objectives in data analysis strategies involve which of the following? A) Determining the new strategy for reducing outstanding accounts receivables. B) Determining what is causing the continued increase in accounts receivables for the 90+ days bucket. C) Determine if the company increased the discount to 3%, how would that affect the accounts receivable amounts? D) Determine how much of a discount is required to reduce accounts receivable by 25%. Answer: C Explanation: Predictive analytics help predict what might happen in the future. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 47) Eco Clean is a manufacturer of eco-friendly products. To reduce outstanding accounts receivable, Finance has implemented discounts on advance payments. A data visualization has been created to show accounts receivables by ageing buckets. Prescriptive objectives in data analysis strategies involve which of the following? A) Determining how much accounts receivables have been reduced since introducing the 2% discount. B) Determining what caused the increase in outstanding accounts receivables in Q3. C) Determining if the company increased the discount to 3%, how would that affect the accounts receivables? D) Determine how much of a discount is required to reduce accounts receivables by 10%. Answer: D Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 4-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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48) Bridgeport Tax is a tax accounting firm. They focus on personal tax of high-net worth individuals. You are asked to perform a predictive analysis of taxable capital gains. Which of the following data source is best to analyze this objective? A) Employment income data for the year B) The purchase and sale of investments during the year C) Carryover losses of previous year D) Taxable capital gains of the previous year Answer: B Explanation: Purchase and sale of investments will be the best predictor of capital gains. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 49) Bridgeport Tax is a tax accounting firm. They focus on personal tax of high-net worth individuals. You are asked to perform prescriptive analysis on IRS payment plan installments. Prescriptive objectives in this data analysis strategy involve which of the following? A) How can interest be minimized if payment plan instalments are made? B) What is the projected total interest payment if the payment plan is used? C) If tax liability was paid by 50%, how will it affect the payment terms? D) Determine what tax strategies should be used to reduce tax liability. Answer: A Explanation: Prescriptive analytics can tell us what we should do to meet a specific objective. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 50) Bridgeport Tax is a tax accounting firm. They focus on personal tax of high-net worth individuals. You are asked to perform a predictive analysis of taxable capital gains. Which of the following is a data risk in this data analysis? A) Errors were made in determining the capital tax rate. B) Client fails to report all of their taxable capital gains. C) There were carryover losses of the previous year. D) There were taxable capital gains in the previous year. Answer: B Explanation: A data risk is missing or incomplete data. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 226

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51) You are an internal auditor for Lower Humber Hospital. You are asked to perform descriptive analysis of internal controls for approval limits within purchasing operations. Which of the following data sources are best for analyzing this objective? A) A vendor master record listing B) A listing of all requisitions, and a listing of all requisitioners and their approval limits C) A listing of all requisition and their approval limits D) A listing of all purchase orders, and a listing of all requisitioners and their approval limits Answer: B Explanation: The other choices have incomplete data for analysis. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 52) You are an internal auditor for Lower Humber Hospital. You are asked to perform diagnostic analysis of internal controls for segregation of duties within the accounts payable operations. Which of the following data sources should be used for this objective? A) A listing of accounting staff and their purchasing role B) A listing of all invoices and the list of checks paid C) A listing of all requisitions and purchase orders D) A listing of all invoices, the listing of checks paid, and the check approval user Answer: D Explanation: The other choices have incomplete data for analysis. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 53) MCL Tax Services offer corporate tax services. Their client has production operations in multiple countries, and they need to analyze transfer pricing. Which of the following is not an analysis risk to consider when analyzing transfer pricing? A) Variable costs are missing some material costs. B) Opportunity cost is incorrectly calculated. C) New products were introduced and will have a production start date of next year. D) Tax rates in each country were incorrectly determined. Answer: C Explanation: The answer does not affect the data analysis. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 227

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54) MCL Tax Services offer corporate tax services. Their client has production operations in multiple countries, and they need to analyze transfer pricing. Which of the following is not a data risk to consider when analyzing transfer pricing? A) Variable costs are missing some material costs. B) Opportunity cost is incorrectly calculated. C) New products were introduced and will have a production start date of next year. D) Tax rates in each country were incorrectly determined. Answer: C Explanation: The answer does not affect the data analysis. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 55) You are an auditor and need to compare your client's financial ratios with industry ratios. The comparison will be an additional test to assess the reliability of the financial accounts. Which of the following is not an analysis risk to consider in this analysis? A) Industry ratios came from an unreliable data source. B) Visualizations used to compare ratios were not appropriate. C) Calculation of client ratios were incorrect. D) Incorrect assumptions were made in calculating financial ratios. Answer: A Explanation: An unreliable data source is a data risk. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 56) You are an internal auditor, and you need to review sales transactions at the end of the fiscal year. Based on past experience, you've seen that there is a higher risk of fraudulent transactions towards the end of the year. Which of the following is not an appropriate response to the data risk for analysis? A) Review data for missing data values. B) Perform a scatterplot chart to see if there are outliers in the sales data. C) Test the sales order data for data completeness. D) Review sales order approval workflow process. Answer: B Explanation: A scatterplot chart is analysis risk. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 228

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57) You are a management accountant, and you are developing an analysis strategy. Which analysis strategy involves categorical and ratio data measurement scales? A) A pie chart showing proportional sales amounts by product type B) A line chart showing stock prices over the past year C) A scatterplot showing accounts payables by the number of days outstanding D) Variances between budgeted spend and actual spend Answer: A Explanation: Category is product type and ratio is to total sales. Diff: 3 LO: 4-3 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 58) A cross tabulation analysis can use which data measurement scale? A) Categorical, ordinal, interval, and ratio B) Interval and ratio C) Categorical, interval, and ratio D) Categorical and ratio Answer: D Explanation: See Illustration 4.14 Analyses Strategies for Descriptive and Diagnostic Analytics. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 59) Information systems accountants would most likely plan data analyses when which of the following occur? A) A proposal of tax incentives for investments in green technologies. B) Internal controls were implemented to improve segregation on duties. C) A new product launch increased sales revenue for the company. D) Audit of financial statements is taking place. Answer: B Explanation: Internal controls are related information systems accountant functions. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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60) Tax accountants would most likely plan data analyses when which of the following occur? A) A tax rebate is being proposed for lower income individuals. B) Cryptocurrency tax rules have changed. C) Tax rate has increased for the high-income bracket. D) All of the answer choices are correct. Answer: D Explanation: All choices are related to tax accountant functions. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 61) MCL Tax Services offer corporate tax services. Their client is looking to relocate to another state to take advantage of lower corporate tax rates. Which of the following data sources are best for analyzing this objective? A) Corporate tax rates for each state and historic taxable income B) Corporate tax rates for each state and unemployment rate C) Corporate tax rates for each state and inflation rate D) Historic corporate tax rates for each state Answer: A Explanation: Corporate tax rates for each state and historic taxable income will be best answer the objective questions. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 62) MCL Tax Services offer corporate tax services. What data risks should be considered when evaluating the corporation's financial records for tax compliance? A) Corporate tax rates are expected to increase. B) There are errors in calculating transfer pricing. C) Foreign currency translations are incorrect. D) Taxable sales transactions are missing from the data set. Answer: D Explanation: The other choices are analysis risks. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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63) You are an auditor, and you need to test controls for employee travel expense reimbursements. Which of the following is an analysis risk that should be controlled for the analysis to be reliable? A) The data set provided for employee travel expenses was incomplete. B) The data set provided included non-travel expenses. C) The sample size used had missing data values. D) The sample size is not representative of employee travel expense transactions. Answer: D Explanation: The other choices are data risks. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 64) You are an auditor, and you need to test controls for employee travel expense reimbursements. Your data strategy should include A) extracting receipt information from all travel expense claims. B) preparing a scatterplot to show any data outliers. C) calculating the average expense claim by each employee. D) comparing the number of transactions to last year's numbers. Answer: A Explanation: The other choices are analysis strategies. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 65) You are an auditor, and you need to test controls for employee travel expense reimbursements. Your analysis strategy should include A) determining if the sample size of transactions is representative of all transactions. B) cleaning employee transactions if there are any missing or incorrect values. C) collecting the reimbursement check data. D) comparing the number of transactions to last year's numbers. Answer: D Explanation: The other choices are data strategies. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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66) As a result of the COVID-19 pandemic, office space demand has been in decline. You are a financial accountant at WorkHub, a shared office space rental company. You need to conduct data analysis to predict future cash flow. Your data strategy should include A) conduct a survey of existing customers to project future leases. B) extract historic cash flow transactions. C) collect industry data on office rental demand. D) All of the above choices are correct. Answer: D Explanation: The choices are data strategies. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 67) As a result of the COVID-19 pandemic, office space demand has been in decline. You are a financial accountant at WorkHub, a shared office space rental company. You need to do data analysis to predict future cash flow. Your analysis strategy should include A) conducting what-if scenarios to determine how cash flow will be affected. B) researching industry trends on office demands. C) extracting health reports to determine how long the pandemic is expected to last. D) All of the answer choices are correct. Answer: A Explanation: The other choices are data strategies. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 68) Select all that apply. When selecting a data strategy and an analysis strategy, A) use a development and ranking process to analyze data and analysis alternatives. B) consider and prioritize critical risks to both the data and the analysis strategies. C) determine and rank the stakeholders involved in the analysis. D) consider how the result of the analysis is best communicated to stakeholders. Answer: A, B Explanation: The other choices are not related to data or analysis strategies. Diff: 1 LO: 4-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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69) Select all that apply. Measured raw data A) are data created or captured by a controlled process. B) has a format that can be discrete. C) has a format that can be continuous. D) include data fields such as chart of account numbers. Answer: A, B, C Explanation: Measured raw data are created or captured by a controlled process to determine the value of the data. Examples include price, cost, number on hand, weight, date, hours worked, temperature, sensor readings, human observation, or economic value. Their format can be discrete or continuous data. Diff: 2 LO: 4-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 70) Select all that apply. Non-measured raw data A) are data created or captured by a controlled process. B) has a format can be discrete. C) has a format can be continuous. D) include data fields such as gross margin percentage. Answer: B Explanation: Non-measured raw data are often created automatically by the computer or company policy for control. These fields are typically formatted as discrete data. Diff: 2 LO: 4-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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71) Select all that apply. Calculated data A) are data created when one or more fields in a particular record have any number of mathematical operators. B) can be formatted as continuous. C) are data created automatically by the computer or company policy. D) can be formatted as discrete. Answer: A, B, D Explanation: Calculated data are created when one or more fields in a particular record (row) have any number of mathematical operators (such as +, -, ×, %) applied, and often are derived from using the data in another field or fields within the same record (never across different rows). These fields can be formatted as discrete or continuous data. Diff: 2 LO: 4-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 72) Select all that apply. An example of categorical (nominal) data are A) US states B) tax rates. C) accounts receivable balances. D) model type. Answer: A, D Explanation: Categorial (nominal) data are labeled or named data that can be sorted into groups according to specific characteristics. The data do not have a quantitative value. Diff: 1 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 73) Select all that apply. Examples of common data risks include A) governance risks. B) non-representative sample selections. C) dirty data. D) outlier data points. Answer: B, C, D Explanation: Governance risks is not related to data. Diff: 1 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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74) Select all that apply. Examples of dirty data include A) missing data. B) duplicated data. C) incorrectly formatted data. D) data anomalies. Answer: A, B, C Explanation: Dirty data include missing, invalid, duplicate, and incorrectly formatted data. For example, the purchase orders, invoices, or checks written by the company should be sequentially accounted for, with no missing numbers or two with the same identifying number. Diff: 1 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 75) Select all that apply. Examples of common analysis risks include A) the sample is not representative. B) poorly made or misleading visualizations. C) data has incomplete data. D) uncorrected and uncontrolled dirty data issues. Answer: A, B, D Explanation: Incomplete data are a data risk. Diff: 1 LO: 4-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 76) Select all that apply. You are an information systems accountant, and you are looking to improve batch processing of sales order transactions into a data warehouse. Your data strategy should include A) counting the number of records that are being processed each night. B) determining whether the process time be improved if the batch were divided into two separate processes. C) extracting system logs of batch process times. D) investigating if the data should be imported into cloud data services instead of an inhouse data warehouse. Answer: C Explanation: The other choices are analysis strategies. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 235

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77) Select all that apply. You are a tax accountant, and a new tax law has been passed that potentially changes your client's tax liability. Your analysis strategy should include A) using last year's tax return to estimate how the change in tax law affects your client's tax liability. B) estimating your client tax return for the current year and calculating the client's tax liability using the changes in the tax law. C) reviewing your clients' tax data for any omission on taxable income. D) preparing a visualization showing the variance tax liability of the current tax law and the new tax law. Answer: A, B, D Explanation: Data omissions relate to data strategies. Diff: 3 LO: 4-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 78) You are an auditor, and you need to evaluate the risk of material misstatements of your client's general ledger accounts. What would be a risk to the analysis strategy in this analysis? Select all that apply. A) Calculating materiality thresholds using incorrect assumptions. B) There are calculation errors when totaling prior year general balances. C) Variances between current and prior years were mistaken as normal variances. D) There were some general ledger accounts that were missing from the analysis. Answer: B, C Explanation: Missing data are data risk. Diff: 2 LO: 4-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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79) Deep Dish Pies is a pizza company and they have implemented online ordering. A database was developed to track online customer orders. Fill in the field type (non-measured raw data, measured raw data or calculated field) and the field measurement scales (categorical, ratio, interval, ordinal) for the following fields. Field Name CustomerID DeliveryAddressState DeliveryAddressZip TotalValue PizzaType OrderQuantity ItemPrice PaymentMethod CustomerSatisfactionRating OrderDate Answer: Field Name CustomerID DeliveryAddressState DeliveryAddressZip TotalValue PizzaType OrderQuantity ItemPrice PaymentMethod CustomerSatisfactionRating OrderDate

Field Type

Field Measurement Scale

Field Type Non-measured raw data Non-measured raw data Non-measured raw data Calculated data Non-measured raw data Measured raw data Measured raw data Non-measured raw data Measured raw data Non-measured raw data

Field Measurement Scale Categorical (Nominal) Categorical (Nominal) Categorical (Nominal) Ratio Categorical (Nominal) Ratio Ratio Categorical (Nominal) Ordinal Interval

Diff: 1 LO: 4-2 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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80) Discuss the difference between categorical (nominal) data and ordinal data. Within a tax accounting context, provide an example of a categorical (nominal) data and an ordinal data. Answer: Categorical (nominal) data are labeled or named data that can be sorted into groups according to specific characteristics. An example is the marital status field on income tax returns. The categories are single, married filing jointly, or married filing separately. Ordinal data are ordered or ranked categorical data. Distance between the categories does not need to be known or equal. An example is tax brackets. The ordered category would be $0 to $10,275; $10,276 to $41,775; $41,776 to $89,075; etc. Diff: 2 LO: 4-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 81) Discuss the difference between interval data and ratio data. Within an AIS context, provide an example of interval data and ratio. Answer: Interval data are ordinal data that have equal and constant differences between observations and an arbitrary zero point. An example is timestamp on automated processing jobs. Ratio data are interval data with a natural zero point. A natural zero point means that it is not arbitrary. An example is the number of data records being transformed into a self-service business intelligence (SSBI) software. Diff: 2 LO: 4-4 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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82) Walk on Clouds is an online retailer of shoes. They want customers to be 100% satisfied with their purchase. They have increased their return policy from 30 days to 60 days. A data analysis is required to show how the changes affected sales and sales returns. Provide examples of two common data risks and a control for each that would reduce the risk. Answer: Risk Control 1. The risk of not getting representative Creating visualizations of the data to see if data for the time period being analyzed. trends can be shown. 2. Sales data and sales return data has Testing authorization and access controls. fraudulent data. Having restricted access to sales transaction and authorization on refunds approvals. 3. There is missing data. For example, Performing data cleaning tests to find and refunds that are processed over the phone correct missing data. Add refunds that were were not entered into the system and thus missing from the data set. not part of the data set. Diff: 2 LO: 4-4 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 83) You are auditing accounts payables for your client. You cross-check payment transactions by contacting every vendor providing goods and services to verify transaction amounts and transaction data. Provide examples of two common data risks and a control for each that would reduce the risk. Answer: Risk Control Verify representativeness of sample. 1. The sample transactions were not a representative sample of the payment process. 2. There are missing data check numbers. Run analytic procedures and detect Data that has been captured and extracted by payment check numbers that are your clients are often not able to be verified missing. for data completeness or accuracy Diff: 2 LO: 4-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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84) Eagle Eye is a manufacturer of drones for the global market. Warranty costs have been increasing. You are a financial accountant and data analysis is needed to estimate warranty expenses for the quarterly financial statements. Provide examples of two common analysis risks and a control for each that would reduce the risk. Answer: Risk Control 1. Incorrect assumptions made on warranty Review warranty estimates of other percentages. companies in the industry to see if the estimates were in alignment. 2. Incorrect calculations — warranty Review data transformations to make estimates were based on sales values; sure that data are cleaned and ready for however, global sales were not translated in analysis. USD so the calculations were incorrect. Diff: 2 LO: 4-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 85) Blue Book Group is a book retailer. They have implemented a new inventory management system that triggers automatic orders if stock falls under a defined reorder point. You are an internal auditor, and you need to analyze the effectiveness of the new inventory management system. Provide examples of two common analysis risks and a control for each that would reduce the risk. Answer: Risk Control 1. Errors in calculating the order total. Verify total counts. For example, extract data and use analytic procedures to count totals. 2. Poorly made or misleading Perform descriptive analyses to compare visualizations. and augment the visualization. Use visualization best practices. 3. Insufficient knowledge or experience in Acquire proper knowledge of inventory performing the analysis strategy or systems and demand planning. interpreting the results. Diff: 2 LO: 4-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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86) Discuss the difference between measured raw data and non-measured raw data. Within a tax accounting context, provide an example for each type. Answer: Measured raw data are data created or captured by a controlled process to determine the value of the data. An example is total tax credits. Non-measured raw data are often created automatically by the computer or company policy for control. An example is ClientID. Diff: 2 LO: 4-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 87) Discuss how predictive analysis strategies differ from prescriptive analysis strategies. Answer: Predictive analysis strategies use historical data to create models that estimate a future value or outcome. Prescriptive analysis strategies help determine which option is most likely to produce the best outcome given the objective. Predictive and prescriptive analysis strategies can determine the best use of resources, improve performance, anticipate market reactions and movements, and avoid process breakdowns. Diff: 2 LO: 4-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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88) You are a management accountant at Eastern College, a state-funded school. The government requires an annual report of spend. A visualization has been created to show spend by category for the last three fiscal years.

Questions: 1) Which types of data analysis objective (descriptive, diagnostic, predictive, and prescriptive) is this? Explain why. 2) List the data fields being used. For each data field indicate the field type (measured raw data, non-measured raw data, or a calculated field) and the field measurement scale (categorical, ordinal, interval, ratio). Answer: 1) This is a descriptive analysis since historic transactions are being used to know more about what happened on the last three fiscal years. 2) Field Field Type Field Measurement Scale Fiscal Year Non-measured raw data Interval Category Non-measured raw data Categorical (Nominal) Total Calculated data Ratio Diff: 2 LO: 4-2, 4-4 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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89) Harper Legal provides business law services. Some of the clients are struggling financially and bad debt write-offs have been increasing. They want to predict bad debt write-off amounts based on the values of accounts receivable. A visualization was created to show historic data of bad debt write-off amounts against its related accounts receivable balances.

Questions: 1) Which types of data analysis objective (descriptive, diagnostic, predictive, and prescriptive) is this? Explain why. 2) List the data fields being used. For each data field indicate the field type (measured raw data, non-measured raw data, or a calculated field) and the field measurement scale (categorical, ordinal, interval, ratio). Answer: 1) This is a predictive analysis since we want to predict bad debt write-off amounts based on the values of the accounts receivable. 2) Field Field Type Field Measurement Scale Bad Debt Expense Write-of Measured raw data Categorical (Nominal) Accounts Receivable Amount Measured raw data Ratio Accounts Receivable ID Non-measured raw data Ratio Diff: 2 LO: 4-2, 4-4 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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90) You are a tax accountant, and you need to analyze your client's investment account to help minimize their taxes by selling stocks to generate capital losses. A visualization has been created to show market values and book values for the last fiscal year.

Questions: 1) What types of data analysis objective (descriptive, diagnostic, predictive, and prescriptive) is this? Explain why. 2) List the data fields being used. For each data field indicate the field type (measured raw data, non-measured raw data, or a calculated field). For each data field, indicate the Field Measurement Scale (Categorical, Ordinal, Interval, Ratio) Answer: 1) This is a prescriptive analysis since we want to determine the course of action needed to minimize taxes. 2) Field Stock Value Valuation Category (Book Value, Market Value) Month

Field Type Measured raw data Measured raw data

Field Measurement Scale Ratio Categorical (Nominal)

Measured raw data

Interval

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91) You are an auditor, and you are analyzing vendor payments for fraud. You look at possible approaches for analyzing data such as identifying vendor addresses that match payroll addresses, reviewing vendors with similar vendor names, or identifying duplicate vendor payments.

Questions: 1) Which types of data analysis objective (descriptive, diagnostic, predictive, and prescriptive) is this? Explain why. 2) List the data fields being used. For each data field indicate the field type (measured raw data, non-measured raw data, or a calculated field) and the field measurement scale (categorical, ordinal, interval, ratio). Answer: 1) This is a diagnostic analysis since we want to determine why something happened during the year. For example, did the overall transaction count increase due to the spike in the month of August. 2) Field Total Payment Transaction Count Month

Field Type Measured raw data Measured raw data Measured raw data

Field Measurement Scale Ratio Ratio Interval

Diff: 2 LO: 4-2, 4-4 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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92) You are an AIS accountant for Orange Airlines. A new IT support system was implemented to track IT issues. The ticketing data has been extracted from the tracking system and exported into an Excel worksheet. Consider the following Excel worksheet showing support tickets: A B C 1 TicketID EmployeeID IssueType 2 20002 203211 Software 3 20003 203212 Software 4 20004 203213 Hardware 5 20005 203214 Network … … … 2029 22029 205304 Network 2030 22030 205303 Hardware

D E F TimeToResolve Date SatisfactionScore 45 2023-02-02 10 34 2023-01-07 7 345 2023-03-14 8 5 2023-03-16 10 … … … 10 2023-11-16 2 139 2023-12-17 1

Question: For each type of data analysis (descriptive, diagnostic, predictive, and prescriptive), state an objective question for the analysis. What data items would you use in your data strategy? Fill in the table below. Analysis Type Descriptive Diagnostic Predictive Prescriptive

Objective Question

Data Fields Used in Data Strategy

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Answer: Analysis Type Descriptive

Diagnostic

Predictive

Prescriptive

Objective Question Data Fields Used in Data Strategy TicketID, IssueType, Date How many tickets were created for software in the month of May? TicketID, Date Why were there so many network tickets created in November If the number of support TicketID, SatisfactionScore, employees increased, what TimeToResolve would be the projected satisfaction score and projected time to resolve each ticket? TicketID, IssueType, TimeToResolve Can the time to resolve network issues be reduced if more training is given to network staff?

Diff: 2 LO: 4-1, 4-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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93) You are a budget manager, and you are conducting data analysis of office expenditures. The budgeting system provided a data dictionary for the fields that were extracted for analysis. Data Field Category PY_Budget PY_Actual PY_Variance Current_Budget Current_Actual Current_Variance

Description Spend Category — IT Hardware, IT Software, Office Furniture, Office Supplies, Office Equipment Budget value from prior year Actual spend from prior year Variance between budget and actual spend from prior year Budget value for current year Actual spend for current year Variance between budget and actual spend for current year

For each type of data analysis (descriptive, diagnostic, predictive, and prescriptive), state an objective question for the analysis. What data items would you use in your data strategy? Fill in the table below. Analysis Type Descriptive Diagnostic Predictive Prescriptive Answer: Analysis Type Descriptive

Diagnostic Predictive

Prescriptive

Objective Question

Data Fields Used in Data Strategy

Objective Question Data Fields Used in Data Strategy What was the total variance Category, PY_Variance between budget and actual in the prior year for each category? What categories caused the Category, Curent_Variance variances to be high? What is the projected actual Category, PR_Actual, Current_Actual spend for the next fiscal year given historic actual spend? If the budget was increasedCategory, PR_Actual, Current_Actual by 25% for IT equipment in the next budget period, how much should be budgeted for IT software?

Diff: 2 LO: 4-1, 4-2, 4-3, 4-4 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 248

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94) You are a tax accountant, and you are analyzing your client's medical claims on their income tax. Historically the client has a large number of medical claims that need to be reviewed and analyzed. Describe your data strategy, your analysis strategy, and one possible risk for each strategy. Provide a control suggestion for each risk. Fill in the table below. Data Analysis Project Plan Data strategy Analysis strategy Risks in data and analysis strategies i. Data Risk ii. Analysis Risk Answer: Data Analysis Project Plan Data strategy Request the itemized list of medical claims in a spreadsheet. Requires a list of transactions of the previous year so the data can be compared. Analysis strategy Total medical expense from current year and prior year to see if the numbers are reasonable. Create a visualization to show the medical claim by date to see there are any trends. Risks in data and analysis i. Client may include fraudulent medical claim strategies request for receipt to ensure that the data are i. Data Risk valid. ii. Analysis Risk ii. There be an incorrect assumption that medical claim should be spread evenly throughout the year so totaling expenses by month maybe an incorrect analysis. Calculating totals by year may be a better analysis strategy. Diff: 2 LO: 4-1, 4-2, 4-3, 4-4 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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95) Northwinds Hospital lacked a supplier management system. They decided to purchase a software-as-a-service (SAAS) solution. The system can be used to monitor supplier performance. Data from the system has been extracted for analysis. The data fields and their descriptions are provided. Data Field SupplierID SupplierName TotalOrderValue SupplierSatisfactionScore ComplianceToContractScore

ReturnedStatus ProcureToPayDays OrderDate PaymentDate SupplierCategory

Description Internal system identifier of the supplier Suppler name Total value of orders Customer satisfaction score from 1 to 10 A score from 1 to 10 that assesses the supplier's compliance to the negotiated contract Status of order: Open, Closed, Returned Number of days between the order date to payment date Date of order Date of payment Category of the supplier, for example, Lab Supplies, Office Supplies, etc.

Create a diagnostic data analysis project plan that will identify which suppliers were under performing. Fill in the table below. Data Analysis Project Plan 1. Project objective and specific question 2. Data strategy 3. Analysis strategy 4. Risks in data and analysis strategies i. Data Risk ii. Analysis Risk 5. Controls for data and analysis strategies i. Data strategy controls ii. Analysis strategy controls

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Answer: Data Analysis Project Plan 1. Project objective and specific Objective: What is causing the suppliers to question underperform? Specific Question: Are suppliers underperforming based on the number of the procure to pay days being too high? 2. Data strategy Extract data from the supplier management system. Data should be cleaned for missing data. E.g., there could be some missing scores. 3. Analysis strategy Calculate the averages for Supplier Satisfaction Score, Procure to Pay Days and Compliance to Contract. Compare the average Supplier Satisfaction Score with the average Procure to Pay Days for each vendor. 4. Risks in data and analysis strategies i. Errors in ProcureToPayDays calculation. i. Data Risk ii. Vendors that have little spend may not ii. Analysis Risk provide a good representation of vendor performance. 5. Controls for data and analysis strategies i. Validate ProcureToPayDays calculation. i. Data strategy controls Using order date and payment date ii. Analysis strategy controls ii. Validate assumptions with procurement manager. Diff: 3 LO: 4-1, 4-2, 4-3, 4-4 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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96) Pulse Legal is a legal consulting company. Their lawyers often travel to client sites. Travel expenses are entered in the expense reporting system for reimbursements. You are an internal auditor, and you need to analyze expense reports to flag risks associated with fraud and non-compliance to the travel policy. You extracted the following data from the expense reporting system. A B C D 1 ExpenseID EmployeeID ExpenseType Travel Date 2 20002 203211 Airlines 2023-02-02 3 20003 203211 Food 2023-03-07 4 20004 203213 Hotel 2023-05-14 5 20005 203213 Airlines 2023-06-16 … … … … 1039 21039 205304 Taxi 2023-08-16 1040 21040 205303 Food 2023-09-20

E F ClaimAmt TravelDays 809.00 5 24.00 2 34.00 8 449.00 3 … … 34.00 2 69.00 2

Create a prescriptive data analysis project plan that will identify which suppliers were under performing. Fill in the table below. Data Analysis Project Plan 1. Project objective and specific question 2. Data strategy 3. Analysis strategy 4. Risks in data and analysis strategies i. Data Risk ii. Analysis Risk 5. Controls for data and analysis strategies i. Data strategy controls ii. Analysis strategy controls

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Answer: Data Analysis Project Plan 1. Project objective and specific Objective: Determine if there are risk question associated with expense reimbursements. Specific Question: Are there transactions that fall outside of the travel policy? 2. Data strategy Extract expense claims from the expense reporting system. Extract data from the company's credit card statements. Ensure receipts data are also collected. 3. Analysis strategy Determine if expenses are within the company's dollar threshold as defined in the travel policy. Analyze data for any duplicate transactions. Analyze data to ensure that travel dates are in line with the expense dates. 4. Risks in data and analysis strategies i. Expense claims can be duplicated. i. Data Risk ii. Errors in calculations when translating ii. Analysis Risk values from international currencies to USD. 5. Controls for data and analysis strategies i. Data strategy controls i. Ensure that receipts are uploaded. Use ii. Analysis strategy controls analytics procedures to detect duplicated data. ii. Extract daily exchange rates and apply the rates against foreign charges. Validate that converted values match. Diff: 3 LO: 4-1, 4-2, 4-3, 4-4 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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97) Pear Tree Trust is a bank with employees across the country. IT has requested that users report any suspicious emails since cyber-attacks are on the rise and can cause serious financial losses for a business. Users report email issues directly into the IT ticketing system. You are an AIS accountant, and you need to perform prescriptive analysis. You extract data from the employee expense reports for the last two years. A B C D 1 IncidentID ThreatType UserAffectedCnt DateTime 2 10002 Spam 34 2023-02-02 23:32 3 10003 Malware 23 2023-03-07 04:34 4 10004 Data Exfiltration 2 2023-05-14 12:22 5 10005 Blackmail 1 2023-06-16 11:02 … … … … 5039 15039 Phishing 555 2023-08-16 01:02 5040 15040 Spam 34 2023-09-20 00:33

E RiskCategory Low Medium Medium Low … Medium Medium

Create a prescriptive data analysis project plan that will determine what actions to be taken to reduce risk to bank. Fill in the table below. Data Analysis Project Plan 1. Project objective and specific question 2. Data strategy 3. Analysis strategy 4. Risks in data and analysis strategies i. Data Risk ii. Analysis Risk 5. Controls for data and analysis strategies i. Data strategy controls ii. Analysis strategy controls

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Answer: Data Analysis Project Plan 1. Project objective and specific Objective: Determine if there are opportunities question for lowering risk to the bank. Specific Question: What threats are the highest that should require an immediate action plan? How much investment should be made to email security to reduce the risks? 2. Data strategy Extract data from the ticketing system. Clean the data from any missing fields such as risk category and threat type. 3. Analysis strategy Create a pivot table to show which threat had most occurrence and determine which threat caused the highest risk. 4. Risks in data and analysis strategies i. Data can be missing as employees may not i. Data Risk report all incidences. ii. Analysis Risk ii. The number of incidence report may be too small for accurate inferences. There can be incorrect assumptions made on modeling. 5. Controls for data and analysis strategies i. IT system checks can be setup to identify i. Data strategy controls potential email threats in addition to employee ii. Analysis strategy controls reports. ii. Gather more data from system reports if the sample size it too small. Acquire proper training and increase understanding of security controls. Diff: 3 LO: 4-1, 4-2, 4-3, 4-4 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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98) OneSun is a manufacturer of roof solar panels. The production manager provided you with a scatterplot chart showing material costs against production units. You are reviewing the analysisreport to ensure that all steps of the data strategy have been completed.

Questions: a) What type of analysis is being accomplished using the scatterplot chart? Explain why b) What can be a specific objective question being asked in this analysis? c) What data risk and analysis risk should be considered in the data analysis strategy? How can the identified risks be controlled?

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Answer: a) This is a predictive analysis since we are using linear regression to predict material costs based on production units. b) What would be the estimated cost if production units were 2,500? c) Risks in data and analysis strategies i. Data Risk i. The production department may have ii. Analysis Risk incorrect data if production units are being manually counted. ii. Modelling material costs using production units alone might not be an accurate model. A regression analysis using multiple variables such as machine down time, might be a more reliable model. 5. Controls for data and analysis strategies i. Review the inventory control process to i. Data strategy controls ensure that production units being ii. Analysis strategy controls reported are reliable. ii. Use different variations of the model and test the model results for reliability. Diff: 3 LO: 4-1, 4-2, 4-3, 4-4 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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99) You are a tax accountant for Good Earth Beans, a coffee shop with franchises in northeastern states. The CFO has asked you to analyze if increases in sales tax rates will affect sales. A data visualization was created as a draft, and you need to review it for improvements.

Questions: a) What is the objective of the analysis? b) What is the type of analysis (descriptive, diagnostic, predictive, prescriptive)? Explain your answer. c) What data fields are being used in this visualization. Indicate the field type and the field measurement scale for each data field. d) What data sources should be included in the analysis to better address the objectives of the analysis. Explain your answer. Answer: a) The objective is to analyze if increases in sales tax ratio will affect sales. b) This is a predictive analysis because we are comparing the data relationship of two variables (state sales tax and sales) to make predictions. c) The data fields are: Data Field Sales Tax Rate State Sales Tax Collected

Field Type Measured raw data Non-measured raw data Calculated data

Field Measurement Scale Ratio Category Ratio

d) The data strategy should include historic state sales tax and historic sales. Historic data are needed to show trends. The historic relationship between state sales tax and sales can be used to make predictions on future sales based on sales tax rate changes. Diff: 3 LO: 4-1, 4-2, 4-3, 4-4 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 258

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100) Mama's Pies is a pizza producer. They are looking to maximize contribution margin on their pizza. As shown in the visualization, raw materials have been affected by inflation which is reducing their contribution margin. You are a management accountant, and you need to conduct a data analysis to determine what price should be charged for each pizza to maintain a contribution of 15%.

Create a prescriptive data analysis project plan for this analysis. Fill in the table below. Data Analysis Project Plan 1. Project objective and specific question 2. Data strategy 3. Analysis strategy 4. Risks in data and analysis strategies i. Data Risk ii. Analysis Risk 5. Controls for data and analysis strategies i. Data strategy controls ii. Analysis strategy controls

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Answer: Data Analysis Project Plan 1. Project objective and specific Objective: Determine if the sale price of question pizza needs to be increased to achieve a contribution margin of at least 15%? Specific Question: What should the sale price of pizza be if a contribution margin 15% is required. 2. Data strategy Extract historic costs of all raw materials. Acquire inflation projection data on food prices, if it is available. 3. Analysis strategy Total the raw materials costs and create a line chart showing sales price, contribution margin and raw material costs. The sales price should be based on achieving at 15% contribution margin. 4. Risks in data and analysis strategies i. There may be missing raw material costs i. Data Risk from the analysis. For example, sausage, ii. Analysis Risk mushrooms, etc. ii. Contribution margin calculations may be incorrect. 5. Controls for data and analysis strategies i. Data strategy controls i. Verify that all ingredients for making ii. Analysis strategy controls pizzas are included in the raw material costs. Raw material purchases can be reviewed to ensure that the data are complete. ii. Increase knowledge in cost accounting concepts and validate contribution calculations. Diff: 3 LO: 4-1, 4-2, 4-3, 4-4 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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CHAPTER 5 Test Bank Analysis: Data Preparation Contents Multiple Choice ........................................................................................................................... 263 Multiple Select ............................................................................................................................ 292 Short Answer............................................................................................................................... 292 Brief Exercises ............................................................................................................................. 298 Exercises ...................................................................................................................................... 306 Key Statistics on Questions ......................................................................................................... 314

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Multiple Choice

1. Data preparation includes the process of A. gathering and integrating during the data analysis phases. B. capturing data from transactional systems. C. profiling, cleaning and restructuring data prior to analysis. D. assessing if the data will address the objectives of the analysis. Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data preparation is the process of profiling, cleaning, restructuring, and integrating data prior to processing and analysis. It helps ensure high-quality data and, therefore, improved decision-making. 2. Data profiling involves the following parts: A. investigating data quality, investigating data structure, and investigating quantity. B. investigating data quality, investigating data structure, and deciding and informing. C. profiling, cleaning, restructuring, and integrating data. D. investigating data quantity and investigating data structure. Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data profiling is the process of investigating data quality and structure. It has three parts: 1. Investigating data quality. 2. Investigating data structure. 3. Deciding and informing. 3. Which data valuation rule is the most appropriate to validate the TAXAMOUNT column? Customer ID 203211 203212 203213 203214 203215 …

Street Address 245 Fleet St 14 First St 3403 Main St 3306 Second St 341 Liberty St …

SALESAMT $203.34 $22.52 $13.34 $205.36 $123.44 …

TAXAMOUNT $20.33 $2.33 $1.30 $20.54 $123.43 …

A. TAXAMOUNTVALID = IF TAXAMOUNT > SALESAMT THEN “OK” ELSE “ISSUE”. B. TAXAMOUNTVALID = IF TAXAMOUNT > 0 THEN “OK” ELSE “ISSUE”. C. TAXAMOUNTVALID = IF SALESAMT > 0 and TAXAMOUNT > 0 THEN “OK” ELSE “ISSUE”. D. TAXAMOUNTVALID = IF TAXAMOUNT < SALESAMT AND TAXAMOUNT >=0 THEN “OK” ELSE “ISSUE”.

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Ans: D, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: D is the most appropriate since it ensures that the tax amount is less than the sales amount and that the value is greater or equal to 0. 4. When data profiling is being conducted, the deciding and informing step involves A. making decisions about whether it is possible to address the data quality and structure issues. B. determining the cost of performing the data analysis. C. considering the possible consequences if the analysis is incorrectly interpreted. D. considering the risks of selecting data that does not address the objectives for the analysis. Ans: A, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Deciding and informing involves making decisions about whether it is possible to address the identified issues, determining what the cost of doing so would be, and considering the possible consequences if the issues are not addressed. 5. Data quality can be assessed based on the A. completeness, accuracy, and reliability of the data. B. correctness, validity, consistency, and completeness of the data. C. accessibility, reliability, and integrity of the data. D. correctness, validity, integrity, and completeness of the data. Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Investigating data quality involves searching for anomalies in the data. Data anomalies occur when the data do not meet expectations of correctness, validity, consistency, and completeness. 6. Which of the following is an example of data being valid but incorrect? A. A customer’s email address has the incorrect format, and the email is for a different customer. B. A customer’s email address has the incorrect format, but the email is for the correct customer. C. A customer’s email address has the correct format, and the email is for the correct customer. D. A customer’s email address has the correct format, but the email is for a different customer. Ans: D, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An incorrect value means the wrong value is assigned, and an invalid value means an unacceptable value is assigned.

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7. Harvest Dinners is an online dinner delivery service. Analysis by customer location is required so that marketing campaigns can highlight locally-sourced ingredients. Data was extracted to the following table. Customer ID 203211 203212 203213 203214 203215 …

Address 245 Fleet St, Ann Arbor 14 First St, Flint 3403 Main St, Flint 3306 Second St, Detroit 341 Liberty St, Novi …

State MI Mich Michigan MI MI …

What data problem exists in the table? A. The address field should have the city separated into its own column and the State field has inconsistent values. B. The address field should have the city separated into its own column and the State field has incomplete values. C. The address field has incomplete data, and the State field has incorrect values. D. The address field has incomplete data, and the State field has incomplete values. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: The address field is a composite column so the city should be separated into its own column. State has correct values, but the values are inconsistent since the same characteristic is represented multiple ways. 8. Which of the following is an example of data being invalid but the data being correct? A. A customer’s email address has the correct format, but the email is for a different customer. B. A customer’s email address has trailing empty spaces, and the email is for a different customer. C. A customer’s email address has trailing empty spaces, but the email is for the correct customer. D. A customer’s email address has the correct format, and the email is for the correct customer. Ans: C, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An incorrect value means the wrong value is assigned, and an invalid value means an unacceptable value is assigned. 9. You are viewing data from the inventory management system and assessing the correctness of the data. What would be a method to test the correctness of the reorder point values? A. Explore data to determine if there are any unusual high vendor quantities of a particular value. B. Get assurance from the inventory manager that the reorder points are correct. C. Explore data to see if there are any reorder point values that have invalid entries. 265

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D. Explore data to confirm that all inventory records have reorder points. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: There are several ways to detect such errors. Profiling techniques, such as exploring outliers, can also be useful. 10. Data inconsistency occurs A. when the same characteristic is represented multiple ways. B. when there are missing values in the data. C. when a wrong value is assigned. D. when an unacceptable value is assigned. Ans: A, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data inconsistency occurs when the same characteristic is represented multiple ways. 11. You are reviewing data quality of the supplier addresses from the customer database. What conclusions can you make about the data quality of the State field? CustomerID 203211 203212 203213 203214 203215 …

StreetAddress 245 Fleet St 14 First St 3403 Main St 3306 Second St 341 Liberty St …

City Rockville Rockville Rochester Buffalo Springfield …

State MA Maryland NY New York Not Applicable …

Telephone 240.243.2400 240.243.5110 585-450-9910 7162995229 241.233.4111 …

A. The State field has invalid data. B. The State field has valid data. C. The State field has consistent data. D. The State field has correct data. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An invalid value means an unacceptable value is assigned. “Not Applicable” would be an invalid data. 12. You are reviewing data quality of supplier addresses from the customer database. What conclusions can you make about the data quality of the Telephone field? CustomerID 203211 203212 203213 203214 …

StreetAddress 245 Fleet St 14 First St 3403 Main St 3306 Second St …

City Rockville Rockville Rochester Buffalo …

State MA Maryland NY New York …

A. The Telephone values are correct but are inconsistent. B. The Telephone values are incorrect and inconsistent. 266

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Telephone 240.243.2400 240.243.5110 585-450-9910 7162995229 …

C. The Telephone values are correct but are not complete. D. The Telephone values are correct and are consistent. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data inconsistency occurs when the same characteristic is represented multiple ways. Data are incorrect when the value assigned to an entity’s characteristic is wrong. 13. You are reviewing the data quality of supplier addresses from the customer database. What conclusions can you make about the quality of the Street Address field? CustomerID 203211 203212 203213 203214 …

StreetAddress 245 Fleet St 14 First St 3403 Main St 3306 Second St …

City Rockville Rockville Rochester Buffalo …

State MA Maryland NY New York …

Telephone 240.243.2400 240.243.5110 585-450-9910 7162995229 …

A. The Street Address values are valid and consistent. B. The Street Address values are valid but inconsistent. C. The Street Address values are complete but inconsistent. D. The Street Address values are complete but invalid. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An invalid value means an unacceptable value is assigned. Data inconsistency occurs when the same characteristic is represented multiple ways. 14. You are testing for data completeness in the vendor payments table. Payments are made by checks with sequential check numbers. How can data completeness be tested? A. The purchase order totals can be compared with the check totals. The data is incomplete if there are differences between values. B. The check number can be ordered. If there is a check number that is missing, then there is a missing instance. C. The invoice totals can be compared with the purchase order totals. The data is incomplete if there are differences between values. D. Create a line chart showing the payment trends by date. If there are periods without any payments, there could be missing data. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: If there is a sequential number for each check, then a missing number will indicate that check is missing. 15. From a data structure perspective, data analytics can be performed more efficiently by A. having unambiguous table and column descriptions. B. having more crosstabulation table structures compared to flat table structures. C. having more flat table structures compared to crosstabulation table structures. 267

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D. using a mix of multi-valued columns and single-valued columns. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Poorly named columns and tables make it complicated to develop information models and to conduct analysis. 16. You are preparing to perform data analysis on inventory data. An extract of inventory records was provided. PartNo 113261 N3262 113274 …

Location 234.34 342.23 324.23 453.22 …

$ $34.34 $4.34 $136.04 -$65.65 …

Qty

ROP 10 50 10 20

34 353 -75 1 …

…

Identify a data structure issue with the data.

A. The “Qty” column should be renamed to be “Quantity”. B. The “$” column should be renamed to be more descriptive. C. The “Qty” column has a negative value which is not valid. D. The “PartNo” column has a data value that is missing. Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Poorly named columns make it complicated to develop information models and to conduct analysis. The “$” is ambiguous and should be renamed to be more descriptive. “Qty” is a common abbreviation, so it does not need to be changed. C and D are data quality issues. 17. Why is it important to address ambiguous descriptions when investigating data structure? A. Ambiguous descriptions make it complicated to develop and interpret the results of the analysis. B. Ambiguous descriptions are characteristics of poor data quality. C. Poorly named columns make it complicated to interpret the results of the analysis. D. Poorly named columns make it complicated to develop information models and to conduct analysis. Ans: D, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Along with their quality, data is investigated to assess whether they are structured in a way that makes data analytics easy and efficient. Poorly named columns make it complicated to develop information models and to conduct analysis. 18. An analytical database A. is the integrated data set used for analysis purposes. B. consists of an integrated set of tables, which is a data model, and each table has several columns. 268

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C. are often posted in the cloud where they can be used simultaneously by many users. D. All of the answer choices are correct. Ans: D, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: All of the answer choices are correct. 19. Slicing and dicing A. refers to cleaning and preparing the data prior to analysis. B. refers to fixing data structures issues such as renaming columns. C. refers to aggregating or grouping data and then examining them from different viewpoints in many ways. D. All of the answer choices are correct. Ans: C, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Slicing and dicing refers to aggregating or grouping data and then examining them from different viewpoints in many ways.

20. You are examining user access logs of the accounting system for potential unauthorized access. Slicing and dicing could include A. calculating the total number of failed attempts; breaking totals down by each week; and grouping data by user location. B. fixing incorrect values; examining the completeness of the data; and calculating the number of user access attempts. C. examine the data for consistency; calculating the total number of failed attempts; and breaking the total down by each week. D. calculating the total number of failed attempts; breaking the total down by each week; and loading data into the analytical database. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Slicing and dicing refers to aggregating or grouping data and then examining them from different viewpoints in many ways.

21. Consider the following data table showing customer addresses. Customer ID 203211 203212 203213 203214 …

Address 245 Fleet St, Rockville 14 First St, Rockville 3403 Main St 3306 Second St, Buffalo …

Which statement describes the data table the best?

A. Address is a composite value column. B. Address is a multi-valued column. 269

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State MA Maryland NY NY …

C. State is a composite value column. D. The Address column has invalid data. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A composite column combines values for two or more characteristics.

22. Consider the following data table showing customer contact information: CustomerID 203211 203212 203213 203214 …

Contacts suppport@centralclean.com, gm@centralclean.com cust.support@NoblePlumbing.com

State MA Maryland NY NY …

help@TPIndustries.com, VP@TPIndustries.com …

Which statement describes the data table the best?

A. The Contacts column is a multi-valued column, since it contains multiple values of different characteristics. B. The Contacts column is a multi-valued column, since it contains multiple values of the same characteristics. C. The Contacts column is a single-valued column, since it contains values of the same characteristic. D. The Contacts column is a composite value column, since it contains multiple values of the same characteristic. Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: In a multi-valued column, a cell contains multiple values of the same characteristic. D is incorrect since a composite column combines values for two or more characteristics.

23. Consider the following data table showing customer address: CustomerID 203211 203212 203213 203214 …

Contacts suppport@centralclean.com, 633-549-6322 cust.support@NoblePlumbing.com, 246-549-6534 help@TPIndustries.com, 146-149-6522 …

State MA Maryland NY NY …

Which statement describes the data table the best?

A. The Contacts column is a multi-valued column, since it contains multiple values of the same characteristic. B. The Contacts column is a multi-valued column, since it contains multiple values of different characteristic. 270

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C. The Contacts column is a single-valued column, since it contains values of the same characteristic. D. The Contacts column is a composite value column, since it combines values for two or more characteristics. Ans: D, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: D is correct since a composite column combines values for two or more characteristics. For example, the email and the phone number have different characteristics. In a multi-valued column, a cell contains multiple values of the same characteristic.

24. When considering table structures for analytical purposes, A. using single-value columns will make it easier to perform analytical procedures. B. using single-value columns will make it more challenging to perform analytical procedures. C. using multi-value columns will make it easier to perform analytical procedures. D. using composite columns will make it easier to perform analytical procedures. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: For analytical purposes, each cell should contain one value describing one characteristic. That is, each column should be single-valued. Two or more values in the same cell makes analysis more challenging.

25. Thunderbird Hotels has multiple brands of hotels. Sales of each brand are totaled by the location that it operates in. Location Austin Dallas Chicago Atlanta …

Westgate $130,343 $1,230,000 $1,302,909 …

Broadway $430,030 $983,000 $1,222,392 $343,998 …

Proctor $349,000 $234,800

Peach Lanes $234,000 $203,000

$234,222 …

$498,000 …

What describes the data table the best?

A. The data table has a crosstabulation table structure since its column headers contain data that are useful for analysis purposes. B. The data table has a flat table structure since its column headers contain data that are useful for analysis purposes. C. The data table has a crosstabulation table structure since its column headers contain data that are not useful for analysis purposes. D. The data table has a flat table structure since its column headers contain data that are not useful for analysis purposes. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Crosstabulation table structures have column headers that contain data that are useful for analysis purposes. Flat tables have column headers that do not contain data values useful for analysis purposes. 271

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26. What is a limitation of using a crosstabulation table structure for analysis? A. Since column headers are examples of data values useful for data analysis, they cannot be used for filter or group-by operations. B. Since column headers are examples of data values useful for data analysis, mathematical operators cannot be applied to them. C. Crosstabulation table structures prevent table joins with other tables. D. None of the answer choices are correct. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Crosstabulation tables have limitations for analysis since column headers are examples of data values useful for data analysis. In crosstabulation tables, column headers cannot be used for filter or group-by operations.

27. Thunderbird Hotels has multiple brands of hotels. Sales of each brand are totaled by the location that it operates in. Location Austin Austin Austin Austin Dallas Dallas Dallas Dallas …

Brand

Sales Westgate Broadway Proctor Peach Lanes Westgate Broadway Proctor Peach Lanes

…

$130,343 $430,030 $349,000 $234,000 $1,230,000 $983,000 $234,800 $203,000 …

Describe the table structure.

A. The data table has a flat table structure since it has column headers that do not contain data values useful for analysis purposes. Filtering or grouping is more difficult using flat table structures. B. The data table has a crosstabulation table structure since it has column headers that do not contain data values useful for analysis purposes. Filtering or grouping is more difficult using crosstabulation table structures. C. The data table has a flat table structure since it has column headers that do not contain data values useful for analysis purposes. Filtering or grouping can be done more easily using flat table structures. D. The data table has a crosstabulation table structure since it has column headers containing data values useful for analysis purposes. Filtering or grouping can be done more easily using crosstabulation table structures. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Flat tables have column headers that do not contain data values useful for analysis purposes. Flat file structures can be used for filter and group-by operations. 272

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28. Star schema consists of which types of tables? A. Data tables and lookup tables. B. Fact tables and lookup tables. C. Fact tables and dimension tables. D. Data tables and dimension tables. Ans: C, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: a star schema consists of two types of tables, fact tables and dimension tables, and the relationships between them.

29. What is a characteristics of dimension table? A. The number of rows in a dimension table is usually small. B. They often have many columns. C. Dimensions provide context to analysis and give meaning to facts. D. All the answer choices are correct. Ans: D, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: All the answer choices are correct.

30. What is a characteristic of fact tables? A. Columns in fact tables are variables that can be combined in multiple ways to slice and dice the measures. B. The number of rows in a fact table is usually large. C. They often have many columns. D. The number of rows in a fact table is usually small. Ans: B, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A, C and D are characteristics of dimension tables.

31. You need to do data analysis for employee expenses reimbursements. Employees submit multiple expense reimbursements throughout the year. You are provided with the following tables.

Expenses ExpenseID DateSubmitted EmployeeID ExpenseTypeID Amount DatePaid DateApproved ApprovedByID

Employees EmployeeID FirstName LastName BirthDate PositionID DepartmentID SalaryScale DateHired 273

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Departments DepartmentID DepartmentName DepartmentMgr TotalBudget OfficeLocation

Which description is correct?

A. Expenses is a fact table, and Employees and Departments are dimension tables. B. Expenses is a fact table, and Employees and Departments are lookup tables. C. Expenses is a dimension table, and Employees and Departments are fact tables. D. Expenses and Employees are fact tables, and Departments is a dimension table. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Expenses is a fact table since the data corresponds to business transactions such as orders, sales, purchases, and payments. Employees and Departments are dimension tables since they provide context to analysis and give meaning to facts.

32. You need to do data analysis for employee expenses reimbursements. Employees submit multiple expense reimbursements throughout the year. You are provided with the following tables.

Expense ExpenseID DateSubmitted EmployeeID ExpenseTypeID Amount DatePaid DateApproved ApprovedByID

Employee EmployeeID FirstName LastName BirthDate PositionID DepartmentID SalaryScale DateHired

Department DepartmentID DepartmentName DepartmentMgr TotalBudget OfficeLocation

What are possible cardinalities between the tables?

A. There is a 1-N cardinality pattern from the Employee table to the Expense table. There is also a 1-N cardinality pattern from the Department table to the Expense table. B. There is a 1-N cardinality pattern from the Expense table to the Employee table. There is also a 1-N cardinality pattern from the Employee table to the Department table. C. There is a 1-N cardinality pattern from the Expense table to the Department table. There is also a 1-N cardinality pattern from the Employee table to the Department table. D. None of the answer choices are correct. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: The “1” denotes that for every row in Expenses (fact), there is just one corresponding value in the Employees table and just one corresponding value in the Department table. The “N” denotes that there can be many rows in Expense (facts) for each row in the Employee table and Department table.

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33. The recommended structure for analytical data models A. is the star schema since it will ensure that the data is complete and consistent. B. is the star schema since they are easy to understand by accountants and computers should be able to efficiently process them. C. is the snowflake schema since it will ensure they are easy to understand by accountants and computers should be able to efficiently process them. D. is the snowflake schema since it will ensure that the data is complete and consistent. Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Analytical data models should be easy to understand by business users such as accountants, and computers should be able to efficiently process them. The recommended structure for analytical data models is the star schema, which has both characteristics.

34. You need to do data analysis for employee expenses reimbursements. Employees submit multiple expense reimbursements throughout the year. You are provided with the following table. Employee Thomas Bouchard Richard Lee Sandra Williams Becky Sanders …

Category Computer Equipment Computer Equip Office Supplies Office Supplies …

Date 2023-09-03 10/15/2023 11/15/2023 12/5/2023 …

What are the data quality issues?

A. Category and Date have inconsistent data. B. Category and Date have incorrect data. C. Category has invalid data and Date has incorrect data. D. Category has incorrect data and Date has inconsistent data. Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Category and Date have inconsistent data since each columns have data with the same characteristic represented multiple ways.

35. After investigating the quality and structure of the data, you see that data quality is poor or restructuring the data structure is not economically feasible, what action should be taken? A. Redesign the source system. B. Do not move forward with the analysis. C. Take note the quality and structure issues and proceed with the analysis. D. Proceed with the analysis using data that is good quality and address the data structure issue at a later date.

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Ans: B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Do not move forward: If the data are unfit, such as the data having poor quality, then using the data for decision-making would be too risky. Similarly, if the data structure is poor, then restructuring and processing the data might be too complicated and economically unfeasible.

36. Within the ETL process, extracting data includes A. transferring source data to a platform where the data will be transformed. B. transforming source data to a platform where the data will be transferred. C. cleaning and restructuring data before the data is transferred to an analysis tool. D. transferring source data to a platform where analysis will be performed. Ans: A, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data extraction, which involves transferring data, is the first step in the ETL process. Source data is moved to the platform where they will be transformed.

37. Data connectors A. are intuitive software programs designed to transfer data within the transforming process. B. are intuitive software programs designed to join related tables. C. are intuitive software programs designed to transfer data within the extraction process. D. are intuitive software programs designed to clean data within the extraction process. Ans: C, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: ETL tools make it easy to extract data from databases, spreadsheets, text files, and many other data sources by providing data connectors that are intuitive software programs designed to extract data.

38. You are performing data analysis on accounts payable. You are now in the ETL process. Your transformation activities include A. grouping accounts payables by high-risk accounts. B. reformatting from date values that have not been correctly formatted. C. using data connectors to extract accounts payable data from the accounting system. D. transferring data from the data warehouse to Power BI. Ans: B, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data transformation improves the raw data for analysis through cleaning, restructuring, and integration.

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39. Imputation A. is a strategy for dealing with incomplete data in which estimated values are substituted for missing data. B. is a strategy for dealing with inconsistent data in which estimated values are substituted for inconsistent data. C. is a strategy for dealing with incorrect data in which estimated values are substituted for incorrect data. D. None of the answer choices are correct. Ans: A, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A specific strategy for dealing with incomplete data is imputation, which is when estimated values are substituted for missing data.

40. SolarRoofs is a manufacturer of solar roof panels. Sales have been increasing. You need to analyze sales for the current year so that sales projections can be made for next year. The data is currently being cleaned. What would be an example of imputation? A. Sales from the East region are missing so the East region is ignored in the analysis. B. Sales from the East region are missing so average sales from the previous year is used as a substitute for missing data. C. Sales from the East region are inconsistent, so more time is required to clean the data. D. Sales from the East region are incorrect, so the average sales from the previous year is used as a substitute for missing data. Ans: B, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A specific strategy for dealing with incomplete data is imputation, which is when estimated values are substituted for missing data.

41. Data wrangling or data munging A. refers to slicing and dicing data within the transformation process of ETL. B. refers to data restructuring within the transformation process of ETL. C. refers to data cleansing within the transformation process of ETL. D. refers to linking and combining tables within the loading process of ETL. Ans: B, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data restructuring, which is also known as data wrangling or data munging, does not change data values, but it does change how the data are organized.

42. Data integration can involve 277

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A. linking tables by using a union or merge. B. appending tables by defining a relationship between them or combining two or more tables to unite information about the same entity. C. merging tables by defining a relationship between them or combining two or more tables to unite information about the same entity. D. linking tables by defining a relationship between them or combining two or more tables to unite information about the same entity. Ans: D, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data integration is the process of connecting related data by linking or combining tables. Linking two tables defines a relationship between them. Combining two or more tables unites information about the same entity.

43. You have received sales data from the East and West regions in separate data tables. SalesID 34320 34321 34322 34323 …

EastRegion Product SalesDate Red Velvet 9/3/2024 Black Cherry 9/5/2024 Coconut Cream 9/5/2024 Red Velvet 9/6/2024 … …

Value $13,363 $4,030 $49,340 $34,340 …

SalesID 37320 37321 37322 37323 …

WestRegion Product SalesDate Red Velvet 9/3/2024 Black Cherry 9/9/2024 Coconut Cream 9/9/2024 Red Velvet 9/12/2024 … …

Value $23,553 $14,066 $9,540 $4,450 …

What are your options for integrating the data together?

A. The data tables can be linked by using the Product column as the foreign key. B. The data tables can be combined using a merge since both tables share the same data structure. C. The data tables can be combined using a union since both tables share the same data structure. D. The data tables can be linked using the Product column as the primary key. Ans: C, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A union combines different tables with the same data structure. The result is a table with more rows.

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44. You have received sales and shipping data in separate data tables. SalesID 34320 34321 34322 34323 …

ShipmentID 96330 96331 96332 96333 …

Product Red Velvet Black Cherry Coconut Cream Red Velvet …

SalesID 37320 37321 37322 37323 …

SalesData SalesDate

Value 9/3/2024 9/5/2024 9/5/2024 9/6/2024

… ShippingData ShipmentDate 9/13/2024 9/19/2024 9/19/2024 9/22/2024 …

$13,363 $4,030 $49,340 $34,340 …

FreightCharge $131 $140 $90 $144 …

What are your options for integrating the data together?

A. The data tables can be linked using the ShipmentID as the foreign key. B. The data tables can be combined using a merge even though the table structures are different. C. The data tables can be combined using a union and the result will be a table with more columns. D. The data tables cannot be merged since the table structures are different. Ans: B, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A merge combines data elements or columns from different tables. The result is a table with more columns.

45. What is an example of data matching? A. Reviewing the vendor master table to determine if “BTT Technologies Ltd” and “BTT Tech Limited” are referring to the same company. B. Reviewing the vendor master table to determine if “BTT Technologies Ltd” and “BTT Tech Limited” are competing companies. C. Populating missing address fields, the vendor master table using external business directories. D. Joining vendor master data with accounts payable data so that accounts payables by vendor can be analyzed. Ans: A, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data matching is a process that compares data and determines whether they describe the same entity.

46.A A data dictionary is 279

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A. a chart that indicates the column name, a brief description of content, the data type, whether the field is a primary or foreign key, and whether the field is mandatory or optional. B. a chart that indicates the column name, a brief description of content, the data type, and whether or not the field is a calculated column. C. a chart that indicates the column name, a brief description of content, whether the column is a measure or a dimension. D. a chart that indicates the column name, the source of the data, whether the column is a measure or a dimension. Ans: A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A data dictionary is built gradually throughout the data preparation process but creating column names and descriptions is a good starting point. The completed data dictionary should indicate the column name, a brief description of content, the data type, whether the field is a primary or foreign key, and whether the field is mandatory or optional.

47. What is a method to check for completeness when data is extracted or transferred? A. Compare the Excel worksheet’s row count with the row count in the ETL tool. B. Compare the Excel worksheet’s average of a value with the average in the ETL tool. C. Create a time-series chart to see if there are missing periods in the data. D. All of the answer choices are correct. Ans: A, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Comparing row counts is one way to check completeness. Test completeness by comparing the Excel worksheet’s row count with the corresponding table’s row count in the ETL tool.

48. What is a method to check for incorrect data when data is extracted or transferred? A. Compare control amounts. For example, compare the Excel worksheet’s row count with the row count in the ETL tool. B. Compare control accounts. For example, compare the Excel worksheet’s average of a value with the average the ETL tool. C. Apply calculations to data columns to determine errors that may exist due to invalid data. D. None of the answer choices are correct. Ans: B, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Incorrect data transfers can be detected using control amounts.

49. You are performing ETL on the vendor master table. The table has several data issues. The transformed table will be used to analyze spend by commodity and state. 280

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You are reviewing the data preparation pattern of irrelevant and unreliable data. Describe the data issue and how you would correct it. VendorID 20211 20212

Address 245 Fleet St, Rockville 14 First St, Rockville

State MA Maryland

20213

3403 Main St, Rochester

20214

3306 Second St, Buffalo

New York

20215 …

341 Liberty St, Springfield …

N/A …

Commodity Cleaning Supplies Office Equipment; Office Supplies Beverages; Kitchen Supplies Toys; Clothing; Household Goods Cleaning Equipment …

Telephone 240.243.2400

585-450-9910 2995229 241.233.4111 …

A. The Address column has an ambiguous name since it combines the street and address and city. Split the Column into Street and City. B. The Telephone column has data that is unreliable and is not relevant for the analysis. Correct the data that is unreliable and keep the column in the analytical database. C. The State column has data that is unreliable for the analysis. Remove the State column from the analytical database. D. The Telephone column has data that is unreliable and is not relevant for the analysis. Remove the Telephone column from the analytical database. Ans: D, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 3 is irrelevant and unreliable data. Data that are irrelevant for decisions bloat the data model. It is also important to avoid integrating unreliable data into the data model.

50. You are performing ETL on the vendor master table. The table has several data issues. You are reviewing the data preparation pattern for incorrect and ambiguous column names. Describe the issue and how you would correct it. ID 20211 20212

StreetAndCity 245 Fleet St, Rockville 14 First St, Rockville

Location MA Maryland

20213

3403 Main St, Rochester

20214

3306 Second St, Buffalo

New York

20215 …

341 Liberty St, Springfield …

N/A …

Commodity Cleaning Supplies Office Equipment; Office Supplies Beverages; Kitchen Supplies Toys; Clothing; Household Goods Cleaning Equipment …

Number 240.243.2400

585-450-9910 2995229 241.233.4111 …

A. The StreetAndCity column has an incorrect name since it combines the street address and city. Split the column into two columns. B. The Number column has an ambiguous name since the column can represent a variety of values. Rename the column to be Phone_Number. C. The Location column is ambiguous since it inaccurately describes the column. Rename “Location” to “State” so that the column can easily be distinguished from the other address fields. 281

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D. The Commodity column has an incorrect name since the column is a multi-valued column. The table should be transformed to a flat table structure. Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 4 is incorrect and ambiguous column names. Column names that are correct, intuitive, and unambiguous make it easier for other people to use a database and explore data. When renaming columns, eliminate spaces, underscores, or other symbols. For example, use CustomerName instead of Customer_Name.

51. You are performing ETL on the Purchase Order (PO) table. The table before the ETL process is shown below. VendorID 20211 20212 20213 20214 20213 …

PONumber 12316723 12316724 E1236125 12316726 ED123127 ..

POValue $1,234.34 $1,444.44 $3,234.22 $12,232.77 $11,230.98 …

PODate 3/13/2023 3/14/2023 3/17/2023 3/18/2023 3/18/2023 …

ShipDate 13/4/2023 2023-03-15 March 19, 2013 2023-04-19 3/25/2023 …

Power Query has automatically assigned a data type to each column during the extraction. The data types are showing below. Column Name VendorID PONumber POValue PODate ShipDate

Data Type Text Text Fixed Decimal Number Date Text

You are reviewing the data preparation pattern for incorrect data types. Describe the issue and how you would correct it. A. The ShipDate has a data type of Text, but it should be Date. Since it is a Text field it can’t be used to calculate order cycle times. Change the ShipDate data type to Date. Review and fix the cells are marked as errors. B. The VendorID has a data type of Text, but it should be a Whole Number. Since it is a Text field, it can’t be used to calculate the number of vendors in the system. Change the VendorID data type to Whole Number. C. The ShipDate has data type of Text, but it should be Integer. Since it is a Text field, it can’t be used to calculate order cycle times. Change the ShipDate data type to Integer. Review and fix the cells that are marked as errors. D. The POValue has a data type of Fixed Decimal Number, but it should be a Decimal Number. Since it is a Fixed Decimal Number, there is less accuracy since the date is being rounded. Change the POValue data type to Decimal Number.

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Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 5 is incorrect data types. An incorrect data type limits what can be done with the data in a column. Calculations between PODate and ShipDate cannot be done if ShipDate is a text field.

52. You are performing ETL on the vendor master table. The table has several data issues. You are reviewing the data preparation pattern for composite and multi-valued columns. Describe the issue and how you would correct it. ID 20211 20212

Address 245 Fleet St, Rockville 14 First St, Rockville

Location MA Maryland

20213

3403 Main St, Rochester

20214

3306 Second St, Buffalo

New York

20215 …

341 Liberty Ave, Springfield …

N/A …

Commodity Cleaning Supplies Office Equipment; Office Supplies Beverages; Kitchen Supplies Toys; Clothing; Household Goods Cleaning Equipment …

Number 240.243.2400

585-450-9910 2995229 241.233.4111 …

A. The Address column is a composite column which will make it difficult to analyze the vendors by city. The column should be split using “,” as the delimiter. B. The Address column is a multi-valued column which will make it difficult to analyze the vendors by city. The column should be split using “St,” as the delimiter. C. The Commodity column is a composite column which will make it difficult to analyze the vendors by city. The column should be split using “,” as the delimiter. D. The Address column is a multi-valued column which will make it difficult to analyze the vendors by city. The column should be split using “;” as the delimiter. Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 6 is composite and multi-valued columns. Columns that are not single-valued make analytics difficult. Split combined columns. Create a separate table for multi-valued columns.

53. You are performing ETL on the vendor master table. The table has several data issues. You are reviewing the data preparation pattern for incorrect values. Describe the issue and how you would correct it. SalesID 20211 20212 20213 20214 20215 …

Product Strawberry Vanilla Bean Coconut Pineapple Vanilla Bean Coconut Pineapple …

UnitPrice

Quantity

5.39 54.30 6.20 5.40 6.34 …

40 50 66 40 75 …

A. The UnitPrice column has an incorrect value of 54.30. This can be detected by ordering UnitPrice in descending order to see the outlier value. The error could be corrected in the data source or in the analytical database. 283

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B. The UnitPrice column has an incorrect value of 54.30. This can be detected by averaging UnitPrice to see if the value is reasonable. The error should only be corrected in the analytical database. C. The UnitPrice column has an incorrect value of 54.30. This can be detected by ordering UnitPrice in descending order to see the outlier value. The error should only be corrected in the analytical database. D. None of the answer choices are correct. Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 7 is incorrect values. Incorrect data is difficult to identify within the content of a single column, so it is helpful to look for outliers. Incorrect values can be corrected in the source data or in the analytical database.

54. You are performing ETL on the IT support tickets. The table has several data issues. You are reviewing the data preparation pattern for inconsistent values. Describe the issue and how you would correct it? IssueID 20211 20212 20213 20214 20215 20216 20217 …

Employee James Peter, Accounting Lee Wong, Facilities Sandra Ng, Accounting Sally Singh, IT Kevin Brock, IT Harold Young, Facilities Pamela McCain, Accounting …

Severity null Medium High Low N/A L …

Category Email Network System Access System Access, Network Software Email, Network Network …

A. The Severity column has inconsistent values since there are two or more different representations which will result in poor decision-making. Values with low frequencies would indicate inconsistent data. The inconsistent data should be modified. B. The Severity column has inconsistent values since there are two or more different representations which will result in poor decision-making. Values with high frequencies would indicate inconsistent data. The inconsistent data should be removed from the analytical database. C. The Employee column has inconsistent values since it combines two or more different representations which will result in poor decision-making. Values with low frequencies would indicate inconsistent data. The inconsistent data should be modified. D. The Severity column has inconsistent values since there are two or more different representations which will result in poor decision-making. Values with high frequencies would indicate inconsistent data. The inconsistent data should be removed from the analytical database. Ans: A, LO: 4, Bloom: S, Difficulty: Hard, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 8 is inconsistent values. Data 284

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inconsistency occurs when two or more different representations of the same value are mixed in the same column. Values with a low frequency could indicate inconsistent data.

55. You are performing ETL on IT support ticketing information. The table has several data issues. You are reviewing the data preparation pattern for incomplete values. Describe the issue and how you would correct it. IssueID 20211 20212 20213 20214 20215 20216 20217 …

Employee James Peter, Accounting Lee Wong, Facilities Sandra Ng, Accounting Sally Singh, IT Kevin Brock, IT Harold Young, Facilities Pamela McCain, Accounting …

Severity null Medium High Low N/A L …

Category Email Network System Access System Access, Network Software Email, Network Network …

A. The Severity column has incomplete values since there are null and blank values which might make data unusable and unreliable. It needs to be determined whether null values are allowed. If a null value is not allowed, remove the column or replace the null value with a valid value. B. The Severity column has incomplete values since there are null and blank values which might make data unusable and unreliable. The column with null values should be removed from the analytical database. C. The Severity column has incomplete values since there are null and blank values which might make data unusable and unreliable. The rows with null values should be removed from the analytical database. D. The Severity column has incomplete values since there are null and blank values which might make data unusable and unreliable. It needs to be determined whether null values are allowed. If a null value is allowed, remove the row, or replace the null value with a valid value. Ans: A, LO: 4, Bloom: S, Difficulty: Hard, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 9 is incomplete values. This pattern addresses incompleteness that might make data unusable and unreliable. Incompleteness might make data unusable and unreliable and result in poor decision-making. For each column, decide whether null values are allowed. If null values are not allowed, remove the column, or replace the null values.

56. You are performing ETL on the Employee table. You are reviewing the data preparation pattern for invalid values. The company has been in business for the last 30 years. You need to validate the data in the Tenure column. EmployeeID 20211 20212 20213 20214

FirstName James Lee Sandra Sally

LastName Peter Wong Ng Singh 285

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Tenure 30 Ten 6 3

20215 20216 …

Kevin Harold …

Brock Young …

23 15 …

Which approach should be used to validate the data? A. Create and apply validation rules. For example, TenureValid = If Tenure >= 0 and Tenure <31, then “Yes”, else “No”. B. Create and apply validation rules. For example, TenureValid = If Tenure >= 0, then “Yes”, else “No”. C. Create and apply validation rules. For example, TenureValid = If IsNumeric(Tenure)=True, then “Yes”, else “No”. D. Scan the values within the Tenure value and correct any invalid values. Ans: A, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 10 is for invalid values. Data that do not meet these expectations are considered invalid. In most cases the validation rule must be implemented with a scripting language.

57. You are performing ETL and looking for non-intuitive and ambiguous table names. You review the data dictionary that lists tables in the analytical database. Table Name CInfo InvoiceData EmployeeInfo Time

Description Tax client address information Invoices sent to clients General information on employee at the tax firm Time tracking of billable hours

What suggestions should be made to the table names?

A. “Time” should be renamed to be “TimeTracker” so that the table is more descriptive. All other table names are appropriate. B. “Time” should be renamed to be “TimeTracker”. “CInfo” should be renamed to be “ClientInfo”. C. “Time” should be renamed to be “Time_Tracker”. “CInfo” should be renamed to be “Client_Info”. D. “Time” should be renamed to be “Time Tracker”. “CInfo” should be renamed to be “Client Info”. Ans: B, LO: 5, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Examining a table’s content and its data dictionary definition can help determine whether the name accurately reflects its content. The rules for naming tables are the same as those for naming columns. They should be intuitive, avoid spaces, underscores, and special coding.

58. The following table showing employee information doesn’t have a primary key defined. What should be the primary key? 286

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FirstName James Lee Sandra Sally Kevin Harold Pamela …

LastName Peter Wong Ng Singh Brock Young McCain …

Department Accounting Facilities Accounting IT IT Facilities Accounting …

Birthday 9/2/1986 7/4/2000 6/20/1985 12/6/2001 11/22/1988 8/20/1977 9/30/1980 …

A. LastName should be the primary key since it has unique values. B. The combination of FirstName and LastName should be the primary key since it has unique values. C. An artificial primary key should be created to ensure that the key has unique fields D. All of the answer choices are correct. Ans: C, LO: 5, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: To be a primary key, a column must have a unique value for each instance and no null values. We could combine the first and last names into the same field, but names generally should not be used as primary keys because they are rarely unique. For scenarios like this, create an artificial key, such as a number.

59. You are performing ETL on the Purchase Order (PO) table. You are reviewing the data preparation pattern for invalid values. VendorID 20211 20212 20213 20214 20213 …

PONumber 12316723 12316724 E1236125 12316726 ED123127 …

POValue $1,234.34 $1,444.44 $3,234.22 $12,232.77 $11,230.98 …

PODate 3/13/2023 3/14/2023 3/17/2023 3/18/2023 3/18/2023 …

ShipDate 3/17/2023 3/22/2023 3/24/2023 3/15/2023 3/18/2023 …

Which of the following approach should be used to valid the data? A. Create and apply intra-table validation rules. For example, ShipDateValid = If ShipDate <= PODate then, then “Yes”, else “No”. B. Create and apply intra-table validation rules. For example, ShipDateValid = If ShipDate >= PODate then, then “Yes”, else “No”. C. Sort ShipDate by descending order, visually scan column for invalid data. D. Create and apply inter-table validation rules. For example, ShipDateValid = If ShipDate >= PODate then, then “Yes”, else “No”. Ans: B, LO: 5, Bloom: S, Difficulty: Hard, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data Preparation Pattern 14 determines the validity of a column’s values based on the values in one or more other columns in the same table. Data

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that do not meet these expectations are considered invalid. In most cases the intra-table validation rule must be implemented with a scripting language.

60. Dimensional modeling A. involves creating data models with fact tables surrounded by dimension tables so that the model is easy to understand and result in efficient data processing. B. involves creating data models with dimension tables surrounded by fact tables so that models are easy to understand and result in efficient data processing. C. is the process of splitting composite columns to single-value columns so that models are easy to understand and result in efficient data processing. D. is the process of transforming crosstabulation table structures to flat table structures so that models are easy to understand and results in efficient data processing. Ans: A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Dimensional modeling is the technique of creating data models with fact tables surrounded by dimension tables. These data models, such as star schemas, are easy to understand and result in efficient data processing.

61. You are provided with the following data model. The Expense table is a fact table, and the Employee and Training table are dimension tables.

Expense ExpenseID Date_Submitted EmployeeID ExpenseTypeID Amount Date_Paid ApprovedByID

1 n

Employee EmployeeID First_Name Last_Name Birth_Date PositionID DepartmentID

n 1

Training EmployeeID CourseName CompletedDate

Describe the data model. A. The data model is showing a snowflake model since the information about the Employee is spread across multiple tables. B. The data model is showing a snowflake model since the fact table is only linked to one dimension table. C. The data model is showing a star model since the information about the Employee is spread across multiple tables. D. The data model is showing a star model since the Employee table can be joined with the Training and Expense table.

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Ans: A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: In a snowflake schema, the information for a dimension is spread across multiple tables.

62. You are an internal auditor, and you want to validate that all invoices have a corresponding purchase order. The invoice table and purchase order table has been provided to you. As a data validation rule, all purchase orders that are referenced in the invoice table should exist in the purchase order table. This validation rule is called A. referential integrity. B. data completeness. C. data integrity. D. referential completeness. Ans: A, LO: 6, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An example of a widely used inter-table validation rule is referential integrity, which refers to the fact that all values in a foreign key should also exist as values in the corresponding primary key.

63.AA sample code for a validation rule has been provided. The rule is to ensure that purchase orders over $5,000 are approved by a manager or director. The sample code is APPROVALVALID = IF PODATA.POVALUE > “5000” AND EMPLOYEE.JOBTITLE IN {“MANAGER”, “DIRECTOR”} THEN “YES” ELSE “NO”

This validation rule is called A. Referential integrity. B. Intra-table validation. C. Inter-table validation. D. Multi-table validation. Ans: C, LO: 6, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Inter-table validation determines the validity of a column’s values based on the values in one or more other tables.

64. You are provided with the following data model. The Expense table is a fact table, and the Employee and Training tables are Dimension tables. Expense.ExpenseID and Employee. EmployeeID are primary keys. 289

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Expense ExpenseID Date_Submitted EmployeeID ExpenseTypeID Amount Date_Paid ApprovedByID

Employee EmployeeID First_Name Last_Name Birth_Date PositionID DepartmentID

Training EmployeeID CourseName CompletedDate

What data relationship should be created for the model? A. There should be a many-to-one relationship from Expense.EmployeeID to Employee.EmployeeID and a one-to-many relationship from Employee.EmployeeID to Training.EmployeeID. B. There should be a one-to-many relationship from Expense.EmployeeID to Employee.EmployeeID and a one-to-many relationship from Employee.EmployeeID to Training.EmployeeID. C. There should be a one-to-many relationship from Expense.EmployeeID to Employee.EmployeeID and a many-to-many relationship from Employee.EmployeeID to Training.EmployeeID. D. There should be a one-to-many relationship from Expense.EmployeeID to Employee.EmployeeID and a many-to-one relationship from Employee.EmployeeID to Training.EmployeeID. Ans: A, LO: 7, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: The data preparation pattern 20 is missing or incorrect data relationships. There should be many-to-one relationship from Expense.ExmployeeID to Employee.EmployeeID since there can be multiple expense reports for each employee. There is a one-to-many relationship from Employee.EmployeeID to Training.EmployeeID since there can be multiple training records for each employee.

65.AA sample code for a validation rule has been provided. The rule is to ensure that receipts exist for employee expenses that are greater than $500. The sample code is APPROVALVALID = IF EXPENSE.VALUE > “500” AND EXPENSE.RECEIPTEXIST = TRUE THEN “YES” ELSE “NO”

This validation rule is called 290

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A. Referential integrity. B. Intra-table validation. C. Inter-table validation. D. Multi-table validation. Ans: B, LO: 6, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Pattern 14 is intra-table validation determines the validity of a column’s values based on the values in one or more other columns in the same table.

66. When defining table relationships, A. cardinality is a constraint that defines how many times an instance of an entity can participate in a relationship. B. cardinality can take on three possible values: 0, 1 or N. C. N means that the instance has limited participation in the relationship. D. a star schema can have a 1-1 relationship. Ans: A, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A cardinality is a constraint that defines how many times an instance of an entity can participate in a relationship. It can take two possible values, N or 1. N means that an instance can participate many times in the relationship. All relationships in a star schema have a one-to-many (1-N) cardinality pattern.

67. You are loading bank transactions into the analytical database. How would you ensure that correct data is being loaded? A. Compare the record count between the source data and the transferred data. B. Compare the number of distinct records between the source data and the transferred data. C. Compare sum of debits and credits with the source data and the transferred data. D. Review ETL logs to see if any data failed to load. Ans: C, LO: 7, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An effective way to validate the correct transfer of data is by comparing sums, averages, or any other control amounts.

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Multiple Select 68. What factors should you be aware of when preparing data for analysis? A. The quality of the data will affect the quality of the insights and the decisions based on them. B. The structure of the data will determine how effectively they can be analyzed. C. The stakeholders in the data analysis will affect how the data is prepared. D. The analysis tools used will determine how effectively they can be analyzed. Ans: A|B, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: There are two key factors to be aware of when preparing data for analysis: 1. The quality of the data will affect the quality of the insights and the decisions based on them. In other words, bad data leads to bad decisions. 2. The structure of the data will determine how effectively they can be analyzed.

69. Customer data is being collected. The salaries are being collected for each customer in US dollars. Which of the following is an example of data being valid but not correct? A. A Canadian customer enters their salary in Canadian dollars, but the value should be in US dollars. B. A Canadian customer enters their salary in US dollars, but the value entered is incorrect. C. A US customer enters their salary in Canadian dollars, but the value should be in US dollars. D. A Canadian customer enters their salary in US dollars, and the value is correct. Ans: A|B|C, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: An incorrect value means the wrong value is assigned, and an invalid value means an unacceptable value is assigned. A, B, and C have valid data, but the values are incorrect. 70. You need to analyze data for potential fraud sales transactions. The fraud potential has been classified but they have inconsistent values. SalesID 15089 15090 15091 15092 15093 …

CustomerName Brock Packaging Ltd. Grand River Lumber Corp Grand River Lumber Corp Stoney Creek Plumbing Stoney Creek Plumbing …

SalesValue $13,430.34 $3,343.11 $23,430.23 $2,484.43 $1,491.99 …

FraudPotential H High HI Low L …

How can you identify the inconsistencies in the FraudPotential field? A. Create a list with all distinct FraudPotential values, then sort and review. The inconsistent values will likely be noticeable immediately. 292

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B. Order the data by sales value. Records with high sales values should be categorized as High. C. Total sales value by each FraudPotential value. Low Sales value total will indicate inconsistent data. D. Build a frequency table that shows how many times each FraudPotential value occurs. Values with a low frequency might indicate inconsistent data. Ans: A|D, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Two profiling techniques to identify inconsistencies include: a) Create a list with all distinct values, then sort and review. The inconsistent values of High, HI, and H will likely be noticeable immediately. b) Build a frequency table, or a table that counts how many times a value occurs. Values with a low frequency might indicate inconsistent data. 71. What are the characteristics of fact tables? A. The columns in fact tables are mostly quantitative. B. Columns in fact tables are variables that can be combined in multiple ways to slice and dice the measures. C. Data in a fact table is captured at a high granularity level. D. The number of rows in a dimension table is usually small. Ans: A|C, LO: 1, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: B and D are incorrect since they are characteristics of dimension tables.

72. You are assessing the data quality of supplier addresses from the customer database. What conclusions can you make on the data quality? EmployeeID 203211 203212 203213 203214 …

StreetAddress 245 Fleet St 14 First St 3306 Second St …

Location1 Rockville Rockville Rochester Buffalo …

Location2 MA Maryland NY New York …

Telephone 240.243.2400 240.243.5110 585-450-9910 7162995229 …

A. The Telephone values are not consistent. B. The Location2 values are not consistent. C. The Location1 and Location2 columns have ambiguous descriptions. D. The StreetAddress value is not complete. Ans: A|B|D, LO: 1, Bloom: S, Difficulty: Hard, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: C is data structure issue not a data quality issue. 73. You are performing data analysis on accounts payable. You are now in the ETL process. Your transformation activities include 293

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A. integrating accounts payables data with the customer table. B. cleaning date values that have not been correctly formatted. C. using data connectors to extract accounts payable data from the accounting system. D. transferring the transformed data to Tableau for analysis. Ans: A|B, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data transformation improves the raw data for analysis through cleaning, restructuring, and integration. C is extraction and D is loading.

74. Data restructuring A. involves changing data values. B. changes how the data is organized. C. is also referred to as data wrangling. D. includes transposing and unpivoting tables. Ans: B|C|D, LO: 2, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: Data restructuring, which is also known as data wrangling or data munging, does not change data values, but it does change how the data are organized. ETL tools provide a variety of techniques to make restructuring easier: transposing and unpivoting tables.

75. What are the benefits for creating a data dictionary? A. It makes it easier for staff accountants to understand the data and see what data is available for analysis. B. It provides information on the quality of the data for the analysis. C. It indicates which fields are primary or foreign keys. D. It indicates whether a field is mandatory or optional. Ans: A|C|D, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: It provides information on the quality of the data for the analysis. A data dictionary records different pieces of information for each field, including a name, a brief description of content, the data type, whether the field is a primary or foreign key, and whether the field is mandatory or optional.

76. What are characteristics that should identify if a column could be a primary key in a table? A. The column should not have empty values. B. The count of rows, the count of distinct values, and the count of unique values should be the same. C. The unique values should only appear once in the column. D. The column should have a data type of Text. 294

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Ans: A|B|C, LO: 5, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: For a column to be a primary key, the ETL tool should show that the values for Count, Distinct, and Unique should be the same. The value for Empty should be zero. A unique value is a value that occurs only once in the column.

77. What are aspects of a data relationship that can be defined? A. The data types for each data relationship field. B. The data fields between which the relationship is specified. C. The cardinalities that apply to the relationship. D. The navigation direction used to aggregate data. Ans: B|C|D, LO: 7, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: The aspects of a relationship that can be defined include: the data fields between which the relationship is specified; the cardinalities that apply to the relationship; and the navigation direction used to aggregate data.

78. You are a tax accountant, and you are reviewing client data so that data can be loaded into the tax preparation software. You noticed that there is one column that combines the client’s first and last name. What would be your most appropriate response? A. Manually split the column into two columns. B. Examine the values in the name column to see how the first and last names are delimited. C. Use ETL tools to split the name into two columns using the delimiter. D. Transfer the table into a flat file structure since it is a multi-valued column. Ans: B|C, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA: FC: Measurement, Analysis, and Interpretation, Solution: A is not correct since ETL tools are an automated method for splitting the columns. D is not correct since the column is a composite column and not a multi-valued column.

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Short Answer 79. What is the difference between a multi-valued column and a composite column? Provide an accounting example for each type of column Answer: In a multi-valued column, a cell contains multiple values of the same characteristic. A composite column combines values for two or more characteristics. Example of a multi-valued column is SalesRegions. CarProduct Roadster Cruiser Voyager Touring …

SalesRegions Asia, North America North America, South America Africa, Asia Europe …

Example of a composite column is ChartofAccounts. ChartOfAccounts 1101, Cash 1201, Accounts Receivable 2101, Account Payable 2202, Tax Payable …

AccountType Assets Assets Liabilities Liabilities …

LO: 1, Bloom: AP, Difficulty: Medium, Min: 7, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

80. Explain the differences between a snowflake schema and star schema. Answer Star schema consists of two types of tables, fact tables and dimension tables, and the relationships between them. In a snowflake schema, the information for a dimension is spread across multiple tables. Star schema has fact tables related to dimension tables, whereas snowflake schemas can have dimension tables related to other dimension tables. LO: 1, Bloom: K, Difficulty: Easy, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

81. Explain what is meant to slice and dice data. You have received a data table showing employee credit card transactions. How can the data be sliced and diced? Answer 296

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Slicing and dicing is analyzing data and examining them from different viewpoints in many ways. The analysis includes aggregating or grouping data. Credit card data can be aggregated to calculate the total credit card charges and it can be totaled by employee, merchant, or merchant category. LO: 1, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

82. What is the difference between flat table structures and crosstabulation tables? Explain why flat table structures are preferred compared to crosstabulation tables for data analysis. Answer Flat tables have column headers that do not contain data values useful for analysis purposes. A crosstabulation table represents a relationship between the two variables, and column headers are examples of data values. Crosstabulation tables have limitations for analysis since column headers are examples of data values useful for data analysis so the column headers cannot be used for filter or group-by operations. LO: 1, Bloom: K, Difficulty: Easy, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

83. Your company currently pays vendors by check. To modernize the payment process, electronic funds transfers are being implemented. You need to analyze the vendor master data to see if there are data quality issues. Identify three quality issues with the data. VendorID 203211 203212 203213 203214 203215 …

Address 245 Fleet St, Palm Springs 14 First St, Rockville 3403 Main St, Rochester 3306 Second St, Reno 341 Liberty St, Henderson …

State CA Cali California NV Nevada …

Telephone 242.243.2990 241.243.5122

241.239.4221 …

Answer 1. Address field is a composite column. The street and city should be separate columns. 2. State has inconsistent values. “CA”, “Cali” and “California” all represent the same state. 3. The telephone column has incomplete data since it has missing values.

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LO: 4, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management 84. How does irrelevant data in the analytic database impact data analytics? How can irrelevant data be detected and corrected? Answer Irrelevant data bloat a data set. Unreliable data increases the risk of making bad decisions. Irrelevant data can be detected by visually scanning columns for irrelevant and unreliable data. The problem can be corrected by removing columns with irrelevant or unreliable data.

LO: 4, Bloom: K, Difficulty: Easy, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management 85. You are reviewing tax rates that have been set up in the accounting information system. The tax table has been extracted. The column names and column descriptions are shown below. What rules are being violated among the column names and how should it be corrected? Table Name TC TRate% Text

Description Internal system tax code. For example, E4. Tax Rate as a percentage. E.g., 8.3% Description of tax. E.g., State Tax

Answer

1. “TC” is an abbreviation that is not understood by everyone. It should be renamed to be “TaxCode”. 2. “TRate%” has a symbol. It should be renamed to be “TaxRate”. 3. “Text” is not describing the column’s content and is not intuitive to business people. It should be renamed to be “TaxDescription”. LO: 4, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management 86. What is the purpose of creating validation rules? Explain the differences between intra-table rules and inter-table rules. Answer The purpose of validation rules is to identify invalid data. These rules define what values are and are not acceptable. An intra-table rule validates column’s values based on the values in one or more other columns in the same table. An inter-table rule validates a column’s values based on the values in one or more other columns in one or more other tables.

LO: 5, Bloom: K, Difficulty: Easy, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

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87. What is data profiling and why is it important in data analysis? Answer Data profiling is the process of investigating data quality and structure. It has three parts:

• • •

Investigating data quality Investigating data structure Deciding and informing

It is important in data analysis since it helps discover, understand, and organize the data. Data profiling detects data quality issues, detects data structural issues, reveals relationships between tables, and assesses whether data analysis can be performed.

LO: 1, Bloom: K, Difficulty: Easy, Min: 5, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

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Brief Exercises 88. You are an internal auditor at Bridgeport College. At the college, faculty and staff are provided credit cards (p-cards) for business purchases. You have been asked to analyze p-card transactions to ensure that purchases are in compliance with the college’s purchasing policy. The Faculty and Staff tables have been extracted from the HRIS system, and the PCard table has been provided by the credit card company. To conduct your analysis, you need to perform ETL to integrate the Faculty, Staff and PCard tables together. The sample extract of the tables is provided below. Faculty EmployeeID 34341 34342 34343 34344 …

EmployeeName Dr. Samuel Chang Lilly Norton Bolton, Larry Dr. William Lee …

EmployeeID 34341 34342 34343 34345 …

EmployeeName Scott Ng Miller, Sandra Williams, Brian Walter Lai …

Department Mathematics Accounting, Finance Information Systems Accounting, Economics …

Staff

Name Samuel Chang Lilly Norton Larry Bolton William Lee Scott Ng Sandra Miller Walter Lai …

Department Facilities Procurement Advancement Facilities …

PCard PurchasingLimit $1,000

CurrentBalance $123.34 $5,034.34 $434.55

$5,000 $5,000 $1,000 $2,500 $5,000 …

$1200.11 $122.00 …

1. Define what data matching means? 2. Identify three data matching challenges when attempting to integrate data. 3. Discuss which tables can be combined using a union, and which tables can be combined using a merge. Answer

1. Data matching is a process that compares data and determines whether they describe the same entity. 2. Challenges: 300

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i. “Dr. Samuel Chang” from the Faculty table and “Samuel Chang” from the PCardData table are likely the same entity so one of the values should be updated so that the data matches. ii. “Bolton, Larry” from the Faculty table and “Larry Bolton” from the PCardData table are likely the same entity so one of the values should be updated so that the data matches. iii. “Miller, Sandra” from the Faculty table and “Sandra Miller” from the PCardData table are likely the same entity so that the data matches. 3. The Faculty and Staff table can be combined using a union since they have the same data structure. The result will be a table with more rows. The Faculty and PCard table can be combined using a merge, and the result will be a table with more columns. LO: 6, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

89. You are a managerial accountant for Prairie Cakes. You are analyzing contribution margin (CM) for all products that the bakery produces. There are some data issues with the data table. The data needs to be validated prior to loading it into the analytical database for further analysis. Product Carrot Cake Caramel Chocolate NY Cheesecake Black Forest …

Sales $34,034 $33,034 $93,434 $43,200 …

VariableCost $12,002 $14,333 $24,033 $19,343 …

CM $22,032 $38,701 $69,401 $23,857 …

UnitsSold 1,100 900 3,200 1,000 …

CMPerUnit $20.03 $20.78 $21.69 $23.86 …

1. What type of validation rule can be used to validate CM values and CMPerUnit values. Explain why. 2. Provide the sample code that will validate CM values and CMPerUnit values. Answer 1. This would use an intra-table validation since it determines the validity of a column’s values based on the values in one or more other columns in the same table.

2. Validation rules sample code: CMVALID = IF CM = SALES - VARIABLECOST THEN THEN “OK” ELSE “ISSUE”

CMPERUNITVALID = 301

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IF CMPERUNIT = CM / UNITSSOLD THEN “OK” ELSE “ISSUE”

LO: 4, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

90. You are a financial accountant at Blue Water Hospital. You are asked to analyze the financial performance of the hospital by comparing budget and actual values. You have extracted data tables from the accounting information system and integrated the data tables. Your next step is to create a data dictionary for the new table that can be used for the analysis. 1. What is the purpose of creating a data dictionary? 2. Prepare the data dictionary for the new table. The data dictionary should include the following information: name, description, data type, key, and mandatory. Answer

1. The purpose of a data dictionary is to provide detailed information about data that is available and where they can be found. 2. Data dictionary: Name AcctID Account Budget

Description The account’s unique ID. Description of the account. Budgeted value.

Actual

Actual value.

VarDollar

Dollar variance between actual and budgeted Percentage variance between actual and budgeted. …

VarPercent

…

Data Type Integer Text Fixed Decimal Number Fixed Decimal Number Fixed Decimal Number Percentage

Key Primary

Mandatory Yes Yes Yes Yes Yes

Yes …

…

LO: 3, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

91. Better Meats is a manufacturer of plant-based meat substitutes. You are a managerial accountant for the company, and you are looking to analyze sales data. You are performing ETL on the data. Data is extracted from the accounting information system and will be loaded into the analytic database. List the two data preparation patterns for extracting sales data and explain how you are applying each. 302

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SalesID 1110 1112 1114 1116 …

Customer Pitaway PizzaCity ShakeShop WhopperVille …

Amount $34,230.34 $23,320.30 $34,540.88 $4,277.54 …

SalesTax $1,711.52 $1,166.02 $1,727.04 $213.88 …

SalesDate 8/23/2023 8/28/2023 8/28/2023 8/30/2023 …

ShipDate 8/23/2023 8/30/2023 9/13/2023 8/23/2023 …

Answer Data Preparation Pattern 1: Incomplete Data Transfer Comparing row counts is one way to check completeness. The Excel worksheet’s row count can be compared with the corresponding table’s row count in the ETL tool. Data Preparation Pattern 2: Incorrect Data Transfer The data might not have been transferred correctly. This issue can be detected using control amounts. The Excel worksheet’s total indicator for the Amount column can be compared with the total of the Amount column in the ETL tool. LO: 3, Bloom: AP, Difficulty: Medium, Min: 7, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

92. Sleep Easy Hotel is a boutique hotel, and they are committed to community development. They want to initiate a “buy local” strategy to support the local businesses. You are a managerial accountant, and you need to analyze their existing vendors to determine if they are local businesses. You are performing ETL on vendor data. For each data preparation pattern, discuss the data problem, discuss how the data issue can be detected, and discuss how to correct the following problems: • irrelevant data • inconsistent values • incomplete values VendorID 81110 81112 81114 81116

Customer Better Bags Coffee Stop Office Plus Green Plus

…

Street null 342 First St. 234 Main Street 99 Broadway Ave …

City Dallas Fort Worth Austin Atlanta …

State Texas TX Tx GA …

ZIP 75225 C76164 3038 …

CreditRisk H Low M High …

Answer Irrelevant Data Data that are irrelevant for decisions bloat the data model. By scanning the columns, you can see that the CreditRisk column is irrelevant for the data analysis. The CreditRisk column should be removed from the analysis database. Inconsistent Values 303

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Inconsistent values occur when two or more different representations of the same value are mixed in the same column. By visually scanning the values in the State column, you can see that there are different values representing the state of Texas. ETL tools can identify the frequency of distinct values. Based on the sample data, since most other values in State are two characters, “Texas” should be changed to “TX”. Incomplete Values Incompleteness might make data unusable and unreliable and result in poor decision-making. The Street column has values that are missing. Performing a data sort can identify null values or ETL tools can also identify them. To fix incomplete values, remove the column or replace the value with the missing address information. LO: 3, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

93. You are an internal auditor for City Electronics. The company has a 30-day sales return policy. The restocking fee is 10% of the sale price and any returns beyond 30 days will require a manager’s override. You extract the data from the accounting information system, and you need to validate the data quality prior to loading it into the analytical database. SalesID 111023 111225 111465 111645 …

SalesAmt $230.34 $320.30 $540.88 $1,277.54 …

RestockFee $230.34 $32.03 null $127.75 …

SalesDate 8/23/2023 8/28/2023 8/28/2023 8/30/2023 …

ReturnDate 8/23/2023 7/30/2023 10/13/2023 11/23/2023 …

MgrOverride Kevin Williams Stacy Chow

Provide the sample code for validating ReturnDate, RestockFee, and MgrOverride. Answer RETURNDATEVALID = IF RETURNDATE >= SALESDATE THEN THEN “OK” ELSE “ISSUE”

RESTOCKFEEVALID = IF RESTOCKFEE = SALESAMOUNT X 0.1 THEN “OK” ELSE “ISSUE”

MGROVERRIDEVALID = 304

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null null …

IF (RETURNDATE – SALESDATE) > 30 AND MGROVERRIDE IS NOT NULL THEN “OK” ELSE “ISSUE”

LO: 4, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

94. You are an external auditor for a public technology company. In the past, sales revenues have been overstated. For this audit engagement, you are required to pay closer attention to testing the evidence of sales revenues. You have extracted the Sales, Customer, and Product tables from the accounting information system. The column names and column descriptions of each table are provided below. Column ID SalesAmt SalesDate Customer Product

Sales Description Unique ID of sales transaction. The sales total amount. The sales date. Customer ID of the sales transaction. Product ID of what was sold.

Column ID Name Street City State

Customer Description Unique ID of customer. Customer name. Street address. Customer’s city. Customer’s state.

Column ProductID Description Price

Product Description Unique ID of product. Product description. Product price.

1. Identify the columns that would be candidates for a primary key or a foreign key. 2. Identify the relationships of the table joins, and the cardinality of these relationships. Answer

1. The primary keys are ID from the Sales table, ID from Customer table, and ProductID from the Product table. The foreign keys are Customer and Product columns in the Sales table. 2. The Sales table can be joined with Customer table using the Sales.Customer field and the Customer.ID field. The cardinality will be many-to-one; for example, there may be many Sales.ID records for each Customer.ID record. 305

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The Sales can also be joined with the Product table using the Sales.Product field and the Product.ID field. The cardinality will be many-to-one; for example, there may be many Sales.Product records for each Product.ID record. LO: 3, Bloom: AP, Difficulty: Medium, Min: 7, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

306

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Exercises 95. You are a tax accountant for Lightyear Electronics. The company has a global network of suppliers for its raw materials. You need to perform data analysis on customs duties that need to be remitted to the federal government. You are provided with four tables: DutiesData, Tariff, Suppliers, and Category. DutiesData is a fact table, and the other tables are dimension tables. The table descriptions and columns for each table are provided below. Table Name DutiesData Tariff Suppliers Category

Description Information on duty amount for each PO. The tariff rates for each country. Suppliers in the vendor master record. The commodity categories that each supplier provides.

DutiesData ID InvoiceAmt TariffAmt InvoiceID CountryShipFrom

Tariff Country TariffRate

Suppliers SupplierID SupplierName SupplierAddress SupplierCountry

Category SupplierID Category

1. What are the differences between a fact table and a dimension table? 2. Create a star schema using the DutiesData, Tariff, and Suppliers tables. 3. Create a snowflake schema using all four tables. Answer

1. In an accounting context, fact tables correspond to business transactions such as orders, sales, purchases, and payments. Dimensions provide context to analysis and give meaning to facts. 2. Create a star schema. Tariff

Country TariffRate

DutiesData ID InvoiceAmt TariffAmt InvoiceID CountryShipFrom SupplierID

Suppliers SupplierID SupplierName SupplierAddress SupplierCountry

1 N

3. Create a snowflake schema with the four tables. Tariff Country TariffRate

DutiesData ID InvoiceAmt TariffAmt

307

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Suppliers SupplierID Name Street

Category SupplierID Category

InvoiceID CountryShipFrom

City Country

LO: 6, Bloom: S, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

96. At Providence Commercial Trust, phishing attempts have been increasing. Employees have been reporting suspected phishing attempts. Emails of phishing attempts have been collected and the data is provided below. Date 12/1/2023 12/1/2023 12/5/2023 12/6/2023 12/7/2023 …

Email suppport@easymoney.com, gm@easymoney.ca AP@collections.com customersupport@deals.com gm@AirIndustries.com, VP@AirIndustries.sz help@amzn.zz, cs@aamzn.zz, support@amzn.zz …

Risk H High Low High High …

1. Identify two data problems with the table. 2. Address the issues by describing how the data can be transformed. 3. Assume that you need to count the number of unique emails that are suspected of phishing attempts. Provide the new table structure that would make it easier to perform the analysis. Populate the table using sample data. Answer 1. Data Problems Problem 1: Inconsistent Values The Risk column has inconsistent values since there are two or more different representations of the same value. By visually scanning the values in the Risk column, you can see that there are multiple representations of “High” and “Low”. Problem 2: Multi-Valued Column The Email column is a multi-valued column since some cells contain multiple values of the same characteristic. Columns that are not single-valued make analytics difficult. Each cell should contain one value describing one characteristic because two or more values in the same cell makes analysis more challenging. The best method to detect composite or multi-valued columns is visual scanning.

2. Transformations Problem 1: Values with a low frequency could indicate inconsistent data. ETL tools can identify the frequency of distinct values. Low frequencies might also indicate a misspelling resulting in an inconsistency. For example, there are fewer “H” values, so the value should be switched to “High”. Problem 2: A separate table should be created to transfer the multi-valued column into a single-valued column. There should be only one email in the Email column. 308

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3. The transformed table: Date 12/1/2023 12/1/2023 12/1/2023 12/5/2023 12/6/2023 12/6/2023 12/7/2023 12/7/2023 12/7/2023

Risk High High High Low How High High High High …

suppport@easymoney.com gm@easymoney.ca AP@collections.com customersupport@deals.com gm@AirIndustries.com VP@AirIndustries.sz help@amzn.zz cs@aamzn.zz support@amzn.zz …

…

LO: All, Bloom: S, Difficulty: Hard, Min: 20, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

97. You are a tax accountant at Ward & Smith Partners. You need to analyze your clients’ tax information. The results will segment your clients based on income levels and complexity, so senior accountants can be assigned to high income and complex clients. You are given the following database design. Column ClientID Emp Inv CG Dedn ST

File Description Unique ID of client. Employment income value. Investment income value. Capital gains value. Total value of deduction. Total tax liability.

Column State %

Description Unique code of state. State tax rate.

Data Type Text Fixed Decimal Number Fixed Decimal Number Integer Integer Text

Key Foreign

Data Type Text Integer

Key Foreign

Data Type Number Integer

Key Foreign

Text

Foreign

Primary

StateRate

Column ID Name ST

StateRate State %

Client Description Unique ID of client. The first and last name of client. State that the client is taxed in.

File

ClientID Emp Inv CG 309

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Client ID Name State

Dedn ST

Identify five data preparation patterns that need to be addressed. Discuss how the problems can be fixed. Answer

1. The column headers in the File and State tables are ambiguous which make it hard to understand and work with the data set. The columns should be renamed to be as follows:

Original Name Emp Inv CG Dedn ST %

New Name EmploymentIncome InvestmentIncome CapitalGain Deduction Deduction Deduction

2. The table name “File” is non-intuitive and ambiguous which will make it harder to understand and work with the data set. The table name should be renamed to be “TaxData” or “ClientTaxData”. 3. The Data Type is not correct for some columns. An incorrect data type limits what can be done with the data in a column. The “CG” and “Dedn” should be Fixed Decimal Numbers. The “%” column should be a Fixed Decimal Number or a Percentage. The Client.ID and File.Client.ID should have the same data type so that the tables can be combined. 4. The Name column in the Client table is a composite column. Since it is not a single-valued column, it will make sorting by first name or last name difficult. The column should be split into two columns. 5. The cardinality of the table relationships is not correct. The cardinality should be N:1 from File to State since there can be multiple File.ST values for every one StateRate.State value. The cardinality should be 1:1 between File to Client since there should only be one File.ClientID for every one Client.ID. The corrected star schema is provided below. StateRate State %

File

ClientID Emp Inv CG Dedn ST

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Client ID Name State

LO: All, Bloom: S, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management 98. You are an internal auditor for Yellow Star Insurance. Since there are increasing threats of fraud in the insurance industry, you have been asked to audit system access controls for when employees leave the organization. The employee records have been extracted from the HRIS system and the user access logs have been extracted from the ERP system. Employee ID 23402 23610 23612 23703 23713 …

Name Steven Carmen Lynn Moore Allen Chong Albert Shauna James …

LogInDate 13/10/2023 12:38 AM 13/12/2023 12:19 PM 13/13/2023 2:34 PM 13/12/2023 4:34 AM 13/10/2023 12:22 PM …

EndDate 2024-03-03 September 6, 2023 13/10/2023 Null 13/10/2023 …

ERP Employee 23610 23612 23703A 23610 23610 …

LogInDuration 30 40 mins 1 hour 2.3 mins 3 …

1. Identify four columns that have quality issues. Explain why. 2. Create a data dictionary for the columns for the table. 3. Create a star schema for the database. Answer

1. Data quality issues: i. The Employee.Name column has an incomplete value. “Albert” is missing a last name. ii. The LoggedInDuration does not have consistent values. The value should be numeric and should be measured by either minutes or hours so that it is consistent. iii. The EndDate does not have consistent values. The dates are not formatted consistently. iv. The ERP.Employee has invalid values. The employee should not have any text fields. The invalid value “23703A” should be changed to “23703”. 2. Data dictionaries: Employee 311

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Name

Description The unique ID of the employee. The full name of the employee. The employee’s last date of employment.

ID Employee EndDate

Name LogInDate Employee LogInDuration

Description System log in date. Employee ID who logged in. Duration of the system access.

Data Type Integer

Key Primary

Mandatory Yes

Text Yes Date No

ERP Data Type Date/Time Integer

Key

Mandatory Yes

Foreign Yes

Decimal Yes

3.Star schema for the database: Employee

ID Employee EndDate

ERP LogInDate Employee LogInDuration

LO: All, Bloom: S, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

99. Electric Wheels has implemented a new inventory management system to manage the inventory of electric bikes at its various locations. You received the following data extract from the inventory management system. The data structure needs to be transformed to make it easier to answer the following questions: 1. What is the inventory count for each product based on color at each store location? 2. What is the total inventory value? 3. How many orders should be placed based on the reorder point? Column ID Description Loc ROP QtyOnHand Price

DD E434

Description Date/Time Description and color. Location of the inventory Reorder point Quantity on hand Unit price of product

Description Panther, Red

Loc East, North 312

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ROP 10

QtyOnHand 12, 34

Price $229.99

E435 M342

Panther, Black Lynx, Orange

West East, West

20 20

M344 …

Lynx, Blue …

South …

20 …

$289.99 $29.99

33, 23 3 …

$329.99 …

1. Identify three data problems that need to be addressed. Discuss how the problems can be fixed. 2. Provide the new table structure that would make it easier to perform the analysis. Populate the table using sample data. Answer

1. Data problems: i. The Description column is a composite column. Color is not in a separate column, so the data cannot be analyzed using the color dimension. The column should be split into two columns: description and color. ii. Loc and QtyOnHand is a multi-valued column since some cells contain multiple values of the same characteristic. Columns that are not single-valued make analytics difficult. For example, the Loc column should contain one location so that analysis can be done by the location dimension. iii. The price has incorrect value. Product M342 has a very low price compared to the other prices. The price should be validated and corrected. 2. The transformed table should look as follows: ID E434 E434 E435 M342 M342 M344 …

Description Panther Panther Panther Lynx Lynx Lynx …

Color Red Red Black Orange Orange Blue …

Loc East North West East West South …

ROP 10 10 20 20 20 20 …

QtyOnHand

Price 12 34 22 33 23 3

…

$229.99 $229.99 $289.99 $329.99 $329.99 $329.99 …

LO: All, Bloom: S, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

100. Collins Realtors is analyzing the sales performance of its realtors. The information will be used to help predict the firm’s financial performance and reward top sales performers. You are a managerial accountant, and you need to compare sales between sales quarters, sales years, and realtors. Sales by realtor for each sales quarter are provided in the table below. SalesPeriod 2024, Q1 2024, Q2 2024, Q3 2024, Q4 2025, Q1

Manny Hau $130,343 $1,230,000 $1,302,909

Deborah Wong $430,030 $983,000 $1,222,392 $343,998

$349,200 313

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Jill Samuel $349,000 $234,800

Sam Brown $234,000 $203,000

$234,222

$498,000 $304,000

…

1. Discuss two data transformations that would make it easier to perform the analysis. 2. Provide the new table structure that would make it easier to perform the analysis. Populate the table using sample data. Answer 1. Data transformations:

ii.

The SalesPeriod column is a composite column since it combines values for two or more characteristics. Since it is not single-valued, it is more difficult to aggregate data by year sales quarters, sales years, and realtors. The column should be split into two columns: SalesYear and SalesPeriod. Since the table is in a crosstabulation table structure, there will be limitations for analysis. Since the salespeople are columns headers, they cannot be used for filter or group-by operations. The table structure will be changed into a flat table structure.

2. After the transformation, the table would look like this: SalesYear 2024 2024 2024 2024 2024 2024 2024 2024 …

SalesQtr 1 1 1 1 2 2 2 2 …

Salesperson Manny Hau Deborah Wong Jill Samuel Sam Brown Manny Hau Deborah Wong Jill Samuel Sam Brown …

SalesValue $130,343 $430,030 $349,000 $234,000 $1,230,000 $983,000 $234,800 $203,000 …

LO: All, Bloom: S, Difficulty: Hard, Min: 15, AACSB: Analytic, AICPA FC: Risk Assessment, Analysis, and Management

314

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Key Statistics on Questions 1. Question Type Counts Question Type

Count

Multiple Choice

Multiple Select

Short Answer

Brief Exercises

Exercises

Grand Total

100

2. Bloom’s Counts Rating

Total

Goal

55%

10%

Grand Total

100

35%

3. Level of Difficulty Counts Difficulty

Total

Goal

Easy

35%

Hard

10%

Medium

55%

Grand Total

100

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 6 Analysis: Information Modeling 1) Information modeling is the process of A) gathering and integrating during the data analysis phases. B) capturing data from transactional systems. C) generating additional knowledge from data that is relevant for analysis purposes. D) profiling, cleaning and restructuring data prior to analysis. Answer: C Explanation: Information modeling is the process of generating additional knowledge from data that is relevant for analysis purposes. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) Algorithms are A) sets of instructions that transform the data into information. B) sets of instructions used to clean the data prior to loading the data into analytical databases. C) sets of instructions used to validate the completeness and the correctness of the data prior to loading the data into analytical databases. D) sets of instructions used to integrate data from various data sources. Answer: A Explanation: Algorithms are sets of instructions that transform the data into information, which is the output of additional knowledge gained from the data. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 3) A calculated column A) should always result in a measure. B) is the result of the arithmetic function of other columns. C) should always result in a numeric data type. D) is the result of an algorithm that was applied using other columns. Answer: D Explanation: A calculated column is the result of an algorithm that was applied using other columns. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 316

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4) A measure is A) a calculated column that is created by algorithms and is used for analytical purposes. B) an information field that is created by algorithms and is used for analytical purposes. C) an integral part of a table since they are used for analytic purposes. D) an aggregate or total and is an integral part of the table. Answer: B Explanation: The second type of information field is a measure, which is an aggregate or total, that can be used in reports, and thus for analytical purposes. Measures are created by algorithms, but they are not integral parts of a table. Diff: 2 LO: 6-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 5) Performing data analysis involves A) using dimensions to determine the numbers to analyze and using measures to determine how to analyze them. B) using measures to determine the numbers to analyze and using dimensions to determine how to analyze them. C) using attributes to determine the numbers to analyze and using measures to determine how to analyze them. D) using measures to determine the numbers to analyze and using attributes to determine how to analyze them. Answer: B Explanation: Performing data analysis requires determining the numbers to analyze (these are the measures) and how to analyze them (these are the dimensions, or the fields that can slice them). Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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6) You are performing data analysis on employee expense reports. The following table has been extracted from the accounting information system. EmpID 203211 203212 203213 203211 203215 …

ExpenseID 3422340 3422341 3422342 3422343 3422344 …

Category Office Supplies Furniture Computer Equipment Computer Equipment Furniture

Amount ReceiptExists $203.34 Yes $22.52 Yes $13.34 Yes $205.36 Yes $123.44 No … …

Which statement is correct? A) EmpID, ExpenseID and Amount are measures, and Category and ReceiptExists are dimensions. B) EmpID, ExpenseID, Category, and ReceiptExists are measures and Amount is a dimension. C) EmpID, ExpenseID, Category, and ReceiptExists are dimensions, and Amount is a measure. D) Category is the only dimension, and Amount is the only measure. Answer: C Explanation: EmpID, ExpenseID, Category and ReceiptExists are dimensions since these fields can be sliced. Amount is a measure since it can be aggregated or totaled. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 7) A data model that includes calculated columns and measures are called A) an information model. B) a data view. C) a snowflake schema. D) a data schema. Answer: A Explanation: A data model shows the structure of a data set. It shows the concepts being described, the tables, and the fields used to describe the concepts. An information model extends the data model because it also includes calculated columns and measures. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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8) The two goals for building an information model for a star schema are A) to create a rich set of measures for the fact table and to create a rich set of dimensions that can slice measures in many ways. B) to create a rich set of measures for the dimension table and to create a rich set of calculated fields that can break down measures in many ways. C) to create a rich set of calculated columns for the dimension table and to create a rich set of dimensions that can slice measures in many ways. D) None of the answer choices are correct. Answer: A Explanation: The two goals for building an information model for a star schema are to create a rich set of measures for the fact table and to create a rich set of dimensions that can break down, or slice, measures in many ways. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 9) What is an information modeling pattern that is especially useful for creating financial ratios? A) How many B) Filtered aggregation C) Measure hierarchies D) Who-what-when star schema Answer: C Explanation: Measure hierarchies are used when a new, more complex measure is created using existing measures. In fact, complex problems can sometimes be solved by dividing the problem into smaller problems, then combining the different solutions. Measure hierarchies are especially useful when calculating ratios and benchmarks. Diff: 1 LO: 6-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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10) A who table refers to a A) fact table that describes the resources that were given up or acquired as part of a transaction. B) dimension table that describes the agents involved in the transactions. C) dimension table that describes the resources that were given up or acquired as part of a transaction. D) fact table that describes the agents involved in the transactions. Answer: B Explanation: A dimension table that describes the agents involved in the transactions is a who table. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 11) A what table refers to a A) dimension table that describes when a transaction occurs. B) dimension table that describes the resources that were given up or acquired as part of a transaction. C) fact table that describes when a transaction occurs. D) fact table that describes the resources that were given up or acquired as part of a transaction. Answer: B Explanation: A dimension table that describes the resources that were given up or acquired as part of a transaction is a who table. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 12) A dimension table that describes when a transaction occurs is called A) a who table. B) a fact table. C) a when table. D) a history table. Answer: A Explanation: A dimension table that describes when a transaction occurs is a when table. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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13) A participates relationship A) links resources to specific transactions. B) links the calendar to specific transactions. C) links agents to specific transactions. D) links dimensions to measures. Answer: C Explanation: A participates relationship links agents to specific transactions. Internal agents are the employees who participate in the transaction. External agents, such as customers and vendors, are parties external to the organization involved in the accounting transactions. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 14) A flows relationship A) links agents to specific transactions. B) links resources that were given up to specific transactions. C) links the calendar to specific transactions. D) links measures to dimensions. Answer: B Explanation: A flows relationship links resources to specific transactions. A dimension table that describes the resources that were given up or acquired as part of a transaction is a what table. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 15) A relationship that links the calendar to specific transactions is called A) a when relationship. B) a what relationship. C) a flows relationship. D) an occurs relationship. Answer: D Explanation: An occurs relationship links the calendar to specific transactions. A dimension table that describes when a transaction occurs is a when table. Such tables often take the form of a calendar table. Diff: 1 LO: 6-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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16) Creating a new field from one or more numeric columns in the same table is called A) a within-table numeric calculation. B) an in-table calculation. C) an in-table classification. D) a single-column aggregation. Answer: A Explanation: The within-table numeric calculation pattern creates a new field (a calculated column) from one or more numeric columns, or fields in the same table. Diff: 1 LO: 6-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 17) The statistical technique of grouping numbers into a smaller number of groups, such as age groups, is referred to as A) dimensioning. B) aggregation. C) data binning. D) categorization. Answer: C Explanation: The statistical technique of data binning is another example, where numbers are grouped into smaller numbers of "bins," such as age groups. Diff: 1 LO: 6-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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323) OfficeMart is a supplier of office furniture and office supplies. Their catalog is available their to customers' electronic procurement systems. Data analysis of their catalog pricing is required to ensure that they adhere to their minimum contracted discount percentage. The following table has been extracted from their pricing file. ProductID 213611 213612 213613 213614 …

Product Copy Paper Staples Office Chair Dry Erase Marker …

ListPrice NetPrice Discount $15.80 $12.64 20% $8.69 $6.95 20% $249.99 $187.49 25% $14.49 $11.59 20% … … …

An information modeling algorithm was created to calculate the Discount columns. What information modeling technique was used to create the Discount column? A) Within-table classification B) Single-column aggregation C) Within-table numeric calculation D) Within-table aggregation Answer: C Explanation: The within-table numeric calculation pattern creates a new field (a calculated column) from one or more numeric columns, or fields in the same table. Basic arithmetic operations of addition, subtraction, multiplication, and division can do this. Diff: 2 LO: 6-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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324) OfficeMart is a supplier of office furniture and office supplies. Their catalog is available their to customers' electronic procurement systems. Some of their customers' systems do not support the Size attribute of the product. The following table has been extracted from their pricing file. ProductID 213611 213612 213613 213614 …

Product Copy Paper Staples Office Chair Markers

Size Pkg of 500 Pkg of 50 1 unit Pkg of 12

ListPrice ProductDescription $15.80 Copy Paper, Pkg of 500 $8.69 Staples, Pkg of 50 $249.99 Office Chair, 1 unit $14.49 Markers, Pkg of 12 … …

An information modeling algorithm was created for the ProductDescription column. What information modeling technique was used to create the Discount column? A) Within-table text calculation B) Within-table classification C) Within-table numeric calculation D) Within-table aggregation Answer: A Explanation: A within-table text calculation involves creating a new calculated column from one or more fields in the same table using text fields. Diff: 1 LO: 6-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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325) OfficeMart is a supplier of office furniture and office supplies. Their catalog is available their to customers' electronic procurement systems. Data analysis of their catalog pricing is required to ensure that they adhere to their minimum contracted discount percentage. The following table has been extracted from their pricing file. ProductID 213611 213612 213613 213614 …

Product Copy Paper Staples Office Chair Marker

ListPrice NetPrice Discount DiscountType $15.80 $15.01 5% Low $8.69 $6.95 20% Medium $249.99 $187.49 25% High $14.49 $11.59 20% Medium … … …

An information modeling algorithm was created to calculate the DiscountType. For example, if the Discount is between 0% and 5%, the Discount Type will be Low. What information modeling pattern was used to create the Discount column? A) Within-table numeric calculation B) Within-table classification C) Single-column aggregation D) Within-table aggregation Answer: B Explanation: The within-table classification is used when classifications are determined based on data that are part of the same table. Diff: 1 LO: 6-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 21) What is a prerequisite for creating across-table calculations? A) The algorithm used in the across-table calculation must have the same data type. B) The cardinalities applied to the table relationships must be 1:1. C) A relationship must exist to link the tables together. D) The cardinalities applied to the table relationships must be 1:N. Answer: C Explanation: The across table calculation is when data from different tables are used to create a new column. This means the tables must be linked. The following cardinalities can be applied to the relationship: 1-1, 1-N, N-1, or N-N. The algorithm can use multiple data types when creating the new table. Diff: 1 LO: 6-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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22) When can measure hierarchies be applied? A) Measure hierarchies can be used to solve complex problems by creating complex algorithms within a single step. B) Measure hierarchies can be used to restructure the database so that analysis can be done more efficiently. C) Measure hierarchies can be used to solve complex problems when data is scattered among multiple tables. D) Measure hierarchies can be used to solve complex problems by dividing the problem into smaller problems, then combining the different solutions. Answer: D Explanation: A measure hierarchy is used when a new, more complex measure is created using existing measures. In fact, complex problems can sometimes be solved by dividing the problem into smaller problems, then combining the different solutions. Measure hierarchies are especially useful when calculating ratios and benchmarks. Diff: 1 LO: 6-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 23) You are provided with a table showing transactions for the month. The expenses have been classified into capitalized costs and non-capitalized expenses. You want to determine the percentage of transaction values that are classified as capitalized costs. Your approach is to determine the total value of transactions that are capitalized costs, and then determine the total value of all transactions. Your next step is to divide the total value of capital costs by the total value of all transactions. This is an example of A) measure hierarchies. B) data transformation. C) calculated hierarchy. D) hierarchical transactions. Answer: A Explanation: Measure hierarchies are used when a new, more complex measure is created using existing measures. In fact, complex problems can sometimes be solved by dividing the problem into smaller problems, then combining the different solutions. Measure hierarchies are especially useful when calculating ratios and benchmarks. Diff: 2 LO: 6-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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24) What is an example of measure hierarchies? A) Calculated sum of sales. Calculate sum of sales returns and allowances. Then calculate net sales by subtracting the sum of sales returns and allowances from the sum of sales. B) Aggregate total sales returns and allowances where transaction date is within the fourth quarter. C) Categorize sales transactions into the following sales sources: online, business-to-business, and in-store. D) Use the AVERAGEIF function in EXCEL to determine the value of online sales transactions. Answer: A Explanation: Measure hierarchies are used when a new, more complex measure is created using existing measures. In fact, complex problems can sometimes be solved by dividing the problem into smaller problems, then combining the different solutions. Measure hierarchies are especially useful when calculating ratios and benchmarks. Diff: 2 LO: 6-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 25) The information modeling pattern of how many can be used A) to count the number of instances in fact tables but not in dimension tables. B) to determine average values in dimension tables but not in fact tables. C) to determine average values in fact tables and in dimension tables. D) to count the number of instances in fact tables and dimension tables. Answer: D Explanation: The how many pattern creates a measure that counts the number of rows, or instances, of a concept within a table. This pattern can count resources, transactions, and agents, which means it can be used for both fact (transactions) and dimension (resources and agents) tables. Diff: 1 LO: 6-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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26) Which is an example of the information modeling pattern of how many? A) What was the total value of credit card transactions for each credit card owner? B) What is the count of credit card transactions that were rejected due to transaction dollar limits? C) What was the average value of credit card transactions? D) Which transactions were rejected to due transaction dollar limits? Answer: B Explanation: The how many pattern creates a measure that counts the number of rows, or instances, of a concept within a table. This pattern can count resources, transactions, and agents, which means it can be used for both fact (transactions) and dimension (resources and agents) tables. Diff: 1 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 27) Which is an example of the information modeling pattern of within-table numeric calculation? A) Calculate the average royalty percent for all authors. B) Determine the author that has the highest royalty percent. C) Calculate the royalty amount owed to authors by multiplying sales value and royalty percent. D) Calculate the total royalty amount owed to an author. Answer: C Explanation: The within-table numeric calculation pattern creates a new field (a calculated column) from one or more numeric columns, or fields in the same table. Diff: 2 LO: 6-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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28) Thunderbird Hotels has multiple brands of hotels. You are given the following table showing the revenue of each brand by location. Using the data provided in the table, how can the information modeling pattern of how many be applied? Location Austin Dallas Chicago Atlanta …

Westgate Broadway Proctor Peach Lanes $130,343 $430,030 $349,000 $234,000 $1,230,000 $983,000 $234,800 $203,000 $1,302,909 $1,222,392 $343,998 $234,222 $498,000 … … … …

A) How many hotel reservations did the Austin location have? B) How many hotel reservations did the Westgate brand have in the Chicago location? C) What was the total revenue of the Proctor brand? D) How many locations did Thunderbird Hotels operate in? Answer: D Explanation: The how many pattern creates a measure that counts the number of rows, or instances, of a concept within a table. This pattern can count resources, transactions, and agents, which means it can be used for both fact (transactions) and dimension (resources and agents) tables. A and B are not correct since the data shows the dollar amount of sales, not the number of reservations. C is not correct because it does not count the number of instances. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 29) The information modeling pattern of participates | transaction-who A) can be implemented by creating measures for transactions and calculated columns for resources. B) can be implemented by creating measures for transactions and calculated columns for calendars. C) can be implemented by creating measures for transactions and calculated columns for agents, resources, and calendars. D) can be implemented by creating measures for transactions and calculated columns for agents. Answer: D Explanation: The information modeling pattern of participates | transaction-who can be implemented by creating measures for transactions and calculated columns for agents. Diff: 1 LO: 6-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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30) The information modeling pattern of flows | transaction-what A) analyzes what is involved in a transaction. B) analyzes what caused a transaction to take place. C) analyzes who is involved in a transaction. D) integrates analysis of the who, what, and when transactions. Answer: A Explanation: The information modeling pattern of flows | transaction-what analyzes what is involved in a transaction. Diff: 1 LO: 6-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 31) The information modeling pattern of integrated star schemas A) analyzes how inflows and outflows affect agents. B) analyzes how inflows and outflows affect resources. C) integrates analysis of the who, what, and when transactions. D) integrates analysis of the who and what transactions. Answer: B Explanation: The information modeling pattern of integrated star schemas analyzes how inflows and outflows affect resources. Diff: 1 LO: 6-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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32) Dark House Coffee sells coffee to customers across the country. They need to remit sales taxes that have been collected from sales transactions to state governments on a regular basis. The following star schema diagram shows tax remittance transactions. TaxRemittance is a fact table and Product is a dimension table. The state is considered the external agent.

Describe the nature of the relationship between TaxRemittance and State. A) This is a flows relationship. B) This is a participates relationship. C) This is an occurs relationship. D) This is a dependent relationship. Answer: B Explanation: A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. The who is the state. Diff: 1 LO: 6-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 33) Dark House Coffee sells coffee to customers across the country. Purchases are made online, which exposes the company to cyber-attacks. Cyber-attacks have been logged and you need to create information models to analyze the data. The following star schema diagram shows cyber-attack attempts. Attacks is a fact table and Calendar is a dimension table.

Describe the nature of the relationship between Attacks and Calendar. A) There is a flows relationship from Attacks to Calendar. B) There is a participates relationship from Attacks to Calendar. C) There is an occurs relationship from Attacks to Calendar. D) There is a when relationship from Attacks to Calendar. Answer: C Explanation: An occurs relationship links the calendar to specific transactions. A dimension table that describes when a transaction occurs is a when table. Such tables often take the form of a Calendar table. Diff: 1 LO: 6-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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34) You are an internal auditor, and you are reviewing purchasing controls. You are given the following star schema showing purchase transactions. Purchases is a fact table and Approver is a dimension table.

Describe the nature of the relationship between Purchases and Approver. A) There is a participates relationship from Purchases to Approver. The Approver is the internal agent. B) There is a flows relationship from Purchases to Approver. The Approver is the internal resource. C) There is a participates relationship from Purchases to Approver. The Approver is the external resource. D) There is a flows relationship from Purchases to Approver. The Approver is the internal agent. Answer: A Explanation: A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 35) Dark House Coffee sells coffee to customers across the country. You are given the following star schema showing sales transactions. Sales is a fact table and Product is a Dimension table.

What measures can be created? A) TotalQuantitySold can be created for the Sales table. B) TotalQuantitySold can be created for the Product table. C) TotalSalesValue can be created for the Sales and Product tables. D) CountTransactions can be created for the Sales and Product tables. Answer: A Explanation: This is a flows relationship. For flows relationships, consider measures that summarize the physical and monetary flows. Answer A is correct since TotalQuantitySold is a measure based on an aggregation within the Sales table. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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36) Dark House Coffee sells coffee to customers across the country. You are given the following star schema showing sales transactions. Sales is a fact table and Product is a dimension table.

What dimensions can exist in the information model? A) ProductType can be a dimension in the Product table. B) TotalQuantitySold can be a dimension in the Product table. C) TotalQuantitySold can be a dimension in the Sales table. D) TransactionCount can be a dimension in the Product table. Answer: A Explanation: A is correct. The other answer choices are measures. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 37) Dark House Coffee sells coffee to customers across the country. You are given the following star schema showing sales transactions. Sales is a fact table and Product is a dimension table.

What measure can exist in the information model? A) ProductType can be a measure in the Product table. B) TotalQuantitySold can be a measure in the Sales table. C) SalesTransctionID can be a measure in the Sales table. D) TotalQuantitySold can be a measure in the Product table. Answer: B Explanation: B is correct. ProductType is a dimension. SalesTransctionID is a foreign key. TotalQuantitySold should be a measure in the Sales table instead of the Product table. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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38) Which question relies on a participates relationship? A) What is the total number of vehicles for each vehicle category? B) Which salesperson sold the greatest number of vehicles? C) What was the total sales revenue in the last quarter of the fiscal year? D) Which month has the lowest sales number? Answer: B Explanation: A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. The who is the salesperson. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 39) You are an internal auditor, and you need to create an information model to analyze sales returns. Which question relies on a flows relationship? A) Which employee processed the largest number of sales returns? B) Who were the top 10 customers with the most sales returns? C) Which products have the largest number of returns? D) Which employee processed the most sales returns in each month? Answer: C Explanation: A flows relationship links resources to specific transactions. The flows relationship describes what is involved in a transaction, such as goods and services. The resource is the product. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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40) You are an accounting information systems accountant, and you are reviewing the batch processing of bank credit transactions into the accounting information system. Which question relies on an occurs relationship? A) What is the average number of transactions processed for each batch? B) What is the total number of transactions processed for each batch? C) For batch failures, what error message was generated the most? D) How much time does it take to import credit card transactions into the accounting system? Answer: D Explanation: An occurs relationship links the calendar to specific transactions. It captures information about when a transaction occurs. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 41) What question represents a physical flow relationship? A) What is the value of material waste due to machine failures? B) What are product costs and period costs for this month's production? C) How many units of each product category were produced in the last fiscal quarter? D) All of the answer choices are correct. Answer: C Explanation: The physical flows describe how many. For example, how many units were produced? Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 42) Which question represents a monetary flow relationship? A) How many products should be produced to breakeven? B) What is the contribution margin value for the product being produced? C) What is the average demand of products on a monthly basis? D) What is the maximum production output per each machine? Answer: B Explanation: The monetary flows describe how much money. For example, what is the value of the units sold, and for how much have they been sold? Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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43) You are a financial accountant, and you need to analyze inventory write-offs for this year's financial statements. The data has been extracted from the accounting information system and information modeling needs to be applied. The following star schema diagram shows sales of its products. WriteOff is a fact table and Product is a dimension table.

Two measures are created within the WriteOff: TotalQuantity and TotalValue Describe the nature of the measures. A) TotalQuantity represents the physical flow of how many products were written-off. TotalValue represents the monetary flow of the value of products written-off. B) TotalQuantity represents the monetary flow of how many products were written-off. TotalValue represents the physical flow of the value of products written-off. C) TotalQuantity represents the monetary flow of the value of products written-off. TotalValue represents the physical flow of how many products were written-off. D) TotalQuantity represents the numeric flow of how many products were written-off. TotalValue represents the currency flow of the value of products written-off. Answer: A Explanation: The physical flows describe how many. For example, how many units were bought? The monetary flows describe how much money. For example, what is the value of the units sold, and for how much have they been sold? Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 44) You are a tax accountant at BTE Tax. You need to analyze data from the last tax season. Information modeling is being performed for your analysis. Which of the following relies on a participates relationship? A) How many tax returns were created this tax season? B) Who are the clients that have a tax liability of at least $10,000? C) What week of the year had the greatest number of tax filings? D) How many tax returns required a filing extension? Answer: B Explanation: A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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45) Lavender Spa offers a variety of spa services. You need to analyze the sales data. Information modeling is being performed for your analysis. Which question relies on a flows relationship? A) What spa services provide the greatest contribution margin? B) Who were the top 10 customers that generated the most revenue? C) What was the average revenue per customer visit? D) Which month generated the most revenue? Answer: A Explanation: A flows relationship links resources to specific transactions. The flows | transaction-what analyzes what is involved in a transaction. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 46) Lavender Spa offers a variety of spa services. You need to analyze the sales data. Information modeling is being performed for your analysis. Which question relies on an occurs relationship? A) What spa services were used by the top 10 customers? B) Which customers bundled at least two services per visit? C) What was the average revenue per customer visit? D) What spa services generated the most revenue for each month? Answer: D Explanation: An occurs relationship links the calendar to specific transactions. occurs | transaction-when pattern. It captures information about when a transaction occurs. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 47) In a who-what-when star schema A) the fact table connects the who, what and when tables. B) the dimension table connects the who, what and when tables. C) the who, what and when tables are directly connected with each other. D) the agent table connects the who, what, and when tables. Answer: A Explanation: Who-what-when star schemas are connected by fact tables. The transaction table connects to the who, what and when tables. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 48) What is a characteristic of the who-what-when schema pattern? A) It supports a wide range of accounting analyses. 337

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B) It enables integrated analyses of resource inflows and outflows. C) It combines multiple star schemas. D) All of the answer choices are correct. Answer: A Explanation: The who-what-when star schema pattern integrates the who, what, and when dimensions of transactions and supports a wide range of accounting analyses. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 49) An integrated star schema A) connects dimension tables to who, what and when tables. B) connects who, what and when tables directly with each other. C) enables integrated analyses of resource inflows and outflows using a single star schema. D) enables integrated analyses of resource inflows and outflows by combining multiple star schemas. Answer: D Explanation: An integrated star schema combines multiples star schemas and enables integrated analyses of resource inflows and outflows. Diff: 1 LO: 6-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 50) You need to create an information model for analyzing the purchase of inventory, inventory levels, and the depletion of inventory. What is the best information modeling pattern that should be used? A) Integrated star schemas B) Who-what-when schema pattern C) A star schema D) A flows | transaction-what pattern Answer: A Explanation: An integrated star schema combines multiples star schemas and enables integrated analyses of resource inflows and outflows. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 51) ValleyView Bank is an investment bank. With interest rates increasing during inflationary times, clients are investing in more fixed income investments compared to equity investments. The 338

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star schema summarizes the investment transactions.

What is a characteristic of the star schema? A) There is a flows relationship from InvestmentTrans to Customer. B) There is a flows relationship from InvestmentTrans to Investment. C) There is a participates relationship from InvestmentTrans to Investment. D) There is a participates relationship from InvestmentTrans to Calendar. Answer: B Explanation: A flows relationship links resources to specific transactions. The flows | transaction-what analyzes what is involved in a transaction. Investment is the what table. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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340) ValleyView Bank is an investment bank. With interest rates increasing during inflationary times, clients are investing in more fixed income investments compared to equity investments. The star schema summarizes the investment transactions.

Which statement is correct? A) The schema uses the who-what-when star schema. B) The schema uses the integrated star schema. C) Customer and InvestmentTrans are dimension tables. D) This is a snowflake schema. Answer: A Explanation: The who-what-when star schema pattern integrates the who, what, and when dimensions of transactions and supports a wide range of accounting analyses. Customer is the who table, Investment is the what table, and the Calendar is the when table. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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341) ValleyView Bank is an investment bank. With interest rates increasing during inflationary times, clients are investing in more fixed income investments compared to equity investments. The star schema summarizes the investment transactions.

Which of the following analyses cannot be explored with this information model? A) Who are the top five customers per investment type based on total Investment? B) What was the total investment per investment type by quarter? C) Which month had the greatest number of investment transactions? D) How many customers are there in each income category? Answer: C Explanation: Since month is not a calculated column in the star schema, questions around months cannot be answered. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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342) ValleyView Bank is an investment bank. With interest rates increasing during inflationary times, clients are investing in more fixed income investments compared to equity investments. The star schema summarizes the investment transactions.

What algorithm can be used to determine the total investment in the first quarter from customers who have a yearly income of $1 million? A) SUM(INVESTMENTTRANS.PRICE) × SUM(INVESTMENTTRANS.QUANTITY) WHERE QUARTER(CALENDAR.DATE) =1 AND CUSTOMER.YEARLYINCOME=>$1,000,000 B) SUM(INVESTMENTTRANS.PRICE) × SUM(INVESTMENTTRANS.TOTALINVESTMENT) WHERE QUARTER(CALENDAR.QUARTER) =1 AND CUSTOMER.YEARLYINCOME=>$1,000,000 C) SUM(INVESTMENTTRANS.PRICE × INVESTMENTTRANS.QUANTITY) WHERE QUARTER(CALENDAR.DATE) =1 AND CUSTOMER.YEARLYINCOME=>$1,000,000 D) SUM(INVESTMENTTRANS.PRICE × INVESTMENTTRANS.QUANTITY) WHERE QUARTER(CALENDAR.QUARTER) =1 AND INVESTMENT.INCOMECATEGORY=>$1,000,000 Answer: C Explanation: SUM(INVESTMENTTRANS.PRICE × INVESTMENTTRANS.QUANTITY) WHERE QUARTER(CALENDAR.DATE) =1 AND CUSTOMER.YEARLYINCOME=>$1,000,000. Diff: 3 LO: 6-3 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 55) Yellow Star Rentals is a vehicle rental company. The following chart shows sales of rental 342

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units by sales region and product category. What information modeling patterns were used in the data analytics?

A) Participates | transaction-who and flows | transaction-what B) Participates | transaction-who only C) Participates | transaction-who and occurs | transaction-when D) Flows | transaction-what and occurs | transaction-when Answer: A Explanation: The who table would store the sales region and the what table would store the product category. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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56) Yellow Star Rentals is a vehicle rental company. The following chart shows sales of rental units by sales region and sales quarter. What information modeling patterns were used in the data analytics?

A) Participates | transaction-who and flows | transaction-what B) Participates | transaction-who C) Who-what-when star schemas D) Flows | transaction-what and occurs | transaction-when Answer: C Explanation: The who-what-when star schema pattern integrates the who, what, and when dimensions of transactions and supports a wide range of accounting analyses. The who table will store the regions and the when table will store the sales quarter. The what table will exist in the who-what-when star schema but is not required in creating the bar chart. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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57) Yellow Star Rentals is a vehicle rental company. The following chart shows sales of rental units by product category. What information modeling patterns were used in the data analytics?

A) Flows | transaction-what and within-table numeric calculation B) Flows | transaction-what and filtered aggregation C) Participates | transaction-who and within-table numeric calculation D) Participates | transaction-who and filtered aggregation Answer: B Explanation: The what table would store the product category. The filtered aggregation would sum the rental units by quantity and the where clause will filter for Economy, Mid-size, or Luxury. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 58) You are a financial accountant within the treasury department at Bridgeport University. The star schema summarizes cash inflow and outflows of cash receipts to cash-to-cash disbursements. What is the best information modeling pattern that should be used? A) An integrated star schema B) A who-what-when schema pattern C) A single star schema D) A flows | transaction-what Answer: A Explanation: An integrated star schema combines multiples star schemas and enables integrated analyses of resource inflows and outflow. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 59) The following schema represents material purchase to materials Inventory to production 345

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output.

What information modeling pattern is being used? A) An integrated star schema B) A who-what-when schema pattern C) A star schema D) A flows | transaction-what Answer: A Explanation: An integrated star schemas combines multiples star schemas and enables integrated analyses of resource inflows and outflows. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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347) The following schema represents material purchase to materials inventory to productionoutput.

Which statement is correct? A) This is an integrated star schema. Purchases and ProductionOutput are fact tables, and Materials is a dimension table. B) This is who-what-when star schema. Materials is a fact table, and Purchases and ProductionOutput are dimension tables. C) This is who-what-when star schema. Materials is a who table, and Purchases and ProductionOutput are the what tables. D) This is an integrated star schema. Purchases and ProductionOutput are dimension tables, and Materials is a fact table. Answer: A Explanation: An integrated star schemas combines multiples star schemas and enables integrated analyses of resource inflows and outflows. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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348) The following schema represents material purchase to materials inventory to productionoutput.

Which question cannot be answered with this information model? A) How many production runs took place in February? B) How many material items were used in production in Week 50? C) What was the total target amount by material category? D) What was the total value of purchases by material item in Week 50? Answer: B Explanation: Week is not a calculated column in the ProductionCalendar table so this question cannot be answered. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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349) The following schema represents material purchase to materials inventory to productionoutput.

What calculation can be used to create the TargetAmount column within the Purchases table? A) PURCHASES.QUANTITY × MATERIAL.PRICE B) PURCHASES.AMOUNT × PRODUCTIONOUTPUT.TOTALQUANTITY C) PURCHASES.PRICE × PRODUCTIONOUTPUT.TOTALQUANTITY D) PURCHASES.QUANTITY × MATERIAL.TARGETPRICE Answer: D Explanation: Information modeling pattern is across-table calculation. The target amount will be based on multiplying Quantity from the Purchases table and TargetPrice from the Material table. Diff: 3 LO: 6-3 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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350) The following schema represents material purchase to materials inventory to productionoutput.

What statement is true? A) TargetAmount uses the information modeling pattern of across-table calculation, and TotalRunCount uses the information modeling pattern of how many. B) TargetAmount uses the information modeling pattern of within-table calculation, and TotalRunCount uses the information modeling pattern of how many. C) TargetAmount uses the information modeling pattern of across-table calculation, and TotalRunCount uses the information modeling pattern of within-table numeric calculation. D) TargetAmount uses the information modeling pattern of within-table calculation, and TotalRunCount uses the information modeling pattern of within-table numeric calculation. Answer: A Explanation: TargetAmount uses the information modeling pattern of across-table calculation since the calculation uses columns from two tables: Purchases.Quantity and Material.TargetPrice. TotalRunCount uses the information modeling pattern of how many since it counts the number of rows in the table. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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351) Lighting Star is a financial technology firm that offers peer-to-peer lending. Individuals andsmall businesses can use their online platform to offer loans to their peers. The star schema summarizes the loan transactions.

What calculated column can be created for the star schema? A) A within-table numeric calculation can be created to group credit scores into credit score ranges or bins. B) A within-table classification can be created to categorize credit scores into credit score ranges or bins. C) A within-table calculation can be created to group credit scores into credit score ranges or bins. D) A within-table text calculation can be created to group credit scores into credit score ranges or bins. Answer: B Explanation: The within-table classification is used when classifications are determined based on data that are part of the same table. The credit score can be classified into bins such as high, medium or low based on the numeric score. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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352) Lighting Star is a financial technology firm that offers peer-to-peer lending. Individuals andsmall businesses can use their online platform to offer loans to their peers. The star schema summarizes the loan transactions.

What information modeling pattern can be used to create a measure? A) A within-table numeric calculation can be created to determine the dollar value of the interest that the borrower will need to pay. B) A within-table classification can be created to categorize yearly income into income ranges or bins. C) A within-table text calculation can be created to append the borrower's first name and last name. D) A single-column aggregation can be created to determine the average yearly income for all Investors. Answer: D Explanation: Single-column aggregation applies a mathematical operation to all the values of a Single column. Operations that can be applied include aggregate functions such as SUM, AVERAGE, COUNT, MIN, and MAX. Each of these functions generate a single value. The other answer choices are calculated columns. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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353) Lighting Star is a financial technology firm that offers peer-to-peer lending. Individuals andsmall businesses can use their online platform to offer loans to their peers. The star schema summarizes the loan transactions.

What would be the algorithm to calculate the average length of a loan for investors who have a yearly income of greater than $500,000? A) LOANTRANSACTION.DUEDATE — LOANTRANSACTION.TRANSACTIONDATE WHERE INVESTOR.YEARLYINCOME > $500,000 B) AVERAGE(LOANTRANSACTION.DUEDATE) — AVERAGE(LOANTRANSACTION.TRANSACTIONDATE) WHERE INVESTOR.YEARLYINCOME > $500,000 C) AVERAGE(LOANTRANSACTION.DUEDATE) — AVERAGE(LOANTRANSACTION.TRANSACTIONDATE) WHERE AVERAGE(INVESTOR.YEARLYINCOME)> $500,000 D) AVERAGE(LOANTRANSACTION.DUEDATE — LOANTRANSACTION.TRANSACTIONDATE) WHERE INVESTOR.YEARLYINCOME > $500,000 Answer: D Explanation: AVERAGE(LOANTRANACTION.DUEDATE LOANTRANACTION.TRANSACTIONDATE) WHERE INVESTOR.YEARLYINCOME > $500,000. The measure uses the information modeling pattern of filtered aggregation. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 353

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354) Lighting Star is a financial technology firm that offers peer-to-peer lending. Individuals andsmall businesses can use their online platform to offer loans to their peers. The star schema summarizes the loan transactions.

What would be the algorithm to calculate the total principal amount that investors are providing during the month of January? A) SUM(LOANTRANSACTION.PRINCIPALAMOUNT) WHERE MONTH(CALENDAR.DATE) = 1 B) SUM(LOANTRANSACTION.PRINCIPALAMOUNT × LOANTRANSACTION.INTERESTRATE) WHERE MONTH(CALENDAR.DATE) = 1 C) SUM(INVESTOR.YEARLYINCOME) WHERE MONTH(CALENDAR.DATE) = 1 D) SUM(INVESTOR.YEARLYINCOME) WHERE MONTH(LOANTRANSACTION.DATE) =1 Answer: A Explanation: SUM(LOANTRANSACTION.PRINCIPALAMOUNT) WHERE MONTH(CALENDAR.DATE) = 1. The measure uses the information modeling pattern of filtered aggregation. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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68) Select all that apply. A single-column aggregation A) applies mathematical operations to all values in a single column such as SUM, AVERAGE, AND COUNT. B) applies mathematical operations to selected values in a single column such as SUM, AVERAGE, AND COUNT. C) results in a single value. D) results in multiple values. Answer: A, C Explanation: Single-column aggregation applies a mathematical operation to all the values of a single column. Operations that can be applied include aggregate functions such as SUM, AVERAGE, COUNT, MIN, and MAX. Each of these functions generate a single value. Diff: 2 LO: 6-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 69) What are examples of functions used for filtered aggregation? Select all that apply. A) WHERE clause in SQL B) COUNTIF in Excel C) MAX in Excel D) AVERAGEIF in Excel Answer: A, B, C, D Explanation: There are different ways to implement filtered aggregations. The method often depends on the software being used. In Excel, use the SUMIF, COUNTIF, AVERAGEIF, etc., functions. In SQL, use the WHERE clause. In Power BI, create filters in the Filters pane, or use the CALCULATE function. Diff: 2 LO: 6-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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70) You are implementing information models to show inflows and outflows that affect resources. Your implementation involves creating measures for transactions and calculated columns for resources. What information models are you implementing? Select all that apply. A) Integrated star schemas B) How many C) Flows | transaction-what D) Participates | transaction-who Answer: A, C Explanation: Integrated star schemas analyze how inflows and outflows affect resources. To implement, create measures for transactions and calculated columns for resources. Flows | transaction-what analyzes what is involved in a transaction. To implement, create measures for transactions and calculated columns for resources. Diff: 1 LO: 6-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 71) Which questions rely on a participates relationship? Select all that apply. A) Which employee processed the largest number of sales returns? B) Who were the top 10 customers that had the largest sales? C) What products have the largest number of returns? D) What month had the most sales of returns by dollar value? Answer: A, B Explanation: A and B are correct. A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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72) Nitro Racquets manufactures six models of tennis racquets. You are creating information models to analyze sales data. Which questions rely on a flows relationship? Select all that apply. A) What is the count of sales transactions for each tennis racquet model by fiscal quarter? B) What is the average sales total by month? C) Which tennis racquet had the largest number of sales? D) For each tennis racquet model, what retailer purchased the greatest number of racquets? Answer: A, C, D Explanation: B is incorrect since it requires the occurs relationship. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 73) You are a management accountant, and you are reviewing the production output and the sales demand of electric scooters. Which questions rely on an occurs relationship? Select all that apply. A) What months are projected to have a shortage of electric scooters? B) What production plant is producing the greatest number of electric scooters? C) What model of electric scooter has the greatest number of sales in each month? D) What is the average demand of units on a monthly basis? Answer: A, C, D Explanation: An occurs relationship links the calendar to specific transactions. occurs | transaction-when pattern. It captures information about when a transaction occurs. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 74) You are a tax accountant at BTE Tax. You need to analyze data from the last tax season. Information modeling is being performed for your analysis. Which questions rely on an occurs relationship? Select all that apply. A) Who are the clients that have a total income over $100,000? B) How many tax returns were created in this tax season? C) What week of the year had the greatest number of tax filings? D) How many tax returns required a filing extension due missing the filing deadline? Answer: B, C, D Explanation: An occurs relationship links the calendar to specific transactions. occurs | transaction-when pattern. It captures information about when a transaction occurs. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 75) Lavender Spa offers a variety of spa services. You need to analyze the sales data. Information 357

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modeling is being performed for your analysis. Which questions rely on a participates relationship? Select all that apply. A) What spa services generated the most revenue by month? B) Who were the top 10 customers that generated the most revenue? C) Which massage therapist generated the greatest number of tips and gratuities? D) Which customers purchased bundled services? Answer: B, C, D Explanation: A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 76) Lavender Spa offers a variety of spa services. You need to analyze the sales data. Information modeling is being performed for your analysis. Which questions rely on a flows relationship? Select all that apply. A) What spa services were used by the top 5 customers? B) Which customers bundled at least three services per visit? C) What months generated the most revenue for the company? D) What spa services generated the most revenue for each month? Answer: A, D Explanation: A flows relationship links resources to specific transactions. The flows | transaction-what analyzes what is involved in a transaction. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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77) Nitro Racquets manufactures six models of tennis racquets. You are creating information models to analyze sales data. Which questions can be asked using the who-what-when star schema? Select all that apply. A) How does the sales revenue of racquets compare from the third quarter to the fourth quarter? B) How many sales orders were delayed due to stock shortages? C) What tennis racquet model generated the most revenue? D) Which retailer purchased the greatest number of racquets by month? Answer: A, B, C, D Explanation: The who-what-when star schema pattern integrates the who, what, and when dimensions of transactions and supports a wide range of accounting analyses. All of the answer choices can be answered using the who-what-when star schema. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 78) You are a financial accountant, and you need to review purchase transactions. You create a star schema and develop information models. Which questions represent monetary flows? Select all that apply. A) How does the value of office supplies purchases compare between the first quarter and second quarter? B) How many computers were purchased in September? C) What was the total value of purchases from computer suppliers? D) How many computer orders were not fulfilled due to stock shortages? Answer: A, C Explanation: The monetary flows describe how much money. The other answers represent physical flows. Diff: 2 LO: 6-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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79) What are measure hierarchies? Provide an example within an accounting context. Answer: Measure hierarchies are used when a new, more complex measure is created using existing measures. Complex problems can sometimes be solved by dividing the problem into smaller problems, then combining the different solutions. An example is analyzing the variance between total budgeted and total actual values. Step 1: TotalBudgeted: Sum(Budgeted Value) Step 2: TotalActual: Sum(Actual Value) Step 3: VariancePercentage: (TotalActual - TotalBudget)/TotalBudget Diff: 2 LO: 6-2 Bloom: AP Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 80) Explain when an integrated star schema can be used. Provide an accounting scenario of when an integrated star schema will be useful. Answer: Integrated star schemas can be used to analyze how inflows and outflows affect resources. To implement, create measures for transactions and calculated columns for resources. For example, fixed asset acquisitions will be an inflow to fixed assets and depreciation will be an outflow from fixed assets. Diff: 1 LO: 6-3 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 81) What is a who-what-when star schema? Within an accounting context, provide a data analysis question that can be asked using the who-what-when star schema. Answer: A who-what-when star schema is when the transaction table connects to the who, what and when tables. Any transaction measures in the fact table can be broken down by any combination of dimensions (who, what, and/or when), and these breakdowns can be shaped through a variety of visualizations. It can be used to answer the following question: What is the total quantity sold per model (what) during the first quarter (when) to customers living in Florida (who)? Diff: 1 LO: 6-3 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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82) Distinguish between a what table, a who table, and a when table. Provide an example of each. Answer: A what table is a dimension table that describes the resources that were given up or acquired as part of a transaction. For example, an item master table. A who table is a dimension table that describes the agents involved in the transactions. For example, a customer table. A when table is a dimension table that describes when a transaction occurs. For example, a calendar table. Diff: 1 LO: 6-1 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 83) Explain the difference between a calculated column and a measure. Provide an example of each term within an accounting context. Answer: Calculated columns are new columns with values that are calculated, row-by-row, from existing data. Measures are aggregates resulting from vertical calculations that can be broken down in many different ways. Information models are built using calculated columns and measures. A calculated field can be SalesDiscount = Price × DiscountPercentage. A measure can be AveragePrice = Average(Price). Diff: 1 LO: 6-1 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 84) Explain what a flows relationship is. Provide an example within an accounting context. Draw the schema to show the table relationship and indicate the cardinal relationships. Answer: The flows relationship describes what is involved in a transaction, such as goods and services. A transaction results in either an increase or a decrease of the resources. Sales is a fact table and Product is a dimension table.

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Draw the schema to show the table relationship and indicate the cardinal relationships. Answer: A participates relationship links agents to specific transactions. The participates | transaction-who pattern captures information about who is involved in the transactions. For example, Sales is a fact table and Customer is a dimension table.

Diff: 1 LO: 6-1 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 86) Discuss the information modeling pattern of within-table classification. Discuss how it can be applied to a table that stores accounts receivable data. Answer: The within-table numeric calculation pattern creates a new field (a calculated column) from one or more numeric columns, or fields in the same table. For example, classifying accounts receivable by age can be done to determine bad debt expense. Diff: 1 LO: 6-2 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 87) What is the difference between the information modeling pattern of how many and single-column aggregation? Answer: Single-column aggregation applies a mathematical operation to all the values of a single column. Operations that can be applied include aggregate functions such as SUM, AVERAGE, COUNT, MIN, and MAX. Each of these functions generate a single value. The how many pattern creates a measure that counts the number of rows, or instances, of a concept within a table. This pattern can count resources, transactions, and agents, which means it can be used for both fact (transactions) and dimension (resources and agents) tables. The how many pattern is a form of a single-column aggregation. It uses the aggregation function of COUNT. Both patterns generate a single value. Diff: 1 LO: 6-3 Bloom: C Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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88) You are a managerial accountant at Bridgeport University, and you need to review procurement spending. Contracts have been created with approved suppliers to take advantage of favorable pricing. The following table has been provided: PurchaseID 1103341 1343011 1343012 1234205 …

Date 2023-10-01 2023-12-05 2023-12-06 2023-12-11 …

VendorID Approved Amount 234321 Yes $5,100 232334 Yes $8,000 235321 No $10,100 235922 No $3,098 … … …

a. Explain the information modeling pattern of measure hierarchies. b. Using the measure hierarchies pattern, define the algorithm that will determine the percentage of the purchases with approved suppliers? Answer: a. A measure hierarchy is used when a new, more complex measure is created using existing measures. b. Step 1: TOTALPURCHASES = SUM(AMOUNT) Step 2: TOTALAPPROVEDPURCHASES = SUM(AMOUNT) WHERE APPROVED = "Yes" Step 3: APPROVEDPERCENT = TOTALPURCHASES/ TOTALAPPROVEDPURCHASES Diff: 2 LO: 6-2 Bloom: AP Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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89) You need to create an information model to track employee training and development. The tables should store employee information, the courses taken, the course details, such as the date and the cost of the course. Draw the information model using a star schema. Indicate which tables are the fact, who, what, and occurs tables. Show the table relationship and their cardinalities. Provide at least three examples of columns for each table. Answer:

Diff: 2 LO: 6-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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90) You are an auditor for Total Assurance Partners. You are validating cash flow values by activity. The clustered bar chart provided show cash flow by activity and fiscal quarter.

a. You are asked to determine the ratio of total investing activities to total operating activities. What information modeling pattern would you use? Explain your answer. b. You are asked to determine the total cash inflow and the total cash outflow. What information modeling pattern would you use? Explain your answer. Answer: a. The measure hierarchies pattern should be used to answer this question. A measure hierarchy is used when a new, more complex measure is created using existing measures. Complex problems can sometimes be solved by dividing the problem into smaller problems, then combining the different solutions. The total of investing activity should be determined, then the total of operating activity should be determined. The two values will be used in the ratio. b. The filtered aggregation pattern should be used to answer this question. The filtered aggregation filters the data in a single column based on one or more criteria and then aggregates the remaining values. Filtered aggregation can be used to filter on activities that generated cash inflows and filter on activities that generated cash outflows. Diff: 2 LO: 6-2 Bloom: AP Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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91) You are a tax accountant of Cornerstone Tax. You need to analyze your client's sources of taxable income. Examples of taxable income include employment income, interest income, taxable gains, and self-employment income. The income source needs to be filtered by US income sources only. Discuss three information modeling patterns that can be used to create a bar chart showing the income totals by income category. Answer: a. Single-column aggregation applies a mathematical operation to all the values of a single column. Single-column aggregation of SUM can be used to total the income values. b. The information modeling pattern of flows | transaction-what analyzes what is involved in a transaction. The flows | transaction-what can be used to analyze what income sources are involved in a transaction. c. The filtered aggregation filters the data in a single column based on one or more criteria and then aggregates the remaining values. The filtered aggregation can be used to filter on US income sources. Diff: 2 LO: 6-2, 6-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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92) The star schema shows employee expense transactions. Identify three issues with the star schema. Explain your answer.

Answer: 1. Customer.CountExpense should not be part of the Customer table. It should be moved as a measure within the Employee table since it's a measure using the TransactionID column. 2. ExpenseAfterTax should be labeled as a calculated column since it's based on the addition of PreTaxValue and TaxValue. 3. TotalExpense and AverageExpenseValue should be labeled as measures since they are single column aggregations. 4. Quarter and Month should be calculated columns since it's based on the Date value and is not an aggregation. Diff: 2 LO: 6-2, 6-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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93) You are a financial accountant, and you are asked to analyze financial ratios for the company. You are provided with a table showing accounts and their values. Define the algorithm for creating the current ratio using the measure hierarchies pattern. Category Current Assets Current Assets Non-current Asset Current Liabilities Current Assets …

Description Cash and Cash Equivalents Short Term Investments Long Term Investments Accounts Payables Accounts Receivables

Amount $33,203 $22,034 $131,334 $45,536 $62,344 …

Answer: Step 1: CURRENTASSET = SUM(AMOUNT) WHERE CATEGORY = "Current Assets" Step 2: CURRENTLIABILITY = SUM(AMOUNT) WHERE CATEGORY = "Current Liabilities" STEP 3: CURRENTRATIO = CURRENTASSET/CURRENTLIABILITY Diff: 2 LO: 6-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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94) Eagle Eye is a manufacturer of drones for the global market. The following star schema shows the inflows and outflows of raw materials from purchases to material inventory to production output.

a. Create a measure using the information modeling pattern of filtered aggregation. Define the algorithm for the measure. b. Create a column using the information modeling pattern of within-table numeric calculation. Define the algorithm for the calculated column. c. Create a measure using the information modeling pattern of across-table aggregation. Define the algorithm for the measure. d. Create a measure using the information modeling pattern of how many. Define the algorithm for the measure. Answer: a. Total value of purchases for a supplier: TOTALPURCHASESUPPLIER = SUM(PURCHASES.PONUMBER) WHERE VENDOR = "SUPPLIER NAME" b. Purchase amount of a purchase order: PURCHASES.AMOUNT = PURCHASES.PRICE × PURCHASES.QUANTITY c. Variance between purchase price and targeted price: PURCHASES.PRICEVARIANCE = PURCHASES.PRICE - MATERIALS.TARGETPRICE d. Count of unique materials: COUNTMATERIALS = COUNT(MATERIALS.MATERIALID) Diff: 2 LO: 6-2, 6-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 369

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95) ElectroWheels is a manufacturer of electric scooters. An information model is required to analyze depreciation of its fixed assets. The company uses the straight-line depreciation method. You are provided with a table showing the fixed assets' historic price, purchase date, the useful life in years, and its salvage value. AssetID 10334 34301 34301 23420 …

Asset Truck Machine 1 Machine 2 Forklift …

PurchasePrice SalvageValue UsefulLife $51,000 $5,000 10 $930,000 $80,000 8 $1,100,000 $100,000 8 $12,000 $343,998 10 … … …

a. Define the algorithm for creating a calculated column to determine the depreciation. Name the column to be DEPRECIATION. b. Define the algorithm for creating a measure for the total depreciation of assets with a useful life of 10 years or more. Assume that the calculated column, DEPRECIATION, has been created. Name the measure to be TOTALDEPRECIATION. c. Create a star schema that shows the fact and dimension tables. Show the DEPRECIATION column and the TOTALDEPRECIATION measure. Answer: a. DEPRECIATION = (PURCHASEPRICE — SALVAGEVALUE) / USEFULLIFE b. TOTALDEPRECIATION =SUM(DEPRECIATION) WHERE USEFULIFE >= 10. c. Star schema:

Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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96) OffRoad Tours offers local adventure tours in the Rocky Mountains. Cash flow is an ongoing concern for the company. You are a financial accountant, and you need to analyze cash flow. A star schema has been created to show cash inflows and outflows.

a. What information modeling pattern is being shown in the schema? Explain your answer. b. You want to know the total cash received value in March. Define the algorithm for answering the question. What information modeling pattern is used? c. You want to know the difference between the total cash value that was received in December compared to the total cash disbursement in December. Define the algorithm for answering the question. What information modeling pattern is used? Answer: a. The information modeling pattern is an integrated star schema since it analyzes how inflows and outflows affect resources. The resource is cash in this example. b. The information modeling pattern is filtered aggregation. TOTALCASHRECEIVED = SUM(CASHRECEIPT.AMOUNT) WHERE MONTH(RECEIPTCALENDAR) = 3 c. The information modeling pattern is measure hierarchies. Step 1: TOTALCASHRECEIVED = SUM(CASHRECEIPT.AMOUNT) WHERE MONTH(RECEIPTCALENDAR.DATE) = 12 Step 2: TOTALCASHDISBURSED = SUM(CASHDISBURSEMENT.AMOUNT) WHERE MONTH(DISPERSEMENTCALENDAR.DATE) = 12 Step 3: CASHFLOWDECEMBER = TOTALCASHRECEIVED - TOTALCASHDISBURSED Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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97) DigitalArts is a video gaming service that offers subscription-based access to online video games. You need to analyze sales performance. a. Create a star schema model for the data that will allow you to compare revenue subscription counts by age groups. Indicate which tables are the fact, the what, and the occurs tables. Show the table relationship and their cardinalities. Provide at least three examples of columns for each table. Provide an example of a calculated column and an example of a measure. b. Define the algorithm for the calculated column in your example. What information modeling pattern is used for this column? c. Define the algorithm for the measure in your example. What information modeling pattern is used for this measure?

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Answer: a. Star Schema:

b. The information modeling pattern is within-table classification. AGEGROUP = IF(CUSTOMER.AGE < 20) THEN "0 to 19" ELSE IF (CUSTOMER.AGE >= 20 and CUSTOMER.AGE < 30) THEN "20 to 29" ELSE IF (CUSTOMER.AGE >= 30 and CUSTOMER.AGE < 40) THEN "30 to 39" ELSE IF (CUSTOMER.AGE >= 40 and CUSTOMER.AGE < 50) THEN "40 to 49" ELSE "50+" END c. The information modeling pattern is single-column aggregation. NUMBEROFSALESORDERS = COUNT(SALESORDERID) Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 12 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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98) PowerBlast is a manufacturer of solar panels. The following stacked area chart shows product costs broken out by direct materials, direct labor, and overhead.

a. Create the star schema that was used to create the stacked area chart. Indicate which tables are the fact, the what, and the occurs tables. Show the table relationship and their cardinalities. Provide at least three examples of columns for each table. Provide an example of a calculated column and an example of a measure. b. Define the algorithm for the calculated column in your example. What information modeling is used for this column? c. Define the algorithm for the measure in your example. What information modeling pattern is used for this measure?

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Answer: a. Star Schema:

b. The information model pattern is a within-table numeric calculation. YEAR = YEAR(CALENDAR.DATE) c. The information model pattern is a single-column aggregation. TOTALCOST = SUM(COSTVALUE) Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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99) You are a financial analyst at FeetFirst, a national retailer of shoes. You are asked to show the salary distribution of employees. You want to create the following histogram chart that shows employees by salary ranges.

a. You are provided with the Payroll and Employee tables. Create the star schema model that was used to create the histogram chart. Indicate which tables are the fact and the who tables. Show the table relationship and their cardinalities. Provide at least three examples of columns for each table. Provide an example of a calculated column and an example of a measure. b. Define the algorithm for the calculated column in your example. What information modeling pattern is used for this column? c. Define the algorithm for the measure in your example. What information modeling pattern is used for this measure?

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Answer: a. Star Schema:

b. The information model pattern is within-table numeric calculation. PAYMENTVALUE = PAYROLL.RATE × PAYROLL.HOURS c. The information model pattern is within-table classification. TOTALPAYMENTRANGE = IF SUM(PAYMENTVALUE) >= $30,000 and SUM(PAYMENTVALUE) < $40,000 THEN "30-39K" ELSE IF SUM(PAYMENTVALUE) >= $40,000 and SUM(PAYMENTVALUE) < $50,000 THEN "40-49K" ELSE IF SUM(PAYMENTVALUE) >= $50,000 and SUM(PAYMENTVALUE) < $60,000 THEN "50-59K" ELSE IF SUM(PAYMENTVALUE) >= $60,000 and SUM(PAYMENTVALUE) < $70,000 THEN "60-69K" ELSE IF SUM(PAYMENTVALUE) >= $70,000 and SUM(PAYMENTVALUE) < $80,000 THEN "70-79K" END Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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100) Jupiter Technologies is a producer of smart home devices. As a technology company, there is heavy reliance on early adopters to test and create excitement around new products. You are a financial analyst, and you want to create the following clustered bar chart that shows sales units by the early adopter market and the main market. The sales units are broken out by month.

a. You are provided with the sales, customer, and market tables. Create the star schema model that can be used to create the clustered bar chart. Indicate which tables are the fact, the who, the what, and the occurs tables. Show the table relationship and their cardinalities. Provide at least three examples of columns for each table. Provide an example of a calculated column and an example of a measure. b. Define the algorithm for the calculated column in your example. What information modeling pattern is used for this column? c. Define the algorithm for the measure in your example. What information modeling pattern is used for this measure?

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Answer: a. Star Schema:

b. The information model pattern is within-table text calculation. NAME = CUSTOMERMARKET.FIRSTNAME & " " & CUSTOMERMARKET.LASTNAME c. The information model pattern is single column aggregation. SUMOFQUANTITY = SUM(QUANTITY) Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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101) Vision First is an online prescription eyewear provider. They are known for their generous return policies. You are a managerial accountant, and you are asked to analyze sales and sales returns. You want to create the following clustered bar chart that shows sales and sales return by month.

a. You are provided with the Sales, Customer, and Product tables. Create the star schema model that was used to create the clustered bar chart. Indicate which tables are the fact, the who, the what, and the occurs tables. Show the table relationship and their cardinalities. Provide at least three examples of columns for each table. Provide an example of a calculated column and an example of a measure. b. You want to answer what is the percentage of sales dollars that were returned in December. Define the algorithm to answer this question. What information modeling patterns were used? c. You want to answer what is the count of sales for December for prescription sunglasses. Define the algorithm to answer this question. What information modeling patterns were used?

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Answer:

a. This measure uses the information model pattern of measure hierarchies and filtered aggregation. Step 1: TOTALSALES = SUM(SALESVALUE) WHERE SALESVALUE = "SALES" Step 2: TOTALSALESRETURN = SUM(SALESVALUE) WHERE SALESVALUE = "RETURNS" STEP 3: RETURNSPERCENT = TOTALSALESRETURN / TOTALSALES × 100 b. The information model pattern is filtered aggregation. COUNTOFSALESDECEMBER = COUNT(SALES.TRANSACTIONID) WHERE MONTH(CALENDAR.DATE) = 12 Diff: 3 LO: 6-1, 6-2, 6-3 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 7 Analysis: Data Exploration 1) Engaging in the process of data exploration results in generating A) data. B) information. C) insights. D) reports. Answer: C Explanation: Generating insights is the final step in the process of data exploration. The preceding steps are: 1) identify questions, 2) identify data relationships, 3) explore data relationships, and 4) generate insights. Diff: 1 LO: 7-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 2) The act of contextualizing and understanding insights is A) data collection. B) exploration. C) interpretation. D) reporting. Answer: C Explanation: Interpretation is the step of understanding insights before reporting. Data collection and exploration are earlier stages of data exploration. Diff: 1 LO: 7-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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3) The first step in data exploration is A) exploring data relationships. B) generating insights. C) identifying data relationships. D) identifying the questions. Answer: D Explanation: The steps in the process of data exploration are: 1) identify questions, 2) identify data relationships, 3) explore data relationships, and 4) generate insights. Diff: 1 LO: 7-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 4) Communicating insights should be done via A) data collection. B) interpretation. C) reporting. D) visualization. Answer: C Explanation: Communication is the final part of the data analysis process, and reporting is the form of communication that is most desirable. Reports can be in the form of visualizations (i.e., charts, graphs, etc.). Diff: 1 LO: 7-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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5) The foundational data relationship that best visualizes patterns of change including growth, fluctuation, and decline is A) distribution. B) geospatial. C) ranking. D) time series. Answer: D Explanation: Growth, fluctuation, and decline are indicators that happen as a result of the change. As change happens in time intervals, the time series foundational relationship must be used. Diff: 1 LO: 7-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 6) Decision-making in organizations should be based upon A) data. B) information. C) insights. D) reporting. Answer: C Explanation: Insights serve as the answers to questions posed by the business. Data and information form the basis of insights, and reporting is a means of communicating insights. Diff: 1 LO: 7-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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7) Which type of chart is best for visualizing time series? A) Column charts B) Line charts C) Pie charts D) Vertical bar charts Answer: B Explanation: A continuous line can capture fluctuations, growth, and decline more readily than column charts. Pie charts and vertical bar charts do not convey growth, fluctuations, or declines at all. Diff: 1 LO: 7-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization 8) When visualizing a part-to-whole relationship, which graph type is considered to be superior? A) Bar chart B) Pie chart C) Stacked bar chart D) Treemap Answer: D Explanation: Treemaps more readily convey the size of the impact of the data point. Although pie charts may also convey part-to-whole relationships, only a small number of data points are considered appropriate for using a pie chart (i.e., 5 or less). Treemaps are appropriate for more data points. Diff: 1 LO: 7-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization

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9) If you would like to display net income by zip code, which data exploration pattern will best display the data? A) Distribution B) Geospatial C) Nominal Comparison D) Ranking Answer: B Explanation: The Geospatial data exploration pattern is the only pattern that can properly contextualize data in terms of location via mapping. A zip code is a key variable in determining location. Diff: 1 LO: 7-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 10) Which chart type is best used to depict a distribution data exploration pattern? A) Boxplot B) Line and column chart C) Scatter plot D) Stacked column chart Answer: A Explanation: The boxplot is the only data visualization that can most accurately display the range (maximum/minimum) of a data point for the numeric value of a nominal variable. Diff: 1 LO: 7-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization

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11) Which chart type is best used to depict a ranking data exploration pattern? A) Boxplot B) Column chart C) Line and column chart D) Stacked column chart Answer: B Explanation: The column chart is most appropriate because it has the ability to depict the numeric values of nominal variable data in relation to the other. The nominal values can be ordered (i.e., ranked) to provide clarity of the magnitude of each data point. Diff: 1 LO: 7-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization 12) Which chart type is best used to depict a nominal comparison data exploration pattern? A) Column chart B) Pie chart C) Scatterplot D) Stacked column chart Answer: A Explanation: The column chart is most appropriate because it has the ability to depict the numeric values of nominal variable data in relation to the other. Diff: 1 LO: 7-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization

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13) A composite trend data exploration pattern is comprised of a time-series pattern and which other pattern? A) Correlation B) Distribution C) Part-to-Whole D) Ranking Answer: C Explanation: The part-to-whole data exploration pattern represents the composite portion of the pattern. The pattern can show each element that comprises the whole for each time period. Diff: 1 LO: 7-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 14) How many variables are needed to complete a composite trend exploration structure? A) 1 B) 2 C) 3 D) 4 Answer: C Explanation: The necessary variables are: 1) time unit (for the trend), 2) nominal (the variable that determines how the whole will be broken into parts), and 3) numeric (the number that will be broken into parts). Diff: 1 LO: 7-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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15) A Pareto analysis data exploration pattern is comprised of a nominal comparison pattern, a ranking pattern, and which other pattern? A) Correlation B) Deviation C) Distribution D) Part-to-Whole Answer: D Explanation: The Pareto analysis can indicate how much each nominal variable contributes to the total numeric value of each nominal value combined. Diff: 1 LO: 7-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 16) How many variables are needed to complete a Pareto analysis? A) 1 B) 2 C) 3 D) 4 Answer: B Explanation: The necessary variables are: 1) nominal (the variable that determines categories to be analyzed), and 2) numeric (the number that will be broken into parts as well as the associated cumulative values). Diff: 1 LO: 7-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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17) Which chart type is best used to depict a Pareto analysis? A) Boxplot B) Line and column chart C) Scatter plot D) Stacked column chart Answer: B Explanation: The line portion of the line and column chart depicts how each variable element comprises a percentage of the whole (i.e., the cumulative percentage), while the columns represent the numeric values. Diff: 1 LO: 7-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization 18) Which chart type is best used to depict a composite trend? A) Boxplot B) Line and column chart C) Scatter plot D) Stacked column chart Answer: D Explanation: Each column in a stacked column chart may represent a unit of time where each column stack represents the part-to-whole relationship of the data for one specific time period. Diff: 1 LO: 7-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization

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19) Meta, the parent company of Facebook, is confronted with slowing ad revenue and is faced with cutting expenses to meet earnings targets. Salary expenses make up the majority of all expenses. Determine what the best insight to lay off employees is. A) A three-year average of employee performance evaluation scores B) Business unit earnings over the past three years C) Employee performance evaluation scores by business unit D) The most recently-hired employees and their salaries Answer: C Explanation: Filtering data by business unit and then ranking employees by performance evaluation scores allows Meta to target layoffs to the underperforming employees in underperforming business units. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 20) Like many retailers, Victoria Secret is subject to inventory shrinkage (i.e., loss of inventory due to inaccurate inventory records or theft). When attempting to identify inaccurate inventory records (i.e., errors), determine the best question to identify the inaccurate information for a specific stock keeping unit (SKU). A) What is the difference between cost of goods sold inventory and the inventory sub-ledger? B) What is the difference between the inventory sub-ledger and the receiving records? C) What is the total inventory cycle count (multiplied by the wholesale price) versus the inventory total listed in the inventory sub-ledger? The cycle count is conducted by employees. D) What is the total inventory cycle count (multiplied by the wholesale price) versus the inventory total listed in the inventory sub-ledger? The cycle count is conducted by external auditors. Answer: D Explanation: Comparing cycle counts to the inventory sub-ledger by external auditors is the most effective independent means to determining if there are errors. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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21) Bank of America wants to classify its retail customers according to profitability. Which set of variables will create the most coherent set of data relationships? A) Customer and number of banking relationships (i.e., checking/saving account, etc.) B) Customer, number of fees generated (i.e., overdraft), amount of each fee, and collateral-based loans (i.e., mortgage, car) C) Number of banking relationships and number of fees (i.e., overdraft) generated per year D) Yearly fee revenue and number of fees Answer: B Explanation: The customer variable must be known in order to track each individual customer. The number of fees is an indication of revenue. The amount of each fee can be multiplied by number of fees generated by each customer to determine the total fee revenue for a customer. Collateral based loans can be used to find the interest revenue for each customer. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 22) The IRS reports tax return information totals by zip code, household type, and adjusted gross income, as well as other nominal variables. How can the information be best filtered to identify the wealthiest areas of the country? A) Adjusted gross income and number of joint returns B) Number of refunds and number of individuals C) Number of returns filed, amount of refund, and zip code D) Zip code and adjusted gross income Answer: D Explanation: A zip code is synonymous with area, so it should be used to determine location. Adjusted gross income should be used as it is a measure of wealth. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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23) Using the IRS data set below, what questions can be asked using a pivot table?

Zip Code 90210 60653 27114 46410 39111 20053 10003

Number of Number of head Number of Adjusted gross single of household joint returns income (AGI) returns returns 5,020 3,590 400 $6,042,485 1,700 160 70 $21,000 810 160 50 $38,661 570 140 40 $47,561 350 140 40 $48,634 690 560 70 $195,523 900 2,430 130 $5,691,106

A) How many households have dependents in each zip code? B) What is the average number of widowed tax filers in each zip code? C) What is the total number of tax returns filed by zip code? D) Which zip code is an outlier in terms of the number of returns filed? Answer: C Explanation: All the tax filing types are listed for each zip code. All other answer choices do not have complete information in the table to answer the question. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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24) Using the IRS data set below and using Excel pivot, which foundational data relationship best reflects overall adjusted gross income by zip code?

Zip Code 90210 60653 27114 46410 39111 20053 10003

A) Distribution B) Nominal Comparison C) Part-to-Whole D) Ranking Answer: C Explanation: A pivot table can be created to list only adjusted gross income as well as the total. Also, a pivot chart can be used to depict the part-to-whole relationship for each zip code. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 25) Chipotle would like to know which burrito (chicken, steak, barbacoa, sofritas, or carnitas) sells the best in certain regions of the United States. Which foundational data relationship best communicates the results? A) Distribution B) Geospatial C) Nominal Comparison D) Rank Answer: B Explanation: A zip code can be used to represent region (i.e., location). The only data exploration pattern that can explore location is geospatial. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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26) Chipotle would like to know which burrito (chicken, steak, barbacoa, sofritas, or carnitas) should be discontinued based on overall burrito sales. Which foundational data relationship will best determine the lowest-performing burrito? A) Distribution B) Nominal Comparison C) Part-to-Whole D) Rank Answer: D Explanation: To determine performance levels of relation to one another, the burrito sales would have to be ranked highest to lowest. Therefore, the rank data exploration pattern would be necessary. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 27) You are provided with sales information by zip code. Which one of these foundational data relationship techniques should be used to find outliers? A) Deviation B) Geospatial C) Ranking D) Time Series Answer: A Explanation: Since the goal is to find outliers, then deviation should be used to find the zip code that had either very high sales relative to the mean or very low sales relative to the mean. Diff: 2 LO: 7-1 Bloom: K Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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28) Crime statistics are reported in terms of rates for cities. Data is collected by street, neighborhood, and zip code. Many medium-sized cities (i.e., Milwaukee, Memphis, etc.) are characterized as unsafe places as they have extremely high crime rates. What is the best nuanced insight you can ascertain regarding a city's safety if you could access all the crime data? A) A city may be relatively safe as most crime is confined to certain neighborhoods and/or zip codes B) Absolute crime in medium-sized cities is higher than in larger cities C) Crime rate and the absolute amount of crime are not the same things D) The rate of crime suggests that the vast majority of the city is unsafe Answer: A Explanation: Overall city crime rates mask the fact that some neighborhoods or zip codes have much higher or lower crime rates than another part of a city. As such, a city can have an overall high crime rate but still have some relatively safe neighborhoods. Diff: 2 LO: 7-1 Bloom: K Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 29) Chipotle has decided to extend closing hours from 10 pm to 11 pm in certain markets as they believe they can generate more revenue in the extra hour. What data relationships would Chipotle find most relevant to decide on the additional hour of operation insight? A) The availability of staff and the foot traffic between 10 pm and 11 pm in the neighborhood B) The demographic makeup of the surrounding neighborhood and the national competition closing hours C) The foot traffic between 10 pm and 11 pm in the neighborhood and the demographic makeup of the surrounding neighborhood D) The foot traffic between 10 pm and 11 pm on the street, the demographic makeup of the surrounding neighborhood, and the market share of the fast-casual dining experience in the area Answer: D Explanation: This answer has the most relevant information. Foot traffic is important, as is the demographic makeup of the traffic. The ability to compete for late-night diners is also a factor. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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30) Mall operators have discovered that sales go up on certain types of days (excluding holidays). Which foundational data relationship provides a basis for this insight? A) Correlation B) Deviation C) Nominal comparison D) Ranking Answer: A Explanation: Sales data needs to be compared to another no- financial variable. A non-financial variable may be the weather. For example, if it is raining or extremely hot, shopping tends to increase. A rise in tourism is another example of a non-financial measure that affects sales. Diff: 2 LO: 7-1 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 31) In professional service firms such as the Big 4, employee talent represents the key driver of differentiation in generating revenue. As such, tracking headcount is a critical component of maintaining efficient operations. Determine which combination of nominal variable and numeric variable can generate the best insight for a nominal comparison data exploration pattern. A) Employee job category/type and number of full-time equivalent employees B) Number of employees and business service line C) Number of employees and employee job category D) Number of full-time equivalent employees and business service line Answer: A Explanation: Using full-time equivalent employees also captures part-time employees as well as employees that are on leave, and the job category helps further understand the capacity in which employees work. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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32) In an effort to determine if there is discrimination in pay practices amongst racial groups in a Big 4 firm, salaries are compared for each racial group given similar years of experience and the same job title. Determine which data exploration pattern adequately provides insight. A) Correlation B) Deviation C) Distribution D) Nominal Comparison Answer: C Explanation: The distribution of pay by job type captures the range of salaries as well as averages. If the averages of each racial group are very different, as well as the lows and highs of the pay ranges, then there is an indication of a racial wage gap. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 33) A county health clinic is in the process of ordering common infant and child vaccines for the upcoming year. Over the past 3 years, they have run out of vaccines. Determine which data exploration pattern adequately provides insight into a realistic budget for the number of vaccines necessary versus what has previously been ordered. A) Deviation B) Distribution C) Nominal Comparison D) Ranking Answer: A Explanation: By determining the actual vaccines needed versus what was ordered over the past 3 years, the difference (i.e., deviation) can be added to the current year's order to ensure an adequate number of vaccines are available. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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34) A basic payroll audit procedure is to obtain a list of the top 10 highest-paid individuals in an organization and compare those individuals to the organization's human resource database to confirm pay rates and job classifications. Determine which data exploration pattern properly supports the audit procedure. A) Deviation B) Ranking C) Distribution D) Nominal Comparison Answer: B Explanation: By ranking the top 10 employees, the results can be compared to the human resources database. If there are differences, the outcome can identify employee wage theft. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 35) Netflix would like to know if the amount of churn (number of customers that discontinue service during a specified period) is related to net income. What data exploration pattern should be used to determine if these are associated? A) Deviation B) Ranking C) Distribution D) Correlation Answer: D Explanation: The net income dollar amount and churn percentages should be compared during a specific period to understand if they are related. A correlation data pattern would confirm if they were related. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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36) Netflix would like to know how many customers stream its service by region throughout the world and how those totals compare to one another. What data exploration pattern should be used? A) Part-to-Whole B) Ranking C) Distribution D) Nominal Comparison Answer: A Explanation: A nominal variable can be used for the count of customers. A regional analysis can be completed since a regional count will produce a count for the entire company. Therefore, part-to-whole is the best choice. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 37) Netflix would like to know how the amount of churn (number of customers that discontinue service during a specified period) changed over the past 5 years throughout the Midwestern states (i.e., Indiana, Iowa, Illinois, Michigan, Ohio, Wisconsin, and Minnesota). What data exploration pattern should be used to best discover insights? A) Deviation B) Geospatial C) Part-to-Whole D) Time Series Answer: D Explanation: Time period is the key to understanding what the question is asking as opposed to location. Therefore, time series is the correct choice. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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38) Netflix would like to know how the amount of churn (number of customers that discontinue service during a specified period) differs throughout the Midwestern states (i.e., Indiana, Iowa, Illinois, Michigan, Ohio, Wisconsin, and Minnesota). What data exploration pattern should be used to best discover insights? A) Geospatial B) Part-to-Whole C) Ranking D) Time Series Answer: A Explanation: The primary target of the question is the location of the churn; therefore, geospatial is the correct answer to the question, Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 39) The chart below represents monthly iPhone sales (in 000's).

What data exploration pattern/visualization better explores and presents the data to generate insights? A) Geospatial B) Part-to-Whole C) Ranking D) Time Series Answer: D Explanation: Given the pie chart has parts by month, then the date (i.e., the month) would be the driving factor. Therefore, time series would be the best data exploration pattern. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 401

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40) A Five Guys Franchisee has created the below chart to depict the number of adult burgers sold on an average day.

Determine what data exploration pattern/visualization would more aptly display the data to generate insights on the adult burger sales mix. A) Nominal Comparison/bar chart B) Part-to-Whole/pie chart C) Ranking/bar chart D) Time Series/time series line chart Answer: B Explanation: Since the question is targeting adult burgers as the nominal variable to understand the burgers' relation to one another (i.e., the sales mix) the part-to-whole data exploration pattern would work best. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Visualization

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41) The Hilton hotel chain is attempting to understand the profitability of frequent guests (i.e., those guests that log over 75 nights per year). Since there is a large variability in revenue per night due to hotel location, the percentage of net profit per guest per year is used to compensate for variability in location. Some guests tend to ask for additional customer service more than others. Customer service may include everything from extra towels to comped nights due to noise complaints, etc. Excessive customer service lowers the average profitability of the customer even though they spend a large number of nights at Hilton hotels. The data will be used to revoke those customers' frequent stay status so the focus can be on more profitable customers. What data exploration pattern can best identify the least profitable frequent guests? A) Deviation B) Nominal Comparison C) Part-to-Whole D) Ranking Answer: A Explanation: The average profitability can be calculated, and those customers with the lowest profitability percentage deviating from the mean can be flagged for further review to understand if they should be dropped from the loyalty program. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 42) LeBron James is attempting to understand how to best guard Stephen Curry when attempting a 3-point shot. James has acquired Curry's shooting percentage at each location around the 3-point line in 5-foot intervals. What data exploration pattern should be used to let James know which spot he should attempt to run Curry off to lower his 3-point shooting percentage? A) Geospatial B) Nominal Comparison C) Part-to-Whole D) Ranking Answer: D Explanation: By ranking each shooting location, James can target the location with the highest shooting percentage and attempt to stop Curry from shooting in that spot. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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43) The treemap below displays the number of single tax return filers in each region of the country by zip code.

Which data relationship pattern better represents the data if you would like to explore a simple association of the number of single tax filers by zip code? A) Distribution B) Geospatial C) Nominal Comparison D) Part-to-Whole Answer: C Explanation: A basic comparison of the number of filers would be a nominal comparison to explore the relationship. Even though the data is by zip code, the question did not ask for location information. Also, the question did not ask for a comparison of all single filers in relation to one another. As such, a part-to-whole data exploration pattern is not necessary. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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44) Woebegone University has generated the insight that there is a high association between on-time graduation rates and the number of advanced placement (AP) courses taken, regardless of whether the student passed the AP test. Students taking 3 or more AP courses graduated on time at significantly higher rates than those students that did not. What data exploration pattern did the university use to generate this insight? A) Correlation B) Distribution C) Nominal Comparison D) Ranking Answer: A Explanation: Two numeric variables (graduation rate and the number of AP courses taken) are present and can be used to determine if there is an association. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 45) Taco Bell has completed a salary survey to determine if its franchisees are equitably paying its managers. In a sample of salaries of individuals with the same level of experience, it was found that Hispanic women managers were paid 20% less than their White female counterparts. What data exploration pattern did Taco Bell use to generate this insight? A) Correlation B) Distribution C) Nominal Comparison D) Ranking Answer: B Explanation: The distribution pattern can plot averages for groups as well as the range of data points. Given the same level of experience, the average salaries in each racial group should be roughly the same. A 20% difference would indicate one group is not being compensated fairly. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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46) Chipotle would like to know how the sales mix for burritos (steak, chicken, veggie, barbacoa, and carnitas) have changed from 2015 to 2020. What data exploration pattern will best explore the data and provide insights? A) Composite Trend B) Part-to-Whole C) Ranking D) Time Series Answer: A Explanation: There are two types of data involved, Part-to-whole (sales mix data for burritos) as well as a time element (in that sales must be analyzed over 5 years), so the time series data exploration relationship must also be incorporated. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 47) Cook County Hospital (one of the nation's largest trauma centers) would like to know how the mix of its top 5 reasons for visits has changed over the past five years. What data exploration pattern will best explore the data and provide insights? A) Part-to-Whole B) Composite Trend C) Ranking D) Time Series Answer: B Explanation: There are two types of data involved, part-to-whole (emergency room admittance type data) as well as a time element (in that admittances must be analyzed over 5 years), so the time series data exploration relationship must also be incorporated. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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48) Investors would like to track the changes in the components of liabilities and owners' equity section (i.e., short-term debt, long-term debt, common stock, and retained earnings) of Amazon's balance sheet over the past 3 years. What data exploration pattern will best generate insights on the changes in the composition of liabilities and owner's equity? A) Part-to-Whole B) Pareto Analysis C) Composite Trend D) Time Series Answer: C Explanation: There are two types of data involved, Part-to-whole (liabilities and owners' equity section line items that are represented as a percentage of the whole balance sheet section) as well as a time element (i.e., over 3 years), so the time series data exploration relationship must also be incorporated. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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49) The below chart represents the composition of a high school's overall student body by grade classification for the years 2015 through 2018.

What insight can be generated from the graph? A) A smaller senior class does not mean that the graduate rate declines each year B) Students drop out of school entirely prior to senior year C) Students leave the school prior to senior year D) Students transfer prior to senior year Answer: C Explanation: The only inference that can be made by the graph is that students leave. There is no additional information available to discern why students leave. Furthermore, there is not enough information to calculate graduation rates. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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50) Ohio State wants to understand the racial demographic makeup of its freshman class using a single data exploration pattern in terms of the category's relationship to one another as well as the whole. What data exploration pattern will best explore the data and provide insights? A) Nominal Comparison B) Pareto Analysis C) Part-to-Whole D) Ranking Answer: B Explanation: The Pareto analysis incorporates a nominal comparison of each racial category and can rank them as well as show the percentage of each category as it relates to the whole. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 51) The New York City United Way had six donor campaigns during the month of July. The net income of each campaign is known as well as the percentage of net income for each campaign as it relates to the other campaigns. Which data exploration pattern will most effectively depict the amount of giving for each campaign in relation to the other campaigns? What data exploration pattern will best explore the data and provide insights? A) Nominal Comparison B) Pareto Analysis C) Part-to-Whole D) Ranking Answer: B Explanation: The Pareto analysis incorporates a nominal comparison of each campaign's net income and can rank them as well as show the percentage of each campaign as it relates to the whole. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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52) The below chart represents the current assets section of Amazon.com's 2016 balance sheet. Amazon.com 2016 Current Assets Section (in millions) Account Balance Cash and cash equivalents $19,334 Marketable securities $6,647 Inventories $11,461 Accounts receivable, net $8,339 Which data exploration pattern will most effectively depict the relationship of each current asset type to one another as well as their contribution to the total amount of current assets? A) Composite Trend B) Nominal Comparison C) Pareto Analysis D) Ranking Answer: C Explanation: The Pareto analysis incorporates a nominal comparison of each current asset to rank them as well as show the percentage of each current asset as it relates to the whole. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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53) What insight can be generated from the Pareto chart below that depicts the composition of a high school by class?

A) Seniors matriculate through high school at a higher rate than the students in the other classifications. B) Students transferred into the high school as the senior class is larger than the other classes. C) Students transferred out of the sophomore and junior classes. D) The senior class has a higher number of freshmen and students that transferred in as compared to the other classes. Answer: D Explanation: Given the current information, the inference can be made the number of students in previous years (i.e., for seniors) is higher than the freshman, sophomore, and junior classes. The students in the senior class can be comprised of both freshmen and transfer students. There is not enough information to properly address the other 3 answer choices. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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54) The Pareto chart below depicts customer complaints for McDowell's Burgers' four locations for the Month of July 2022. The labor market has been tight for the past 12 months as McDowell's has had difficulty hiring.

Based on the insight ranking complaints by location, what might be the remedy for Location 3? A) Arrange for the training of the manager. B) Fire the manager and replace them. C) Fire the staff and replace them. D) Provide incentive pay to all employees. Answer: D Explanation: Given the economic environment that it is difficult to hire, then firing would not be an option. In employee-driven job market, incentive pay targeted toward lowering complaints would be the best choice. Diff: 2 LO: 7-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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55) Big Box store has generated the insight that employee turnover always spikes in the month of May and is at least 25% higher than any other month. What question should be asked to identify this insight? A) How many employees will Big Box store need to hire in the next year? B) How many people were hired in the past five years? C) What has employee turnover been each month over the past five years? D) What is the amount of turnover during the past year? Answer: C Explanation: The question indicates a time element by stating the month of May and using the term "always" meaning this has happened in the past. As such, the person analyzing the data at Big Box Store would need to find the number of employees that quit monthly over a period of years then make a comparison of each month statistically. Diff: 3 LO: 7-1 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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56) The below chart lists budgeted to actual residence hall occupancy on the campus of MSU.

What conclusion can you draw from the deviation from the budgeted amounts? A) Brody hall revenue expenses will be higher than revenue. B) Holden hall has not met its occupancy projection. C) Overall actual occupancy from a revenue perspective is positive. D) Overall revenue from the 3 residence halls will be under budget. Answer: D Explanation: By taking the total across all 3 revenue halls, total occupancy is less than budgeted occupancy, meaning the revenue projections cannot be met. Diff: 3 LO: 7-2 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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57) The below chart graphs college grade point average (GPA) and high school SAT scores.

What conclusion can be drawn from the scatter plot? A) On average, the students with the lowest SAT scores have the highest grades. B) The highest GPAs are from students with the highest SAT scores. C) The highest SAT score outlier has the highest GPA. D) The student with the highest GPA has a high SAT score. Answer: A Explanation: The scatter plot indicates that the students with the highest GPAs are, on average, the students with the lowest SAT scores. Diff: 3 LO: 7-2 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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58) The below chart graphs salaries by race. All workers are working in the same job and have the same experience level.

What conclusion can be drawn from the plot of salaries? A) Asian workers have outperformed other workers. B) On average, Hispanic workers' salaries are lower than White workers, raising the possibility of discrimination. C) White workers' salaries are lower than Asian workers, raising the possibility of discrimination. D) White workers' salaries are lower than Asian workers' salaries but are within a relevant range. Answer: D Explanation: The plot for the White workers overlaps that of the Asian workers, suggesting the salaries are within the relevant range. There is no evidence for answer choice A. Hispanic workers fall within the relevant range for White workers, so there is no discrimination between those two groups. Diff: 3 LO: 7-2 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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59) The below chart lists BestBuy's dollar amounts of returns for each item in the appliance category over the period 2010 to 2014.

Appliance Type Washing Machine Dryer Microwave Refrigerator Stove Dish Washer Total

2010 $432 $376 $1,210 $2,421 $872 $119 $5,430

Amount of Returns in 000's 2011 2012 2013 $362 $378 $411 $178 $154 $243 $989 $1,315 $876 $1,533 $1,767 $1,892 $834 $672 $758 $211 $258 $192 $4,107 $4,544 $4,372

2014 $532 $212 $1,158 $1,624 $698 $301 $4,525

Which data exploration relationship will best provide insights in which to evaluate the data? A) Composite Trend B) Part-to-Whole C) Ranking D) Time Series Answer: A Explanation: There are two types of data involved, Part-to-whole (appliance category items) as well as a time element (in that returns must be analyzed over 5 years), meaning the time series data exploration relationship must also be incorporated. As such, the composite trend data exploration pattern incorporates both part-to-whole as well as time series data exploration patterns. Diff: 3 LO: 7-3 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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60) Using the table below, BestBuy would like to compare the dollar amount of appliance returns to one another. Appliance Type Washing Machine Dryer Microwave Refrigerator Stove Dish Washer Total

Amount of Return in Cumulative Percentage 000's $432 7.96% $376 6.92% $1,210 22.28% $2,421 44.59% $872 16.06% $119 2.19% $5,430 100%

Which data exploration pattern will most effectively depict appliance returns in relation to each other using both the dollar amount of returns and the cumulative percentage of returns? A) Nominal Comparison B) Pareto Analysis C) Part-to-Whole D) Ranking Answer: B Explanation: The Pareto analysis incorporates a nominal comparison of each appliance and has the ability to rank each appliance as well as use the percentages to convey the dollar amounts as a cumulative percentage as part of the whole. A line and bar chart can be used to depict the results. Diff: 3 LO: 7-3 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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61) The below chart depicts WorstBuy's unit sales according to its three primary categories (kitchen appliances, computers, and electronics). The results are very useful for the supply chain department as the information is used for warehousing and shipping purposes.

What would be a better depiction/data exploration pattern for sales managers paying commissions based on unit sales at the sub-category level? A) Deviation B) Nominal Comparison C) Part-to-Whole D) Ranking Answer: D Explanation: Determining the highest in order of sub-category would be most useful since the number of sales in terms of rank is most helpful to determine which subcategory sold the most units. Diff: 2 LO: 7-2 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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62) You are a data analyst for the Transportation Security Administration (TSA), and management has tasked you with attempting to determine the effectiveness of its airport screening operations at the 10 largest airports in the country over the past three years. Data is collected on the number of passengers screened, passenger wait times, and the number of unauthorized items confiscated (i.e., guns, knives, oversized liquids, exotics plants, etc.). Questions: A. Identify the most appropriate data relationships that can be used to understand how efficient each of the 10 airports is in relation to one another. B. Which foundational data relationship best explores the data relationships identified in question A above? C. What insight can be generated from the data relationship? Answer: A. The average passenger screening time at each airport. B. The Ranking foundational data relationship of airports for the average wait time at each airport. C. The most efficient airports in terms of average screening times will have the lowest wait times. Diff: 2 LO: 7-1 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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63) Airplane Pizza has discovered the insight that pizza sales the three days prior to Thanksgiving are some of the highest sales days of the year. Airplane Pizza analysts believe that consumers are busy cooking Thanksgiving dinner and are cooking less at home in the days leading up to Thanksgiving. Questions: A. What question did Airplane Pizza start with to begin the process of data exploration? B. Identify the most appropriate data relationships that can be used to understand the increase in pizza sales. C. Which foundational data relationship best explores the data relationships identified in question A above? Answer: A. What are the highest days of sales revenue for the year? B. Numeric value--sales revenue; time unit variable--day C. The Ranking foundational data relationship is used to identify the highest days in terms of sales revenue Diff: 2 LO: 7-1 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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64) You are a data analyst for the Transportation Security Administration (TSA), and management has tasked you with attempting to determine the effectiveness of its airport screening operations at the busiest airport in the country (Atlanta Hartsfield) over the past five years. Data is collected on the number of passengers screened, passenger wait times, and the number of unauthorized items confiscated (i.e., guns, knives, oversized liquids, exotics plants, etc.) Questions: A. Identify the most appropriate data relationships that can be used to understand how efficient Atlanta Hartsfield airport has been over the past five years. B. Which data exploration pattern best depicts the data relationships identified in question A above? C. What insight can be generated by the data exploration pattern? Answer: A. The average passenger screening time at the Atlanta airport for each of the five years. The numeric variable is the average wait time, and the time unit variable is the year. B. The time series data exploration pattern has the ability to depict the Atlanta airport's average wait time each year for five years. C. The data exploration pattern can determine if there was any fluctuation in wait times each year. Diff: 2 LO: 7-2 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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65) Walmart shelves run bare at the end of most days for the most popular grocery items. In an effort to keep inventory costs low, minimum inventory quantities are maintained. Budgeted sales and corresponding inventory projections have not been aligned. The resulting insight has been lost sales and rising customer dissatisfaction. Questions: A. What data exploration pattern serves as the basis for this insight? B. Walmart would like to get an idea of how much in the way of sales revenue has been forfeited for its 5 most frequently out-of-stock items. What data and data exploration pattern would need to be used? Answer: A. The deviation data exploration pattern is best used to depict the differences between budgeted and actual amounts. B. The ranking data exploration pattern would need to be used, listing the most out-of-stock items. An estimate of the daily/monthly sales (in units) would need to be known, and the lost unit sales would need to be multiplied by the retail price. Diff: 2 LO: 7-2 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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66) You are the manager for animal intake at Gotham City Animal Shelter. Across the city, on average, over 15,000 animals are dropped off at shelter locations each year. There have been drastic changes during the COVID-19 Pandemic regarding animal intake, fostering, and the adoption of animals. The chart below lists the number of dogs and cats that have been taken in over the past 4 years based on age (baby animals are less than 1 year old, young animals are 1 to 2 years old, adult animals are 2 - 10 years old, and senior animals are over 10 years old).

Baby Young Adult Senior

2018 Cat Dog 1,467 1,376 983 1,209 2,381 2,167 1,211 845 6,042 5,597

2019 Cat Dog 679 1,198 1,821 1,967 1,173 2,002 951 239 4,624 5,406

2020 Cat Dog 767 599 2,101 1,971 1,323 1,481 556 844 4,747 4,895

2021 Cat Dog 611 492 1,356 1,874 2,232 2,567 388 419 4,587 5,352

Questions: A. The shelter executive director would like to know how the mix of dogs (according to age) taken in has changed over the past 4 years. What variables would need to be used? B. Given the variables selected above, what is the data exploration pattern that will most effectively communicate mix of dogs taken into the shelter and why? Answer: A. The nominal variable would be the animal type to identify dogs and the nominal variable age of the dog. The time unit variable year will also need to be incorporated into the data exploration pattern. B. The composite trend data exploration pattern would be most appropriate since it can depict the mix of dogs according to age in a stacked bar chart for each of the past 4 years. Diff: 2 LO: 7-3 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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67) Motor City Chicago Dogs sells 4 different hotdogs (Chicago Style, Vienna Beef, Jumbo, and Corn Dog). Average daily sales are $835, $572, $785, and $332, respectively. The manager of Motor City Chicago Dogs reviewed a single piece of information to decide that Corn Dogs should be dropped as a menu item. Questions: A. What questions did the manager ask to arrive at their decision? B. What data exploration pattern effectively communicates the impact of revenue for each menu item in relation to one another as well as each menu item's cumulative impact on revenue? Answer: A. What is the average daily sales of each hot dog menu item? B. A Pareto analysis has the ability to rank each menu item as well as indicate the impact of each menu item's daily revenue on the total daily revenue. Diff: 2 LO: 7-3 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 68) In the United States' political system, the two primary political parties (Democrat and Republican) have discovered a number of different drivers of candidate success, including the following: prior political experience, current economic climate, prior work experience, and advertising in certain media outlets. All of these factors can be associated with candidate success (i.e., voter turnout). Nevertheless, the top driver of voter turnout on average was targeted advertising. Questions A. What questions did the political parties ask when arriving at the insight that targeted advertising works best? B. Identify the most appropriate data that can be used to understand which variable drives candidate success. C. Which foundational data relationship best explores the data identified in question B above? Answer: A. Which variable is most associated with voter turnout in elections that lead to candidate success (i.e., winning elections)? B. Nominal variable - voters; numeric variable - number of voters for the candidate. The candidate attribute (i.e., prior political experience, prior work experience, advertising dollars spent). C. The correlation foundational data relationship best explores the data between two numeric variables (i.e., voter turnout and advertising dollars spent). Diff: 2 LO: 7-1 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 69) The table below lists items sold by WorstBuy and their corresponding categories. 425

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Item Desktops Dish Washer Laptop Microwave Refrigerator Speakers Stove Tablets Television

Category Computers Kitchen Appliance Computers Kitchen Appliance Kitchen Appliance Electronics Kitchen Appliance Computers Electronics

Units Sold 983 1,209 2,381 1,821 1,967 2,101 1,971 1,356 1,874

Questions A. What data relationship pattern is best used to explore the information if the goal is to compare sales data for each category to one another, and why? B. What chart type is best used for the data relationship pattern identified in part A above, and why? C. What insight can be gained from the data? Answer: A. The part-to-whole data relationship pattern can compare each category to one another. B. The treemap is best used to compare the categories as well as the corresponding sub-categories. C. Answers may vary— 1) Unit sales of kitchen appliances are 75% higher than electronic sales. The demand for appliances is higher due to home purchases or remodeling. 2) The laptop subcategory has the highest unit sales, while the desktop category has the lowest. Consumer preferences have changed to more mobile devices (i.e., laptops and tablets) and moved away from stationary desktops. Diff: 2 LO: 7-2 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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70) American Express charge card holders (charge card balances must be paid in full each month as opposed to credit card balances that do not) are tracked as to the mix of charge types they spend money on each month. Categories of spending include travel, restaurants, retail merchandise, entertainment (concert tickets, subscription services such as HBO Max, Netflix, Hulu, etc.), and household bills (i.e., electricity, gas, water, cable, etc.). American Express uses the composite trend data exploration pattern to track individual consumer spending patterns. Questions A. Over the course of three years, a group of consumers has gone from spending at high-end retailers such as Nordstrom and Saks to spending 20% less and tending to spend at Macy's and Target. What might have happened to this group of consumers? B. During the course of a year, a group of consumers has spent disproportionately on household durable goods such as white goods (i.e., appliances and furniture). What might have happened to this group of consumers, and what might be the spending trend over the next 12 months? C. Over a two-year period, a group of consumers has continued spending at the same levels but has not consistently paid on time and has been 60 days late at least once. What might have happened to this group of consumers? Answer: A. Individuals in the consumer group have experienced a loss of income but are still earning enough to keep spending and paying their bills on time. B. Individuals in the consumer group have purchased new homes or second homes, and after furnishing those in the current year, the subsequent spending will decrease. C. Individuals in the consumer group have experienced a loss in income (possibly a job loss) and are struggling to make ends meet. Diff: 2 LO: 7-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 8 Interpreting Data Analysis Results 1) Data exploration may involve A) identifying data relationships between variables. B) understanding the analysis results. C) interpreting results for making informed decisions. D) assessing the validity of the analysis. Answer: A Explanation: Data exploration may involve identifying data relationships between two variables. Diff: 1 LO: 8-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) Missing relevant data in an analysis is an example of A) potential bias risk. B) potential analysis risk. C) potential data risk. D) potential selection risk. Answer: C Explanation: Missing relevant data in an analysis is an example of potential data risk. Diff: 1 LO: 8-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 3) When interpreting any analysis, you need to determine what knowledge is required to help you understand the results. What accounting knowledge would be required to help interpret a decreasing cash balance? A) Goodwill calculations B) Revenue trends C) Depreciation expense D) Fair market value of land Answer: B Explanation: Cash is affected by revenues. To determine why the cash balance is decreasing, an understanding of revenue is needed. Diff: 2 LO: 8-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 4) When asking the question "Does the analysis address the needs/concerns of the stakeholders?", 428

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we are A) evaluating the reasonableness of the data used. B) evaluating the reasonableness of the results. C) evaluating the reasonableness of the methods used. D) evaluating possible risks. Answer: B Explanation: When asking the question "Does the analysis address the needs/concerns of the stakeholders?", we are evaluating the reasonableness of the results. Diff: 1 LO: 8-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 5) Confirmation bias can exist when A) interpreting the analysis. B) selecting data to support existing beliefs. C) trying to prove a predetermine assumption. D) All of these answer choices are correct. Answer: D Explanation: All of these answer choices are correct. Diff: 1 LO: 8-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 6) A common technique used in diagnostics analyses is A) trend analysis. B) cross tabulation. C) frequency distribution. D) measures of location. Answer: A Explanation: A common technique used in diagnostics analyses is trend analysis. Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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7) When determining sales trends by year for each product category, what valid analyses can be used? A) Crosstab bar chart B) Frequency distribution chart C) Dual axis chart D) Scatterplot chart Answer: A Explanation: When determining sales trends by year for each product category, what valid analyses can be used? Crosstab bar chart Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 8) If gross margin is increasing as sales revenue is increasing, the data relationship is A) perfectly correlated. B) uncorrelated. C) a positive correlation. D) a negative correlation. Answer: C Explanation: If gross margin is increasing as sales revenue is increasing, the data relationship is a positive correlation. Diff: 2 LO: 8-4 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 9) An example of an outlier is A) a high sales total of student textbooks in September. B) a high sales transaction that was recorded as an error. C) a system error in October caused and erroneous sales transactions. D) inventory balances in May were understated due to some recent shipments not being included in the inventory counts. Answer: A Explanation: An example of an outlier is a high sales total of student textbooks in September. Diff: 2 LO: 8-4 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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10) If the correlation coefficient is 0.70 between gas prices and electric vehicle sales, it can be concluded that A) as gas prices decrease, electric vehicle sales will likely increase. B) as gas prices increase, electric vehicle sales will likely increase. C) there is no linear relationship between gas prices and electric vehicle sales. D) there is a weak positive linear relationship between gas prices and electric vehicle sales. Answer: B Explanation: If the correlation coefficient is 0.70 between gas prices and electric vehicle sales, it can be concluded that as gas prices increase, electric vehicle sales will likely increase. Diff: 2 LO: 8-5 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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11) You are interning at Collins Partners, a real estate company specializing in single-family homes. The finance manager has asked you to analyze the sales data to help determine the price of future listings. You use the data analysis descriptive statistics functionality in Excel to analyze the sales prices from all single-family homes. The following statistics were generated: Mean Median Mode Standard Deviation Sample Variance Range Minimum Maximum Count

661,102 705,665 #N/A 113,538 12,890,772,463 305,000 483,280 791,605 10,231

Based on the descriptive statistics, what would your analysis conclude? A) The standard deviation is high. This concludes that the mean of $661,102 is a reliable value for determining the price of future listings. B) The mean and median values show that the prices represented an equal distribution so the median value of $705,665 is a reliable value for determining the price of future listings. C) The data analysis provides enough information to conclude that single-family home should be listed at $661,102 since that is the mean value of the prices. D) The descriptive statistics should not be the only analysis conducted. Additional data analyses that show price trends by date, such as a line chart, can help determine the price of future listings. Answer: D Explanation: The descriptive statistics should not be the only analysis conducted. Additional data analyses that show price trends by date, such as a line chart, can help determine the price of future listings. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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12) Chef's Apron Inc. delivers ingredient and recipe meal kits to customers' homes. Chef's Apron started to see the effects of new competitors. Orders started to decline, and to help control costs, marketing expenses were reduced. Chef's Apron focused its marketing campaigns on customer loyalty programs to help increase the order count of existing customers. The marketing department has asked you as a financial analyst at Chef's Apron to predict net income based on marketing expenses, cost of goods sold (COGS), and the order count. Using the data analysis regression functionality in Excel, the following regression statistics were generated:

Intercept Marketing COGS Order Count

Coefficients 108 (in millions) 1.96 -1.01 2.31

P-value 0.50 0.56 0.46 0.96

Using the regression statistics output, predict what the net income will be if marketing expenses are $100 million, COGS is $350 million, and the order count is 8 million. How reliable is this prediction? A) There is a net loss predicted to be at $31 million. This prediction is not reliable since the p-value of the independent variables are greater than 0.05. B) There is a net loss predicted to be at $31 million. This prediction is reliable since the p-value of the independent variables are close to 0.05. C) There is a net income predicted to be at $31 million. This prediction is not reliable since the p-value of the independent variables are greater than 0.05. D) There is a net income predicted to be at $31 million. This prediction is reliable since the p-value of the independent variables are close to 0.05. Answer: A Explanation: There is a net loss predicted to be at $31 million (108 + 1.96 * 100 -1.01 * 350 + 2.31 * 8). This prediction is not reliable since the p-value of the independent variables are greater than 0.05. Diff: 2 LO: 8-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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13) Fuel is one of the largest expenses for Blair Airlines. In recent years, fuel prices have been fluctuating. In the years that fuel prices declined, salary expenses became higher than fuel expenses. Blair Airlines would like to predict operating income and provided you with the average fuel price per gallon, salary expenses, and operating income values for the last 10 years. Using the data analysis regression functionality in Excel, the following regression statistics were generated: Regression Statistics Multiple R 0.485 R Square 0.235 Adjusted R Square 0.017 Standard Error 3294.45 Observations 10 ANOVA df Regression Residual Total

SS MS 2 23415503.15 11707751.57 7 75973818.45 10853402.64 9 99389321.60

Coefficients Intercept -17048.380 Salaries 1.480 Fuel Price per Gallon 1974.094

Standard Error 13839.417 1.011 2170.136

F 1.078

t Stat -1.231 1.464 0.909

Significance F 0.390

P-value 0.257 0.186 0.393

Based on the regression analysis, what should your consulting report conclude? A) The fuel price per gallon and salary expenses are reliable variables in predicting operating income. B) As the fuel prices increase, the operating income decrease. As salary expenses increase, operating income decrease. C) The analysis shows that additional variables need to be included in the regression model to better predict operating income. Additional variables could include other cost drivers such as airport landing fees and aircraft maintenance expenses. D) The Significance F value is high which means that the number of observations is too low. Blair Airlines should provide the average fuel price per gallon, salary expenses, and operating income values for more years to make the regression model more reliable. Answer: C Explanation: The analysis shows that additional variables need to be included in the regression model to better predict operating income. Additional variables could include other cost drivers such as airport landing fees and aircraft maintenance expenses. Diff: 2 LO: 8-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 14) Bellingham's is a retailer of consumer goods. Due to changing customer-purchasing behavior 434

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and increasing competition, Bellingham's has closed stores across the country. Bellingham's would like to determine which stores should be closed. Which activity would be included in exploring the data? A) Determine the relationship of the yearly revenue and the average age of customers for each location. B) Determine the relationship of the yearly revenue and the square footage of the retail space for each location. C) Determine the relationship of the yearly salary expenses and the number of store associates for each location. D) Determine the relationship of cash purchases and credit card purchases for each location. Answer: B Explanation: Data exploration involves validating current beliefs about data relationships. The yearly revenue will be dependent on the size of the retail space. These two data elements determine profitability. which will help determine which location should be closed. Diff: 3 LO: 8-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 15) Broadview Tax Partners is a large tax firm who specializes in small business tax preparation. For the new tax season, they sent a letter to their clients stating that the IRS will be focusing its audits on small business enterprises. To reduce potential liability to the firm, Broadview Tax Partners would like to analyze their clients' tax data to reduce potential tax fraud committed by their clients. What data exploration should Broadview Tax Partners conduct in this data analysis? A) Review deductions to ensure that it is aligned with benchmarks for the industry. B) Determine if there is a relationship between the client's home address and employees' home address. C) Determine if there is a relationship between salary expenses and the number of the employees. D) All of these answer choices are correct. Answer: D Explanation: Data exploration involves raising vital questions regarding data relationships. All of these data relationship will help assess potential fraud. Diff: 3 LO: 8-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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16) Blue Steel Motors is an automaker of gasoline-based engines. It recently introduced electric vehicles into their product offerings. As a result, determining inventory value for raw materials, work-in-process, and finished goods is a complex valuation process since some of its inventory is obsolete or has lost market value. GAAP requires that inventory is reported as the lesser of cost or net realizable value. Analyses were conducted to valuate the inventory. What question should be asked when interpreting the results of the inventory valuation analyses? A) Were inventory counts conducted accurately? B) Was the classification of the work-in-process and finished goods assessed correctly? C) Does it make sense that the market value of raw materials is lower than the historic cost? D) Can the market value be used as a substitute for the net realizable value of raw materials? Answer: C Explanation: Interpreting data analysis includes asking if the analysis make sense. Since raw materials are going obsolete, it makes sense that the market value of the raw materials is lower than the historic cost. Diff: 2 LO: 8-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 17) Supermart is a US retailer who entered the Brazil market in 1990. The company's profits grow over the years but have recently posted operating losses. Supermart made poor decisions on store locations and experienced challenges in dealing with labor tensions, economic recession, and political instability. Supermart based its expansion strategy in Brazil using profitability projections. When interpreting the profitability projections, what questions should have been asked? A) How reliable are the profitability projections given the environmental factors of conducting business in Brazil? B) Does Brazil's fluctuating currency have a relationship with revenue projections? C) Should monthly sales impact future revenue projections? D) How important is understanding inventory turnover when forecasting revenue projections? Answer: A Explanation: Interpreting data analysis includes asking if the results of the analysis are reliable. The profitability projections were not reliable since there are other non-financial factors that would influence the projections. Diff: 2 LO: 8-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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18) In the restaurant industry, spoilage is a major expense. Large restaurant chains have refined their supply chain processes to minimize spoilage. They use just-in-time inventory systems to keep inventory as low as possible. To determine if the spoilage rate is increasing or decreasing, what questions could be asked in the data exploration? A) Is there a data relationship between cost of goods sold and average inventory values? B) Is using the inventory turnover ratio the correct data in determining spoilage rates? C) Is calculating the inventory turnover ratio an appropriate method for analyzing the data? D) Will calculating the inventory turnover ratio at random restaurant locations generate a reliable analysis result. Answer: A Explanation: Data exploration involves validating current beliefs about data relationships. Understanding cost of goods sold and average inventory values helps assess inventory turnovers, and thus, helps determine spoilage. Diff: 2 LO: 8-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 19) Bond Motors introduces a new generation of cars every four to five years. Contribution margin is a critical measure of cost efficiency and overall profitability for each generation. The cost accounting department has been asked to analyze the contribution margin between the new generation and older generations. A bar chart has been provided to show a visualization of the contribution margin for the last five generations. Which of the following statements represents data analysis interpretation? A) The results of the analysis are reliable since the data used in the analysis was correct and complete. B) Given that raw material prices have been decreasing, it makes sense that the contribution margin is increasing. C) The bar chart showing the contribution margin trend answers management's question of whether contribution margin is increasing or not. D) All of these answer choices are correct. Answer: D Explanation: Data interpretation involves determining if the analysis results are reliable, makes sense, and answers the original question or purpose of the analysis. Diff: 3 LO: 8-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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20) Bayview Hospital, a privately owned entity, is investigating the impacts of changing the depreciation method of their medical equipment. They currently use the straight-line method of depreciation but wants to determine the impacts if the depreciation method was changed to double declining balance. The change in depreciation method would be a better reflection of the matching principle. The stakeholders of the data analysis have been identified. How would you rank the stakeholders in order of importance from highest to lowest? A) Hospital healthcare staff, chief financial officer, procurement staff, tax authorities B) Chief financial officer, tax authorities, procurement staff, hospital healthcare staff C) Procurement staff, chief financial officer, tax authorities, hospital healthcare staff D) Tax authorities, hospital healthcare staff, chief financial officer, procurement staff Answer: B Explanation: Successfully interpreting data analyses requires thinking critically about which stakeholders are impacted in data analysis projects. The results of the analysis will impact the chief financial officer and the changes in the depreciation expense will impact tax obligations. Diff: 3 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 21) Throughout the data analysis process, stakeholder engagement can occur at different times. Assessing when a stakeholder should be engaged and managing their expectations can determine if the data analytics project is a success or a failure. If a data analysis project is required to forecast future cash balances, which statement is an example of engaging a stakeholder at an appropriate time? A) Engage with the bank to extract bank records during the interpretation stage of the data analysis. B) Engage with customers when defining the purpose of forecasting future cash balances. C) Engage with the chief financial officer during the process of cleaning, transforming, and loading of data into the analysis's tools. D) Engage with the financial controller when interpreting and communicating results of the analysis. Answer: D Explanation: Successfully interpreting data analyses requires thinking critically about which stakeholders are impacted in data analysis projects. The financial controller will be interested and impacted in the results of the analysis. Diff: 2 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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22) TourCell launched a new smartphone. There were 96 reports of overheating and fire in the first two months of the product launch. TourCell was forced to recall 2 million units. The quality of components making up the smartphone will come at a cost, as high-quality components will be more expensive. The cost accounting department and the engineering department has asked you to develop product quality and financial models for their next product line. Which statement would reflect the purpose of the data analysis? A) The purpose of the data analysis is to increase profitability by reducing cost of goods sold. B) The purpose of the data analysis is to minimize product recalls and product returns. C) The purpose of the data analysis is to determine how to minimize costs while maximizing product quality. D) The purpose of the data analysis is to increase the reputation of the company by launching quality products. Answer: C Explanation: The purpose of the analysis has been defined by the cost accounting department and the engineering department. They would like to understand how costs can be minimized while maximizing product quality. Diff: 2 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 23) The Los Angeles Department of Transportation first introduced a fleet of electric powered buses in 2017. Electric buses are a huge capital investment and data analysis is required to assess the return on investment. Which additional knowledge areas will need to be obtained to successfully carry out this data analysis project? A) Governmental funding through the Federal Transportation Improvement Program and knowledge in the electric vehicle industry B) Accounting standards defined by the Federal Accounting Standards Advisory Board (FASAB) C) Federal and California state tax laws D) Demographics and climate change trends in Los Angeles County Answer: A Explanation: You may not have the correct background or experience to understand the data required for the analysis or to interpret the results. Therefore, you must acquire the appropriate knowledge. Knowledge in government funding and electric vehicle pricing is needed in calculating the return on investment. Diff: 2 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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24) The bookselling industry has been undergoing major transformations from print to digital. Revenue projection reports are a key influencer in maintaining and attracting investors. You are reviewing the most recent revenue projection report before it is released to investors. Which of the following questions relate to a potential data risk that may impact the interpretation of the revenue projection? A) Does the analysis include all sales returns and allowances? B) Does the analysis include revenue from the most recent reporting period? C) Does the analysis include all sales that are based on cash/credit and gift card redemptions? D) All of these answer choices are data bias risks. Answer: D Explanation: The company is bias in wanting to optimize revenue projection in order to attract investors. Based on the revenue recognition principle, all these data elements should be included in the analysis, Diff: 3 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 25) CoffeeStart is a global chain of coffee houses. CoffeeStart continues to adapt its corporate strategy based on changing consumer habits and market conditions. For many years, CoffeeStart has aggressively opened new locations around the world. Today, CoffeeStart announced it will close a number of locations. Selecting which store location to close can be based on many data factors. Which of the following is a correct statement when assessing alternative ways to conduct the analysis? A) Data trends expenses such as salaries and retail-leasing costs should drive the decision for location closures. B) The analysis can be enhanced by analyzing changing population densities of each location. C) Analyzing trends in operating expenses for each store is sufficient in determining location closures. D) Analyzing gross revenue trends for each store is sufficient in determining location closures. Answer: B Explanation: Thinking critically about alternative ways to conduct the analysis is part of the SPARKS framework. Since selecting which store location to close can be based on many data factors. Analyzing changing population densities will provide additional insights to the analysis. Diff: 2 LO: 8-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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26) The chief information officer (CIO) has asked you to analyze unauthorized login attempts into your company's financial system. Your audit analysis shows that 8% of the login attempts were unauthorized. The CIO appreciated that you were able to quickly report this data but there are additional questions that you were not able to answer. Which of the following is a question you may consider during the self-reflection phase of SPARKS critical thinking? A) If the CIO asks for a similar report, can I use the same data set to provide additional insights such as the time distribution of the unauthorized login attempts? B) What knowledge do I need to have about login attempts in order to conduct this analysis? C) Other than the CIO, who may review this analysis for decision making? D) What is the true purpose of my analysis of unauthorized login attempts? Answer: A Explanation: Self-reflection involves using the lessons learned from current data analysis that you are performing or interpreting and applying that to future data analysis projects. Diff: 2 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 27) Many companies use bonuses based on sales performance to motivate its sales representatives. The chief financial officer has asked you to analyze the data for calculating bonuses for each sales representative. The bonus calculation is based on individual sales performance for the last fiscal year. Which of the following data used in the analysis is reasonable given the purpose of the analysis? A) Net sales and estimated sales returns were used to calculate true sales performance for each sales representative. B) Gross sales from the last quarter were used since it reflects the most recent sales performance. C) The top three sales transactions for each sales representative were used since it is a good indicator of sales performance. D) Gross sales from the last fiscal year and potential sales leads for the next quarter were used. Answer: A Explanation: It is reasonable to include estimated sales returns in the analysis since sales representatives may artificially inflate their sales by arranging with customers to returned purchases after the bonus payout. Diff: 2 LO: 8-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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28) Catch-A-Ride provides a marketplace to connect riders and drivers. Catch-A-Ride is recruiting more drivers to meet the growing demand. You are asked to provide an analysis of which geographic locations the recruitment efforts should target. What analysis method would be most reasonable given the purpose of the analysis? A) You can use a bar chart showing monthly sales trends for each geographic area. B) You can use a geographic heat map showing the intensity of the number of trips for each geographic area. C) You can base your analysis on the population growth trend for each geographic area. D) You can use the total number of drivers that your main competitor has and recruit the same number of drivers for that geographic area. Answer: A Explanation: A geographic heat map showing the intensity of the number of trips provide a visual summary of where to focus recruiting efforts. The method is reasonable since the purchase of the analysis is to determine locations to recruit new drivers. Diff: 2 LO: 8-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 29) ElectroCity is a retailer with physical retail locations and a growing online shopping presence. At the end of each fiscal year, sales returns and allowances need to be estimated to adhere to the revenue recognition principle. Analysis is required to estimate sales returns and allowances for in store sales and online sales. The results of the data analysis show that in store sales have a higher returns percentage compared to online sales. Are the results reasonable given your knowledge of returns? A) Yes, the results are reasonable. Since online products are priced with more sales discounts, it is reasonable to assume that returns percentage for online sales will be lower. B) Yes, the results are reasonable since the returns percentage is just an estimate, so it is hard to accurately predict the returns percentage. C) No, the results are not reasonable since customers are not able to test the products beforehand so online sales should have a higher returns percentage. More analysis should be conducted to validate the accuracy of the result. D) No, the results are not reasonable since the returns percentage should be the same regardless of whether the purchase was made at the store or made online. Answer: C Explanation: The results need to be reasonable given your knowledge of returns of in store sales versus online sales. It is reasonable to think that there will be more returns of online sales since the products may not meet the requirements of the customer since customers were not able to test the products. Diff: 2 LO: 8-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 442

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30) Big Lot Autos is a used vehicle dealership. They would like to identify sales trends by monthly total sales. The following scatterplot of individual sales transactions was created for the analysis:

What conclusions can you make about the use of a scatterplot for this purpose? A) A scatterplot is an appropriate visualization to use since monthly total sales trends can easily be determined. B) A scatterplot is an appropriate visualization to use since high value sales transactions can easily be determined. C) A scatterplot is not an appropriate visualization to use since monthly total sales cannot easily be determined. D) A scatterplot is not an appropriate visualization since showing the high value sales transactions will skew the results. Answer: C Explanation: Scatterplots are used to find anomalies and to examine relationships in the data, so it is not a good visualization for identifying sales patterns. A bar chart would be a better visualization to use. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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31) Greenfields Incorporated focuses heavily on research and development (R&D) to create sustainable food products. R&D spending has led to several patents and these patents will protect their product inventions. Greenfields is looking to attract investors to help fund their R&D. Investors would like to see a return on their investment. A report was prepared for potential investors and it concluded that to double the number of patents over the next five years, R&D spending needs to be increased by 20% each year. Given this conclusion, did the results of the analysis address the needs and concerns of the potential investors? A) No, the investors are looking for a return on their investment, so more analysis is required to project revenue of new products created by the R&D efforts. B) No, the investors are more concerned about the value of the patents because that will determine their return on investment. C) Yes, the investors' needs are met since they are concerned about how R&D will generate more patents. D) Yes, the investors' needs are met since they are concerned about controlling R&D spending for the company. Answer: A Explanation: The report provided useful analyses but failed to address investors' need of determining a financial return on their investment. Therefore, more analysis is needed to project revenue associated with new products created by R&D efforts. Diff: 3 LO: 8-3 Bloom: AP Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 32) You are an independent auditor for Electrobuds Incorporated. The financial controller told you that warranty expenses have been declining for the last three years. You see that investments were made to the quality assurance department and conclude that the warranty expense decreases make sense. Your task is to provide assurance that the warranty expense is correct for the audit report. What approach can help you avoid confirmation bias? A) Try to prove that your assumptions are incorrect, so look for warranty transactions that may not have been reported. B) Have another member of your audit team review the results of your analysis to ensure the approach is appropriate and that your conclusions are reasonable. C) Review industry reports to see if there are any product recalls and review consumer reports of the company's products. D) All of these answer choices are correct. Answer: D Explanation: All of these answers are approaches to avoid confirmation bias since they look at the analysis at another perspective. Diff: 2 LO: 8-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 444

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33) Travel-related expenses is a major expense for accounting firms and effects their overall bottom line. According to a report from Accounting Today, business travel expense fraud is estimated to cost US companies $19 billion annually. Since the publication of the report, you are asked to analyze the travel expense claims for potential fraud. What approach can help limit selection bias in your data analysis? A) Download all transactions for the top three consultants and validate their receipts can back up the three expense reports. B) Download all transactions related to the average travel cost per day and see if the expense reports are in line with the daily average. C) Download all transactions related to a cash transaction such as parking and tipping. D) Download all transactions from the employee's company credit card statement and compare the expense reports against the credit card charges. Answer: D Explanation: Selection bias can be limited if all transactions are analyzed instead of sampling selected data. Because credit card transactions are electronic, the entire data set can be quickly validated. Diff: 3 LO: 8-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 34) In 2020, Turbo Cellular introduced four smartphone products. The VP of Manufacturing would like to determine the number of units sold for each model so that manufacturing efforts can be allocated to each model appropriately. You are asked to provide an analysis of sales data. What type of analysis would be the most appropriate to provide? A) A crosstab analysis showing the number of units sold for each model in each fiscal quarter B) A crosstab analysis showing the total revenue for each model in each fiscal quarter C) A scatterplot analysis showing the sales transaction dates on the x-axis and the number of models sold on the y-axis D) A frequency distribution analysis showing the relative frequency as a percentage for each model Answer: A Explanation: The crosstab analysis showing the number of units sold for each model by each fiscal year will help predict future manufacturing needs for each model. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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35) During the COVID pandemic in 2020, as restaurants were struggling financially, some delivery companies offered to reduce commissions for some restaurants. You would like to understand how different commission rates affected revenues. What analysis should be used to understand this relationship? A) A histogram analysis showing the commission rate on the x-axis and the order count on the y-axis B) A scatterplot analysis showing the commission rate on the x-axis and the order count on the y-axis C) A crosstab analysis showing the total revenue for each commission rate D) A what-if analysis to determine what commission rate to use to maximize revenue Answer: C Explanation: The crosstab analysis showing the total revenue for each commission rate will help determine if commission rates affect revenues. Diff: 3 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 36) Avenue Travel is a travel reservation website using Adclicks, a pay-per-click advertising system where companies pay a fee for each time their ad is clicked from an internet search result. Knowing that travel reservations is cyclical in nature, they would like to understand which times during the year should Adclicks be used to generate the most clicks. Which is the best chart to analyze this data? A) A pie chart showing each slice representing the total number of clicks in that month B) A frequency distribution chart showing each day of the year on the x-axis and the number of clicks on the y-axis C) A scatterplot chart showing each month on the x-axis and the total revenue on the y-axis D) A bar chart showing each month on the x-axis and the average monthly revenue on the y-axis Answer: B Explanation: The frequency distribution chart provides a quick visualization of which periods in the year represent the most ads clicks. The chart may also reveal if there are patterns at various times of the year. Diff: 3 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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37) Southern Seas has a chain of 150 restaurants worldwide. They would like to analyze the performance at each location. One performance measurement is to analyze the total revenue and the total waitstaff at each location. This information can be used to reward the highest performing stores and identify which lower performing stores require improvement. What is a valid statement regarding this data analysis? A) A scatterplot chart showing the relationship between total revenue and total waitstaff by location can easily show the highest and lowest performing locations. B) Performing a correlation coefficient analysis between the number of waitstaff and total revenues can easily show the highest and lowest performing locations. C) The locations with the lowest revenue and highest revenue should be considered as anomalies, so they should be removed from the analysis and investigated for accuracy. D) The locations with the lowest revenue and highest revenue should be considered as outliers, so they should be removed from the analysis and investigated for accuracy. Answer: A Explanation: The scatterplot chart will show which location is the most profitable with the least number of waitstaff and least profitable with the greatest number of waitstaff. Performance of each store can be visualized through the scatterplot chart. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 38) In 2020, the National Retail Association reported that 5.9% of returns are fraudulent. This report has prompted you, a risk analyst, to analyze the returns data for fraud for your retail company. The data will be used to implement a real-time fraud detection system to prevent potential fraud as returns are being processed. What data relationship can be used for this analysis? A) Your analysis can show the relationship of the number of fraudulent returns and the number of returns without a receipt to see if there is a strong correlation. B) Your analysis can show the relationship of the number of fraudulent returns and certain types of products to see if there is a strong correlation. C) Your analysis can show the relationship of the number of fraudulent returns at particular times of the day, for example, around closing time, to see if there is a strong correlation. D) All of the answer choices are correct. Answer: D Explanation: All of these data relationships can be analyzed to determine if there is a strong correlation. When the return transactions are being processed, the transaction can be flagged for potential fraud if these conditions have a strong correlation. Diff: 2 LO: 8-4 Bloom: S Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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39) What statement is true regarding anomalies and outliers in the sales transaction data? A) The fraudulent sales transactions are considered data anomalies since they are illegitimate transactions. B) The fraudulent sales transactions are considered data anomalies since they are unusual occurrences that should not be expected. C) The sales transactions of extremely high amounts compared to the mean sales transaction amount can be considered as data outliers and should be flagged as potential fraud transactions. D) The sales transactions of extremely high amounts compared to the mean sales transaction amount can be considered as data outliers since they are unusual occurrences that are not expected to occur again. Answer: C Explanation: Sales transactions of extremely high amounts can be considered as outliers. If there are sales returns on these high sales transactions, an investigation for fraud may be considered due to their high financial risk. Diff: 2 LO: 8-4 Bloom: AN Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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40) General Foods manufactures consumer foods and has steady revenue growth. For investors with the low-risk tolerances, a slow and steady growth rate provides greater comfort and security. You identify as a low-risk investor and would like to analyze General Foods stock for price volatility. You obtained General Foods stock prices from 2010 to 2019 and generated the following descriptive statistics in Excel: Mean Median Mode Standard Deviation Sample Variance Range Minimum Maximum

48.82 50.42 50.42 9.07 82.28 37.69 34.20 71.89

What conclusion would you make regarding the volatility of the General Foods stock price? A) The standard deviation is high indicating high volatility in the stock price over the last 10 years. B) The standard deviation is low indicating low volatility in the stock price over the last 10 years. C) The maximum price in the descriptive statistics show the stock price potential and is an indication of a low-risk investment. D) The mean and median values are very similar, and this indicates low volatility in the stock price over the last 10 years. Answer: B Explanation: Since the standard deviation is low compared to the mean, the stock price distribution is very close to the mean. Therefore, there is low volatility in the stock price. Diff: 3 LO: 8-4 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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41) OfficeBuy is an online retailer of office furniture. As an inventory analyst, you are asked to analyze the historic sales of OfficeBuy's best-selling office desk. The historic sales data will be used to help predict future sales. You extracted the sales units of the office desk for 3 years and use the descriptive statistics in Excel to generate the following results: Mean Median Mode Standard Deviation Sample Variance Range Minimum Maximum

1,435.39 580.25 499.00 2,226.49 4957256.21 7,301.00 299.00 7,600.00

What conclusion can you make from the descriptive statistics? A) OfficeBuy should carry a monthly stock of around 1434 of its best-selling chairs since it's the average monthly sales. B) Since the standard deviation is higher compared to the median, we can conclude that more data should be used in the analysis to make the results more reliable. C) Since the mean is significantly higher than the median, there may be outliers in the monthly sales data that may skew the demand planning results. D) Since the mode and median values are relatively similar, OfficeBuy should carry a monthly stock of its best-selling office desk that is between the mode and median values. Answer: C Explanation: Since the mean is significantly higher than the median, there may be outliers in the monthly sales data that may skew the demand planning results. More analysis would be needed to determine the cause of the outliers. The demand planning analysis should determine to how handle these outliers. Diff: 3 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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42) The Bread Factory was founded as a bakery with a vast selection of food items. Menu items are continuously changing as food trends and customer preferences evolve over time. The demand for menu items will determine if the items will be dropped or continued. What is the best analysis to use to show the historic demand for menu items over a period of time? A) A frequency distribution B) A trend analysis C) A linear regression D) A linear optimization Answer: B Explanation: A trend analysis of the historic demand of menu items will determine which items have less demand over a period of time. Diff: 1 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 43) Hudson's Luxury Motors' management would like to determine if their salespeople are meeting their sales goals. A line graph has been provided to show the monthly sales for each salesperson. The line graph shows spikes in sales for certain months and drops in sales for other months. What analysis should be used to provide a better understanding of each salesperson's performance trend throughout the year? A) A crosstab analysis should be used instead of a line graph analysis. B) The descriptive statistics of mean and median should accompany the line graph analysis. C) A correlation analysis should accompany the line graph analysis. D) Trend lines should be added to the line graph to show the slope of the sales trend throughout the year. Answer: D Explanation: Trend lines can be used to smooth out the fluctuation in the sales months so the trend of each salesperson can be compared. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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44) The S&P 500 is a stock market index that measures the stock performance of 500 of the largest companies listed on US stock exchanges. Investors will often perform correlation analysis to compare the S&P 500's performance against their own investment portfolio to determine if they are making good investment selections. Which statement would be correct regarding the correlation coefficient? A) A correlation coefficient of 0.8 would indicate that your investment profile is performing at a higher rate than the S&P 500. B) A correlation coefficient of -0.3 would indicate that there is little relationship between your investment profile and the S&P 500. C) A correlation coefficient of 0.8 would indicate that your investment portfolio's performance is in line with the S&P 500's performance. D) A correlation coefficient of -0.3 would indicate that both your investment portfolio and the S&P 500 are both decreasing, Answer: C Explanation: A correlation coefficient of 0.8 indicates a strong linear relationship. So as the S&P 500 increases, your investment portfolio also increases. Diff: 3 LO: 8-4 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 45) The COVID pandemic has made it extremely difficult for customers to pay their bills. As a result, telecom companies have reported higher bad debt expense compared to previous years. Better Mobile would like to design a linear regression model to predict bad debt expense. Which variables can be used in the linear regression model to increase the reliability of the results? A) Sales and net income B) Accounts receivable and accounts payable C) Sales and accounts receivable D) Sales and accounts payable Answer: C Explanation: Bad Debts can be estimated using a percentage of sales or a percentage of accounts receivables so these variables should be included in the linear regression model. Diff: 2 LO: 8-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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46) Supermart is a retailer and has locations across the country. Salaries of sales associates varies across the country. Salary expenses can be predicted using a linear regression model. Which variables can be used in the linear regression model to increase the reliability of the results? A) Total revenue, state taxes, and minimum wage laws in each state B) Total revenue, interest expense, and minimum wage laws in each state C) Net income, cost of good sold, and total operating expense D) Total revenue, total number of retail locations, and minimum wage laws in each state Answer: D Explanation: As total revenue increases, salary expenses are likely to increase to support higher sales volumes. As the number of retail location increases, there will be a greater need to hire more sales associates. As the minimum wage rises, Supermart's hourly wage needs to increase as well. All of these variables should affect salary expenses, so they should be included in the linear regression model. Diff: 3 LO: 8-5 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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454) Fuel is one of the largest expenses for airline companies. In recent years, fuel prices have beenfluctuating. In the years that fuel prices declined, salary expenses became higher than fuel expenses. FleetAir would like to predict operating income and provided you with the average fuel price per gallon, salary expenses, and operating income values for the last 10 years. Using the data analysis regression functionality in Excel, the following regression statistics were generated: Regression Statistics Multiple R 0.485 R Square 0.235 Adjusted R Square 0.017 Standard Error 3294.45 Observations 10 Based on the R square value of the regression analysis, what can you conclude? A) The regression line has a good fit to the data and the regression model is highly reliable. B) Operating income is not dependent on the variables used in the regression model. C) 23.5% of the operating income can be explained by the average fuel price and salary expense values. D) The regression model for predicting operating income is 48.5% reliable. Answer: C Explanation: The R Square value is low, which means that the regression line does not have a good fit to the data. Only 23.5% of the operating income can be explained by the average fuel price and salary expense values. Diff: 2 LO: 8-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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455) Fuel is one of the largest expenses for airline companies. In recent years, fuel prices have beenfluctuating. In the years that fuel prices declined, salary expenses became higher than fuel expenses. FleetAir would like to predict operating income and provided you with the average fuel price per gallon, salary expenses, and operating income values for the last 10 years. Using the data analysis regression functionality in Excel, the following regression statistics were generated: Regression Statistics Multiple R 0.485 R Square 0.235 Adjusted R Square 0.017 Standard Error 3294.45 Observations 10 Based on the standard error value of the regression analysis, what can you conclude? A) The standard error is low, meaning that the data is clustered close to the regression line. B) The standard error is high, meaning that the data is clustered close to the regression line. C) It is not possible to determine if the standard error is high or low since the standard deviation of the operating income is not provided. D) It is not possible to determine if the standard error is high or low since the standard deviation of the average fuel price per gallon and the salary expense values are not provided. Answer: C Explanation: To determine if the standard error is high or low, the standard deviation of the dependent variable, operating income, should be compared against the standard error. If the standard deviation is higher than the standard error, the standard error would be considered small. Diff: 3 LO: 8-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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456) Skyward Airlines would like to create a regression model to predict cash. The variables used inthe regression model include values of cash, total revenue, cash flow from operations, cash flow from investing and cash flow from financing for the last 8 years. Using the data analysis regressionfunctionality in Excel, the following regression statistics were generated: Regression Statistics Multiple R 0.963904 R Square 0.929112 Adjusted R Square 0.834594 Standard Error 257.2307 (in millions) Observations 8 Based on the R square value of the regression analysis, what can you conclude? A) The regression line does not have a good fit to the data since only 7% of cash can be explained by the total revenue, cash flow from operations, cash flow from investing and cash flow from financing. B) The regression line has a good fit to the data since 93% of cash can be explained by the total revenue, cash flow from operations, cash flow from investing and cash flow from financing. C) The R square value is close to 1, which means that the independent variables are not a good predictor of cash. D) The R square value is less than 1, which means that the independent variables do not affect cash values. Answer: B Explanation: The R Square value is close to one, so the regression line has a good fit to the data. 93% of cash can be explained by the total revenue, cash flow from operations, cash flow from investing and cash flow from financing. Diff: 2 LO: 8-5 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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457) Skyward Airlines would like to create a regression model to predict cash. The variables used inthe regression model include values of cash, total revenue, cash flow from operations, cash flow from investing and cash flow from financing for the last 8 years. Using the data analysis regressionfunctionality in Excel, the following regression statistics were generated: Regression Statistics Multiple R 0.963904 R Square 0.929112 Adjusted R Square 0.834594 Standard Error 257.2307 (in millions) Observations 8 In addition, the descriptive statistic generated the following for the cash values: Cash (in millions) Mean Standard Error Median Standard Deviation Sample Variance

1099.75 223.6158816 1022.5 632.481225 400032.5

Based on the standard error value of the regression analysis, what can you conclude? A) The standard error is low, meaning that the data is clustered close to the regression line. B) The standard error is low, meaning that the data is not clustered close to the regression line. C) The standard error is high, meaning that the data is clustered close to the regression line. D) The standard error is high, meaning that the data is not clustered close to the regression line. Answer: A Explanation: The standard error is low since the standard deviation is higher than the standard error. A low standard error means that the data is clustered close to the regression line. The F value is not used to determine reliability of the independent variables. Instead, to determine whether the independent variables are reliable, the Multiple R, R Square, Adjusted R Square and Standard Error are used. Diff: 2 LO: 8-5 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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458) Skyward Airlines would like to create a regression model to predict cash. The variables used inthe regression model include values of cash, total revenue, cash flow from operations, cash flow from investing and cash flow from financing for the last 8 years. Using the data analysis regressionfunctionality in Excel, the following regression statistics were generated: ANOVA

Regression Residual Total

df 4 3 7

SS 2601725 198503 2800228

MS 650431.1 66167.65

F 9.830047

Significance F 0.045178

Based on the AVONA output of the regression analysis, what can you conclude? A) Increasing more years in the data observation will improve the Significance F value. B) Adding more independent variables in the model will help improve the Significance F value. C) The regression model using the independent variables is significant since the value is less than 0.05. D) Total revenue, cash flow from operations, cash flow from investing and cash flow from financing are reliable independent variables for the regression model. Answer: C Explanation: Since the Significance F value is 0.045, it is lower than 0.05, so the regression model using the independent variables is significant. Diff: 2 LO: 8-5 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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52) Horton Homes is a construction company. While many construction companies recognize revenue using the percentage of completion method, Horton Homes' revenue recognition policy is based on the closing of the sale. Homes that are not sold yet are treated as inventory and should be a good indicator of potential revenue. Horton Homes would like to build a linear regression model for revenue. You use historic inventory and cash values to determine if these variables should be used in the model. Using the data analysis regression functionality in Excel, the following regression statistics were generated: ANOVA df Regression Residual Total

2 7 9

SS 2.82E+20 7.49E+18 2.89E+20

MS 1.41E+20 1.07E+18

F 131.6032

Significance F 2.79839E-06

Based on the AVONA output of the regression analysis, what can you conclude? A) The regression model using cash and inventory as independent variables is not significant. B) The regression model using cash and inventory as independent variable is significant. C) Cash and inventory cannot explain some of the variations in revenue values. D) Additional independent variables should be included to help explain some of the variations in revenue values. Answer: B Explanation: Since the Significance F value is less than 0.05 so the regression model using cash and inventory is significant. Diff: 2 LO: 8-5 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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53) Horton Homes is a construction company. While many construction companies recognize revenue using the percentage of completion principle, Horton Homes' revenue recognition policy is based on the closing of the sale. Homes that are not sold yet are treated as inventory and should be a good indicator of potential revenue. Horton Homes would like to build a linear regression model for revenue. You use history inventory and cash values to determine if these variables should be used in the model. Using the data analysis regression functionality in Excel, the following regression statistics were generated:

Intercept Cash Inventory

Standard Coefficients Error t Stat -2.7E+09 1.02E+09 -2.60848 -0.20306 0.723724 -0.28057 1.971679 0.166272 11.85814

P-value 0.034991 0.787151 6.89E-06

Based on the regression analysis output, what can you conclude? A) Inventory is a better predictor of revenue compared to cash. B) Cash is a better predictor of revenue compared to inventory. C) As inventory values increase, revenue will likely decrease. D) As cash values increase, revenue will likely increase. Answer: A Explanation: Since the p-value is less than 0.05 for Inventory and the p-value is higher than 0.05 for cash, we can conclude that inventory is more significant and is a better predictor of revenue. Diff: 2 LO: 8-5 Bloom: AN Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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54) Horton Homes is a construction company. While many construction companies recognize revenue using the percentage of completion principle, Horton Homes' revenue recognition policy is based on the closing of the sale. Homes that are not sold yet are treated as inventory and should be a good indicator of potential revenue. Horton Homes would like to build a linear regression model for revenue. You use historic inventory and cash values to determine if these variables should be used in the model. Using the data analysis regression functionality in Excel, the following regression statistics were generated:

Intercept Cash Inventory

Standard Coefficients Error t Stat -2.7E+09 1.02E+09 -2.60848 -0.20306 0.723724 -0.28057 1.971679 0.166272 11.85814

P-value 0.034991 0.787151 6.89E-06

Using the regression analysis output, what would be the projected revenue if cash is $5 billion and inventory is $15 billion? A) $25.85 billion B) $27,85 billion C) $33.25 billion D) The projected revenue is unable to be calculated based on the regression information provided. Answer: A Explanation: The projected revenue can be calculated using the coefficients provided. So the projected revenue is $25.85 billion [-2.7 - 0.2*(5 for cash) + 1.97*(15 for Inventory)]. Diff: 2 LO: 8-5 Bloom: AP Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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55) ElectricRev is an automaker of electric vehicles. Using 2020 values, ElectricRev wants to forecast operating income for 2021 using three sensitivity analyses: best case, likely case, worst case. The best-case sensitivity analysis projects total revenue to be $10 million, and projects General and Administrative expenses and Research and Development expenses to increase by 5%. The likely case sensitivity analysis projects total revenue to be $5 million, and projects General and Administrative expenses and Research and Development expenses to increase by 10%. The worst-case sensitivity analysis projects no revenue, and projects General and Administrative expenses and Research and Development expenses to increase by 20%. The cost of revenue will be 50% of total revenue for all sensitivity analyses. The following shows the values from the 2020 financial statements: (in millions) $0 $0 $22.3 $21.0 -$43.3

Total Revenue Cost of Revenue General and Administrative Expenses Research and Development Expenses Operating Income

What is the operating income for the best case, likely case, and worst case sensitivity analyses? A) Best case is -$42.63 million, likely case is -$45.13 million, and worst case is -$51.96 million. B) Best case is -$40.47 million, likely case is -$42.97 million, and worst case is -$51.96 million. C) Best case is -$40.47 million, likely case is -$45.13 million, and worst case is -$51.96 million. D) None of these answer choices are correct. Answer: D Explanation: Best Likely Worst Current Total Revenue 10 5 0 0 Cost of Revenue 5 2.5 0 General and Administrative 23.415 24.53 26.76 22.3 Expenses Research and Development 23.205 24.31 26.52 22.1 Expenses Operating Income -41.62 -46.34 -53.28 -44.4 Diff: 3 LO: 8-5 Bloom: AP Min.: 3 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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56) Norman's Cakes is a start-up bakery specializing in decorative cakes. They are looking for revenue growth by expanding their product offerings. There are currently two varieties of cakes being offered and they would like to introduce the strawberry passion cake into their product line. Norman's Cakes would like to achieve a total contribution margin of $15,000. The contribution margin ratios have already been determined for all three cakes and the revenue for the first two cakes have been estimated.

Carrot Coconut Cake Key Lime Supreme Cake Strawberry Passion Cake Total

Contribution Contribution Revenue Margin % Margin $20,000 20% $4,000 $30,000 18% $5,400 ? 15% ? $15,000

Using the goal seek analysis methodology, what would be the revenue needed to achieve a total contribution margin of $15,000? A) $6,588 B) $33,000 C) $33,333 D) $37,333 Answer: D Explanation: The calculation can be done using the What-if analysis feature in Excel but it can also be manually calculated since the calculation is not complex. A revenue of $37,333 [(15,000 4,000 - 5,400)/.15] is needed to achieve a total contribution margin of $15,000. Diff: 2 LO: 8-5 Bloom: AP Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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464) Bright Pearl Social is a restaurant specializing in late-night dining and cocktails. A survey wasprovided to customers to determine their customer satisfaction. The data from the survey was analyzed to find if customer satisfaction was correlated with the customer profile data and order data. A correlation analysis generated the following output:

Satisfaction Score Age of Customer Yearly Income of Customer Amount Spent on Food Amount Spent on Drinks

Correlation Coefficient 11 0.20 0.10 -0.20 0.70

What conclusion can you make regarding the amount spent on drinks? A) Customer satisfaction is strongly impacted by the amount spent on drinks. B) Customer satisfaction is moderately impacted by the amount spent on drinks. C) Customer satisfaction is not impacted by the amount spent on drinks. D) Customer satisfaction is negatively impacted by the amount spent on drinks. Answer: A Explanation: The amount spent on drinks has a correlation coefficient of 0.7 which means it has a strong positive correlation with customer satisfaction. Diff: 1 LO: 8-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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465) Bright Pearl Social is a restaurant specializing in late-night dining and cocktails. A survey wasprovided to customers to determine their customer satisfaction. The data from the survey was analyzed to find if customer satisfaction was correlated with the customer profile data and order data. A correlation analysis generated the following output:

Satisfaction Score Age of Customer Yearly Income of Customer Amount Spent on Food Amount Spent on Drinks

Correlation Coefficient 11 0.20 0.10 -0.20 0.70

What conclusion can you make about the correlation analysis? A) Customer satisfaction is strongly impacted by the age of the customer and the yearly income of the customer. B) Customer satisfaction has a weak correlation with the age of the customer and the amount spent on food. C) Customer satisfaction is moderately impacted by the yearly income of the customer. D) Customer satisfaction is not impacted by the amount spent on food. Answer: B Explanation: The age of the customer and the amount spent on food has a correlation coefficient of 0.2 and -0.2 respectively, so these are weak correlations with customer satisfaction. Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 59) CineMax is a streaming entertainment service company that has seen dramatic revenue growth throughout the years. To analyze the revenue growth, a trend analysis is used. The purpose of using the trend analysis is to A) compare revenue growth with other variables that might impact revenue. B) detect anomalies in the revenue data. C) develop best-case and worst-case scenarios for revenue projections. D) identify patterns using historic values. Answer: D Explanation: A trend analysis uses historic values to identify patterns. Diff: 1 LO: 8-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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60) A what-if analysis can be used to determine A) trends in inventory turnover ratios. B) how many tickets need to be sold to meet a profit margin goal. C) outliers in monthly sales. D) if marketing expense correlates with total revenue. Answer: B Explanation: A what-if analysis is concerned with prescribing what should happen to achieve a desired result. The desired result is to meet the profit margin goal. Diff: 1 LO: 8-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 61) Southern Fabrication is a manufacturer of traditional style furniture. Management would like to determine how they can increase their contribution margin on their furniture products. You are the cost accountant and suggested that a scenario analysis can be used to determine A) the contribution margin if the variable cost is increased by 25%. B) if there is a relationship between fixed cost and contribution margin. C) if there are anomalies in the contribution margin ratio. D) if the variable cost is missing any other cost components. Answer: A Explanation: A scenario analysis evaluates how changes of model inputs impact the output. If variable cost increases, how would contribution margin change? Diff: 1 LO: 8-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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62) Eco Scooters is a young company, which sells electric scooters through their retail stores. The sales manager is new to the company and is not familiar with data analytics concepts. You are asked to explain the difference between predictive analytics and prescriptive analytics. What is your response? A) Predictive analytics uses models to predict future outcomes whereas prescriptive analytics uses historical data to analyze trends. B) Predictive analytics uses models to detect anomalies whereas prescriptive analytics determines what should happened to achieve a desired result. C) Predictive analytics uses models to predict future outcomes whereas prescriptive analytics summarizes categories of data. D) Predictive analytics uses models to predict future outcomes whereas prescriptive analytics determines what should happened to achieve a desired result. Answer: D Explanation: Predictive analytics uses models to predict future outcomes whereas prescriptive analytics determines what should happened to achieve a desired result. Diff: 1 LO: 8-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 63) Jump Start Productions is a theater production company and operates five theaters in the city. In the last few years, operating costs have been steadily increasing. The finance manager has asked to you to predict operating costs for future fiscal quarters. You suggested that a regression model can be used to predict operating costs, but you will need to explain what a dependent variable is and what an independent variable is. What is your response? A) A dependent variable is the variable that impacts the independent variable, so in this case, it could be theatre leasing costs. An independent variable is the variable we are trying to predict, so in this case, it is operating costs. B) A dependent variable is the variable that is being predicted so in this case, it is the operating costs. An independent variable is the variable that impacts the dependent variable. For example, ticket sales would be an independent variable since it impacts the operating costs. C) A dependent variable is the variable that is being predicted so in this case, it is the operating costs. An independent variable is the variable that impacts the dependent variable. For example, theatre leasing costs would be an independent variable since it impacts the operating costs. D) A dependent variable is the variable that impacts the independent variable, so in this case, it could be ticket sales. An independent variable is the variable we are trying to predict, so in this case, it is operating costs. Answer: C Explanation: A dependent variable is the variable that is being predicted whereas an independent variable is the variable that impacts the dependent variable. Diff: 2 LO: 8-5 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 467

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64) What is the difference between a negative linear relationship and a positive linear relationship? A) A negative linear relationship means that there is no data relationship; as one variable increases, the other variable cannot be predicted. For example, when interest rates increase, salary expenses cannot be predicted. A positive linear relationship is a relationship where if one variable increases, the other variable also increases. For example, when interest rates increase, mortgage expenses increase. B) A negative linear relationship is an inverse relationship; as one variable increases, the other decreases and vice versa. For example, when interest rates increase, bond prices fall. A positive linear relationship is a relationship where if one variable increases, the other variable remains constant. For example, when fuel rates increase, mortgage expenses remain constant. C) A negative linear relationship is an inverse relationship; as one variable increases, the other decreases and vice versa. For example, when interest rates increase, bond prices fall. A positive linear relationship is a relationship where if one variable increases, the other variable also increases. For example, when interest rates increase, mortgage expenses increase. D) None of the answer choices are correct. Answer: C Explanation: A negative linear relationship is an inverse relationship; as one variable increases, the other decreases and vice versa. A positive linear relationship is a relationship where if one variable increases, the other variable also increases. Diff: 2 LO: 8-5 Bloom: K Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 65) When analyzing the values of the mean, median and mode, which statement is correct? A) If there is a symmetrical distribution for a continuous data set, themean and median are the same values. B) If there are outliers in the data, the mean tends to be a more reliable value. C) If there are outliers in the data, the mode tends to be a more reliable value. D) The mean is always more reliable than the median. Answer: A Explanation: If there is a symmetrical distribution for a continuous data set, the mean and median are the same values. For example, a data set consisting of 1, 3, 5, 7, and 9 will have a mean of 5 and a median of 5. Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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66) What is the difference between reliability and validity in the context of data analysis? A) Reliability means that the analysis uses measures that have strong positive correlations. Validity means that the analysis uses measures that are trustworthy. B) Reliability means that the analysis uses measures that are trustworthy. Validity means that the analysis uses measures that have strong positive correlations. C) Reliability means that the analysis uses measures that represent reality. Validity means that the analysis uses measures that are accurate, and the data is dependable. D) Reliability means that the analysis uses measures that are accurate, and the data is dependable. Validity means that the analysis uses measures that represent reality. Answer: D Explanation: Reliability means that the analysis uses measures that are accurate, and the data is dependable. Validity means that the analysis uses measures that represent reality. Diff: 1 LO: 8-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 67) What are examples of measures of location? A) Standard deviation, correlation coefficients, and p-value B) Mode, median, and mean C) Mode, Significance F, and intercept D) Correlation coefficients, standard error, and standard deviation Answer: B Explanation: Measures of location include mode, median, and mean. Diff: 1 LO: 8-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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68) You are in the construction industry and would like to compare the current asset accounts of your competitors. Specifically, you want to determine which competitor has higher inventory and accounts receivables values. A stacked bar chart was created for the analysis:

Does the stacked bar chart provide answers to your question? A) No, the stacked bar chart provides the total current asset value but the value of individual balances for inventory and accounts receivables are difficult to determine. A crosstab analysis using a clustered column chart would be a better visualization to use. B) No, the stacked bar chart provides the total current asset value but the value of individual balances for inventory and accounts receivables are difficult to determine. A boxplot would be a better a visualization to use. C) Yes, the stacked bar chart provides the values of individual balances for inventory and accounts receivables, and we can easily determine which competitor had the higher value. D) None of these answer choices are correct. Answer: A Explanation: The stacked bar chart is not an appropriate visualization to use for answering the question. Inventory and accounts receivable should be its own column in the clustered column chart. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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69) You are an accountant at Brighten University. You are asked to provide an analysis of the purchase orders created throughout the year and present your findings in a memo. Attention: Director of Procurement Subject: Purchase Order Analysis A data analysis was required to examine purchase order transactions for the year. A chart was used to show the between purchase order value and the purchase order data. The results show that there is a between the value of the purchase order and the purchase order date. The purchase order in of looks to be an and should be investigated to see if it is a valid transaction or an .

What words/values are missing from the memo? A) scatterplot; regression; variance; January; $4,000; anomaly; outlier B) histogram; relationship; correlation, December; $17,000; outlier; anomaly C) histogram; regression; variance; January; $4,000; anomaly; outlier D) scatterplot; relationship; correlation, January; $23,000; outlier; anomaly Answer: D Explanation: A scatterplot is a type of display that shows the relationship between two numerical variables; a relationship describes if there is a connection between the two variables; correlation measures the extent that the two variables are related; the January PO of $23,000 looks to be an outlier since it's much higher than the other January values; an outlier is a legitimate observation; an anomaly is an illegitimate observation. Diff: 2 LO: 8-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 471

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70) You are an accountant at Coral Apartments and have been asked to provide an analysis on projecting profitability if the monthly rental rates increased by $100. You present your analysis in a memo. Attention: Coral Apartment Senior Management Subject: Analysis of Rent Increase were used to determine projected monthly profits if the monthly rental rates increased by $100. In Excel, the functionality was used to conduct the analysis. In the scenario, the units rented will remain unchanged. In the scenario, units rented will decrease to 365 and in the scenario, the units rented will decreased by 10. Operating costs are expected to remain the same. The expected monthly profit for each scenario is shown in the table below.

Monthly Rental Rate Units Rented Rental Revenue Operating Costs Monthly Profit

Current Optimistic $2,200 $2,300 410 410 $902,000 $943,000 $230,000 $230,000 $672,000 $713,000

Likely Pessimistic $2,300 $2,300 400 365 $920,000 $839,500 $230,000 $230,000 $690,000 $609,500

What words/values are missing from the memo? A) Prescriptive analytics; what-if analysis scenario manager; optimistic; pessimistic; likely B) Prescriptive analytics; what-if analysis goal seek; pessimistic; likely; optimistic C) Predictive analytics; linear regression, likely; pessimistic; optimistic D) Predictive analytics; what-if analysis goal manager; optimistic; pessimistic; likely Answer: A Explanation: Prescriptive analytics helps understand what should happen to meet goals and objectives; what-if analysis scenario manager spreadsheet model that evaluates changes and specific combinations of model inputs and assumption; in the optimistic scenario the units rented will remain unchanged; in the pessimistic scenario, units rented will decrease to 365 and in the likely scenario, the units rented will decrease by 10. Diff: 2 LO: 8-5 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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71) Which of the following statements are true regarding data exploration and data interpretation? Select all that apply. A) Data exploration and data interpretation are very similar but there are differences. B) Generally, data exploration is done before data interpretation. C) Data exploration and data interpretation are two distinct activities and do not overlap. D) Informed decisions are made after data exploration and before data interpretation. Answer: A, B Explanation: Data exploration and data interpretation are very similar. The general sequence of activities is data exploration, data interpretation and informed decisions. Diff: 1 LO: 8-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 72) East Coast Investors Group is a financial services company who would like to analyze their debt-to-equity ratios. They would like to determine if the ratios are increasing or decreasing. The company is aware that debt-to-equity ratios are generally higher in the financial industry compared to other industries. What questions should be asked when interpreting the results of the analysis? Select all that apply. A) Is there a data relationship between short-term debt and cash values? B) Is using total debt and shareholders' equity the correct data for the analysis? C) Is it reasonable that debt-to-equity is increasing given that the company issued more bonds over the last 5 years? D) Does the analysis showing that debt-to-equity is increasing address the purpose of the analysis? Answer: B, C, D Explanation: Interpreting results involves asking if the analysis answers the original question or purpose of the analysis; if the correct data and appropriate method was used; and if the results are reasonable. Diff: 2 LO: 8-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

473

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73) Red Deer College is a public community college offering associate's and bachelor's degrees. Each year the planning and budget department reviews variances between actual and budgeted values of the previous year. Results of this analysis will guide the planning for next year's budget. What activities would be included in the data exploration of the variance analyses? Select all that apply. A) Determine the relationship of the actual values versus budgeted values for revenue line items. B) Determine if the data from actuals were audited for accuracy. C) Determine the relationship of the actual values versus budgeted values for expense line items. D) Explore revenue items by determining what proportion came from government grants and what proportion came from student tuition. Answer: A, C, D Explanation: Data exploration involves validating current beliefs about data relationships and exploring data relationships. Diff: 1 LO: 8-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 74) East Brook University is a world-renowned research university. An analysis of research and development spending is required to help validate budget-planning decisions for the next budget year. Which stakeholders would be identified in the analysis? Select all that apply. A) Research faculty and staff B) Funding agencies C) Students D) Lab Suppliers Answer: A, B, C, D Explanation: All the answers are stakeholders since they are impacted by results of the analysis. Diff: 1 LO: 8-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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75) East Brook University is a world-renowned research. An analysis of research and development spending is required to help validate budget-planning decisions for the next year. Budget planning is a complex process requiring knowledge beyond financial accounting. Which knowledge areas should be acquired so that the results of the data analysis can be interpreted correctly? Select all that apply. A) Research granting agencies B) Variance analysis C) Fund accounting D) Health and safety regulations Answer: A, B, C Explanation: The analysis requires knowledge in research granting agencies, variance analysis, and fund accounting. Health and safety regulations are not impacted by the analysis as this data does not affect the knowledge areas. Diff: 2 LO: 8-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 76) Pizza Decadent Company is a restaurant franchise specializing in thin crust pizza. They are expanding to other locations and would like to determine how many waitstaff should be hired to optimize revenue. A scatterplot was used to plot the waitstaff count and the total revenue of each restaurant. What questions should be asked to help assess potential data risk? Select all that apply. A) Was the number of waitstaff correct and complete? Did the number include full-time and part-time staff? Were other staff members included in the count such as management? B) Were there internal controls in place to capture the correct total revenue value? C) Was the total revenue based on a full year or a partial year? Was the data too old to be relevant? Was the total revenue only based on selected months that had high revenues? D) Should a scatterplot or bar chart be used to display the data? Should there be other methods that would better display the results? Answer: A, B, C Explanation: Assessing potential data risks involve asking questions around completeness, internal controls, and timeliness. The method to display the results is not considered a potential data risk but rather a potential analysis risk. Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

475

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77) Pizza Decadent Company is a restaurant franchise specializing in thin crust pizza. They are expanding to other locations and would like to determine how many waitstaff should be hired to optimize revenue. A scatterplot was used to plot the waitstaff count and the total revenue of each restaurant. What questions should be asked to help assess potential analysis risk? Select all that apply. A) Was the data for total revenue complete, accurate, and timely? B) Was using a scatterplot the correct method to perform the analysis? C) Was using the waitstaff count and total revenue for each store the correct data to use in the analysis? D) Did the scatterplot analysis provide an answer to how many waitstaff should be hired for the new location? Answer: B, C, D Explanation: Assessing potential analysis risks involve asking if the correct method was used to perform the analysis; did the analysis use the wrong data, and did the analysis answer the purpose/question. Questions around completeness, accuracy and timeliness are considered potential data risks. Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 78) Pizza Decadent Company is a restaurant franchise specializing in thin crust pizza. They are expanding to other locations and would like to determine how many waitstaff should be hired to optimize revenue. A scatterplot was used to plot the waitstaff count and the total revenue of each restaurant. What questions should be asked to help assess potential bias risk? Select all that apply. A) Did the waitstaff count ignore the number of part-time staff to make some restaurants look more efficient? B) Did the waitstaff count include the number of cooks and cleaners to make some restaurants look less efficient? C) Did the preparer have a potential bias since they want to use a lower number of waitstaff for the new location? D) Is there an evaluator bias since the evaluator of the results only visited highly profitable locations that had lower waitstaff counts? Answer: A, B, C, D Explanation: The three potential bias risks are data biases, preparer biases, and evaluator biases. Diff: 1 LO: 8-4 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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79) SuperDepot is a multinational corporation, which operates a chain of membership-only big-box retail stores. SuperDepot's revenues can have predictable sales throughout the year but in some cases, there could be some months that have higher than normal sales. Which scenario would be an example of a sales outlier? Select all that apply. A) A new credit card promotion that offered an additional 20% off during the month of May caused a spike in sales. B) A tropical storm caused a spike in sales of staple items such as canned goods in April. C) A release of highly anticipated smartphone generated a large number of pre-orders and this caused a spike in sales in September. D) A new sales employee failed to records sales due to a lack of training and this inflated sales values in September. Answer: A, B, C Explanation: Failure to record sales returns would be considered an anomaly since it is a mistake. All of the other answers are outliers since they are legitimate transactions. Diff: 2 LO: 8-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 80) What is confirmation bias? Provide an example of confirmation bias within an accounting context and state how the confirmation bias can be mitigated. Answer: Confirmation bias occurs when the person performing the analysis wants to prove a predetermined assumption. For example, a company paid large bonuses this year so the predetermined assumption may be that sales were strong for the year. To mitigate confirmation bias, the analysis should try to prove that sales were not strong, rather than assume that the sales were strong. Diff: 1 LO: 8-3 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 81) What is selection bias? Provide an example of selection bias within an accounting context and state how the selection bias can be mitigated. Answer: Selection bias occurs when the data used in the analysis is selected subjectively. For example, if the allowance for doubtful accounts is being estimated, selecting large accounts receivable values to calculate the allowance would be a selection bias. To mitigate selection bias, the entire set of accounts receivables should be analyzed so that all values are factored into the estimate. Diff: 1 LO: 8-3 Bloom: C Min.: 3 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 477

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82) What is meant by a dependent variable in a regression analysis? Provide an example of a dependent variable in a regression analysis scenario. Answer: A dependent variable is the variable that is being measured or predicted. For example, if the regression analysis is trying to estimate or predict tax expense, the dependant variable would be tax expense. The variables that impact the dependent variable are called the independent variables. Diff: 1 LO: 8-5 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 83) What is meant by an independent variable in a regression analysis? Provide an example of an independent variable in a regression analysis scenario. Answer: An independent variable is the variable that impacts or drives the values that is being measured or predicted. For example, if the regression analysis is to estimate tax expense, the independent variable could include interest rates, short-term liabilities such as notes payables, and long-term liabilities such as bonds payables. Diff: 1 LO: 8-5 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 84) What are the differences between descriptive analytics and diagnostics analytics? What is the purpose of each type of analytics? Answer: Descriptive analytics helps us to better understand the data underlying the analysis that you are interpreting whereas diagnostic analytics helps us to understand why something has occurred. The purpose of descriptive analytics is to understand categories of data; summarize by data categories and identify average and dispersions of data. The purpose of descriptive analytics is to find anomalies, examine data relationships, and identify patterns. Diff: 2 LO: 8-5 Bloom: K Min.: 3 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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85) What is the difference between an outlier and an anomaly? Provide an example of an outlier and an anomaly within an accounting context. Answer: An outlier is a legitimate observation whereas an anomaly is an illegitimate observation. An example of an outlier could be a spike in sales of textbooks in September due to the launch of a new school year. An example of an anomaly could be a fraudulent sales transaction that was entered to increase a salesperson's bonus. Diff: 1 LO: 8-5 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 86) Explain the difference between a negative linear relationship and a positive linear relationship. Provide examples of a negative linear relationship and a positive linear relationship within an accounting context. Answer: A negative linear relationship is an inverse relationship; as one variable increases, the other decreases and vice versa. A positive linear relationship is a relationship where if one variable increases, the other variable also increases. An example of a negative linear relationship would be as sales expense increases, operating income decreases. An example of a positive linear relationship would be as the company's profits increase, its market capitalization increases. Diff: 1 LO: 8-5 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 87) What are the differences between predictive analytics and prescriptive analytics? Provide examples within an accounting context of each type of analytics. Answer: Predictive analytics helps us predict future outcomes whereas prescriptive analytics helps us determine what should happen to achieve our desired result. An example of predictive analytics could be predicting future revenues based on sales marketing spending. An example of prescriptive analytics could be determining how many concert tickets need to be sold to breakeven. Diff: 2 LO: 8-5 Bloom: C Min.: 2 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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88) What does the p-value of a regression analysis represent? What is a common rule of thumb for the p-value? Answer: The p-value tests the significance for each of the independent variable in a regression model. The value determines if the independent variable improves the ability to better predict the dependent variable. The common rule of thumb is that a p-value of 0.05 or less is generally considered significant. Diff: 1 LO: 8-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 89) What does the standard error of a regression analysis represent? How do you determine if a standard error is large or small? Answer: The standard error represents the variability of the observed dependent variable values from the values that are predicted by the model. It compares the actual dependent variable to the predicted value that the model provides. The size of the standard error can be determined by comparing it to the standard deviation of the dependent variable. If the standard deviation is higher than the standard error, then the standard error would be considered small. Diff: 2 LO: 8-5 Bloom: C Min.: 3 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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90) ElectroFuel Motors is an electric vehicle manufacturer. To secure cash for expansion, ElectroFuel Motors issued common shares and corporate bonds to provide cash needed for research and development and to expand manufacturing operations. Cash continues to be a problem for ElectroFuel Motors. Management would like to identify any trends in the cash flow from financing activities to help them determine how many common shares and corporate bonds need to be issued in the future. For this analysis, discuss each element of the SPARKS critical thinking framework. Questions A. Stakeholders — who are the stakeholders? B. Purpose — what was the purpose for analysis? C. Applicable Knowledge — what knowledge did the preparer need and what knowledge does the interpreter need to understand the analysis? D. Risks — are there any risks we should consider? E. Key alternatives — are there alternative explanations or analyses? F. Self-reflection — how can you use your prior experience or apply this experience to future analyses? Answer: A. Stakeholders — Internal — ElectroFuel Motors' management team, finance and accounting department, employees; External — shareholders, bondholders, creditors, vendors. B. Purpose — To understand the trends in common stock transactions and bond issuances each are reported as financing activities on the Statement of Cash Flows. Due to the issuance of common shares and corporate bonds the cash collected for both will be reported as future cash flows to be projected. C. Applicable knowledge needed — Knowledge of ElectroFuel Motors and the electric vehicle industry; knowledge of corporate finance and the financial markets; knowledge of financial statements, specifically the cash flow statement; knowledge of data analysis preparation and interpretation. D. Risks — Data may be missing; data may be incorrect; latest fiscal year numbers may be unaudited; choosing incorrect data to include in the analysis; using incorrect methods to display results; interpreting an analysis incorrectly due to evaluator biases. E. Key alternatives — There could be alternative analyses that should be or could be prepared; value of common shares can be impacted by the overall health of the financial markets and the economy; interest rates of bonds can be impacted by the US prime rate and federal fund rate. An analysis of revenues and debt obligations may be needed since they impact cash requirements; all of these factors can offer alternative explanations as to why the cash flow from financing activities increased or decreased. F. Self-reflection — Am I familiar with cash flow analyses from a prior project that I can apply to this project? Can I apply what I learn in this project to future cash flow analysis projects? Diff: 2 LO: 8-2 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

481

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91) National Opera House opened in 1926 and is now in need of major renovations. The capital projects department placed a bid call to construction companies for this renovation project. The following table shows the values of the 10 bids that were received. # of Bids 1 4 2 2 1

Value of Bids (in millions) $8 $9 $10 $12 $32

You are a budget analyst for the city, and you have been asked to analyze the bids. Questions A. What are the mean, median and mode values of the bids? B. Which bid would be considered an outlier? C. Which of the values (mean, median or mode) would you base your renovation budget on and why? Answer: A. The mean is $12 which is calculated by taking the sum total of bids at $120 divided by sum total of all bids which is 10, the median is $9.5 calculated by taking the sum total of the middle quartile 19 divided by 2, and the mode is $9 which occurs the most in the data presented. (The values can be calculated using a calculator). B. The bid of $32 million would be considered an outlier since it is very high compared to the other bids but there could be legitimate reasons why the value is high. C. The median or mode values are very similar but the median is slightly higher so it should be used as a budget value based on the principles of conservatism. The mean should not be used since it includes the outlier, which is inflating the mean. Diff: 2 LO: 8-4 Bloom: AN Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

482

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92) You are an investor and hold four stocks in diverse industries. You have diversified your investments to reduce your risk in economic downturns in specific industries. To help determine the performance of your stocks, you compare the stock prices against the S&P 500. The S&P 500 is a stock market index that measures the stock performance of 500 of the largest companies listed on the US stock exchange, so it's a good financial indicator with which to compare stock prices. A correlation analysis generated the following output: S&P 500 S&P ElectroCell TMG Group RG Bank CottonBud

1 0.741 -0.353 0.919 -0.477

ElectroCell 1 0.002 0.811 -0.029

TMG Group

1 -0.261 0.646

RG Bank

CottonBud

1 -0.287

Questions A. Which stock has the strongest positive correlation with the S&P 500? B. Which stock has the strongest negative correlation with the S&P 500? C. Interpret the correlation with ElectroCell and TMG Group. D. Interpret the correlation with ElectroCell and RG Bank. Answer: A. RG Bank since the correlation coefficient is close to +1. B. CottonBud since the correlation coefficient is close to -1. C. Since the correlation coefficients between ElectroCell and TMG Group is close to 0, it means that there is no linear relationship between the two stocks. D. Since the correlation coefficients between ElectroCell and RG Bank is 0.8, it means that there is a strong positive correlation. As the ElectroCell stock price increases, the RG Bank stock price also increases. Diff: 2 LO: 8-4 Bloom: AN Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

483

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93) Bloomingfields is a department retailer with locations across the country. Bloomingfields recognizes that attracting the best employees at all levels of the company can provide a competitive edge in the retail sector. The company issued an employee satisfaction survey. They would like to determine if salary, age, hours worked, and company tenure impact employee satisfaction. A correlation analysis generated the following output: Correlation Coefficient Satisfaction Score Yearly salary Age of employee Weekly Hours Worked Tenure at company

1 0.701 0.103 -0.809 -0.207

Interpret the employee satisfaction correlation coefficient for each survey data element. Answer: Yearly Salary — there is a strong positive relationship so as yearly salary increases, employees are more satisfied. Age of Employee — since the value is close to 0, there is almost no relationship, so as age increases, there is no correlation with employee satisfaction. Weekly Hours Worked — there is a strong negative relationship so if more hours are worked, employee satisfaction strongly weakens. Tenure at company — there is a weak negative relationship so if there is more tenure with the company, employee satisfaction weakens a little. Diff: 2 LO: 8-4 Bloom: AN Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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94) BaboPad is a manufacturer of pickleball paddles. Pickleball is an increasingly popular sport resulting in more paddles being purchased. BaboPad would like to prepare an operating profit forecast for the next year using the current year data. Using sensitivity analysis, they would like to forecast the best-case, likely-case, and worst-case scenarios. For the best-case scenario, they expect sales to increase by 20%; for the likely-case scenario, they expect sales to increase by 10%; and for the worst-case scenario, they expect sales to increase by 5%. Variable costs will be 40% of sales and fixed costs are expected to be increased by 10%. The current year values are as follows:

Total Sales Total Variable Costs Contribution Margin Total Fixed Costs Operating Profit

Current Values $1,330,000 $532,000 $798,000 $350,000 $448,000

What is the operating profit projection for the best-case, likely-case, and worst-case scenarios? Answer: Current Values Best-Case Likely-Case Worst-Case Total Sales 1,330,000 1,596,000 1,463,000 1,396,500 Total Variable Costs 532,000 638,400 585,200 558,600 Contribution Margin 798,000 957,600 877,800 837,900 Total Fixed Costs 350,000 385,000 385,000 385,000 Operating Profit 448,000 572,600 492,800 452,900 Diff: 2 LO: 8-5 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

485

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95) ProTax is a professional tax preparation software for tax accountants. The cost of the software is $7000 per year using "pay as you go" pricing, so on top of the yearly subscription charge, ProTax charges $49 for every tax return submitted. Cornerstone Tax is a small tax accounting firm looking to purchase ProTax. They charge clients $400 per tax return. The variable costs will be $49 per return and their fixed cost will be $7000, which is the price of the software. They would like to perform prescriptive analytics to determine what inputs are needed to achieve certain goals. Question A. How many tax returns do they need to complete to breakeven? B. How many tax returns do they need to complete to generate a net revenue of $85,000? C. Are other fixed costs and variable costs needing to be considered to further analyze the validity and reliability of tax return information? Answer: A. Cornerstone Tax needs to complete 20 tax returns to breakeven. The answer can be solved using the Goal Seek functionality in Excel or it can be done manually using a calculator. Revenue Per Return Variable Cost Per Return Contribution Margin Per Return # of Returns Contribution Margin Fixed Cost Net Revenue

$400 A (given) $49 B (given) $351 C=A-B 20 D=E/C $7,020 E=G+F $7,000 F (given) $20 G (goal given)

B. Cornerstone Tax needs to complete 263 tax returns to achieve a net revenue of $85,000. The answer can be solved using the Goal Seek functionality in Excel or it can be done manually using a calculator. Revenue Per Return Variable Cost Per Return Contribution Margin Per Return # of Returns Contribution Margin Fixed Cost Net Revenue

$400 A (given) $49 B (given) $351 C=A-B 263 D=E/C $92,313 E=G+F $7,000 F (given) $85,313 G (Goal given)

Diff: 2 LO: 8-5 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

486

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96) You are a financial analyst at a technology company who is striving to be among the high-performing technology companies. You have noticed that for high-performing technology companies, research and development is a major component to their business model and this has led to innovative and marketable products and services. The vice president of research and development has asked you to provide an analysis of the research and development spending at these competing companies to help provide guidance on their own research and development budget. You have created a crosstab analysis using a clustered bar chart.

Questions A. Does the analysis address the purpose? Why or why not? B. Does the analysis need more information or analysis? If yes, what additional analyses should be included? Answer: A. Yes, the analysis addresses the purpose. The VP would like to see the spend totals for each of the high-performing technology companies. The graph shows the yearly trends for each company and this is an important observation since it suggests that your company should be increasing research and development spending as well to remain competitive. B. Although the analysis addresses the purpose, more analysis can be used to enhance the budget decision-making. The graph can also include the research and development spend as a percentage of total expenses. The percentage range can be used as a benchmark for allocating research and development costs in the budget. The percentage can be added to the same graph using a dual axis. The dual axes will show if there is a correlation between the total research and development spend and the percentage of total expenses. Diff: 2 LO: 8-4 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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97) Live Planet Entertainment is a concert promoter and an events management company. They have conducted as survey of their classical music concert series. They would like to analyze customer satisfaction. They want to know if customer satisfaction is correlated with factors related to their ticket purchase. A correlation analysis generated the following output:

Satisfaction Score Value of tickets Size of concert event Value of Merchandise Purchase Value of food and beverage purchase

Correlation Coefficient 11 -0.301 -0.703 0.209 0.107

Questions A. Are the results of the analysis reasonable given what we know about the subject being analyzed? Explain why. B. Based on the results of the analysis, what recommendations would you provide to Live Planet Entertainment on how to improve customer satisfaction? Answer: A. Yes, the results are reasonable. The value of the tickets has a weak negative relationship, which is plausible if people don't feel that paying premium price tickets were worth the money. It makes sense that for a classical concert, people prefer smaller venues, so as the size of the venue increases, satisfaction decreases. Merchandise, food, and beverage purchases have little impact to customer satisfaction, and this is reasonable since people are focussed on the concert itself and not the ancillary purchases. B. Management should review the ticket price to ensure that the price matches the perceived value for the seat. Since there is a strong negative relationship between the size of venue and customer satisfaction, they should find smaller venues for their classical concert series. They should continue to have merchandise, food and beverage offering since there is a positive relationship, even though the relationship is weak. Diff: 2 LO: 8-3 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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98) Cash flow has been a major financial problem for Aerofleet Airlines during the COVID pandemic of 2020. Aerofleet Airlines burned through more cash compared to any other US airlines in 2020. Your finance manager has asked you to prepare a cash flow analysis for 2012 to 2020 to determine how the COVID pandemic impacted the components of the cash flow statement. You have taken the cash flow data and created a line chart to visualize the results.

Using the data interpretation overall questions and sub-questions to discussion your interpretation of the analysis.

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Answer: Is the data used in the analysis reasonable given the question/purpose of the analysis? The data used is reasonable. We are interested in how the cash flow values were changed so seeing cash flow broken out by the cash flow categories is required. The years 2012 to 2020 needed to be used in the analysis so that 2020 values can be compared to previous years. Is the analysis reasonable given the question/purpose of the analysis? We are interested in how the cash flow values in 2020 were affected and this is shown on the line chart. The line chart is a reasonable way to evaluate cash flow since certain years can be compared with other years, and the trend of each cash flow component can be seen. Are the results of the analysis reasonable given what you know about the subject being analyzed? Yes, the result of the analysis is reasonable given what you know about how the COVID pandemic affected travel. We would expect that cash flow from operations would decrease in 2020 and to raise more cash to meet short-term debt obligations, cash flow needed to be generated from financing activities. Are the implications of the analysis reasonable given what you know about the subject being analyzed? The results show that in 2020 there was a negative cash flow from operations and an increase of cash flow from finance. The implication of this result will mean that there will be future cash shortages and increased debt for the company. This implication is reasonable since more cash will be needed in the future to service financing activities. Does the analysis address the needs/concerns of the stakeholders? The analysis addresses the needs/concerns of your finance manager and upper management at Aerofleet Airlines because it alerts the company of its cash flow problem. Additional analyses to predict future cash flow would help address the cash flow issue for future years. Diff: 2 LO: 8-3 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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99) Headlink, a technology company, has significant Goodwill and Intangibles compared to competing companies; however, the proportion of Goodwill and Intangibles to Total Assets have declined. Goodwill and Intangibles are created through acquisitions of other companies and the creation of patents and trademarks from research and development. You are a finance manager at Headlink, and you have been asked to create a model to predict Goodwill and Intangibles. You have selected Selling, General & Administration Expense and Research & Development Expense as independent variables in your regression model. Historical data was used and the values were expressed in millions. The regression analysis generated the following output: Regression Statistics Multiple R 0.979877 R Square 0.960160 Adjusted R Square 0.953520 Standard Error 1657.9049 Observations 15 ANOVA df Regression Residual Total

Intercept Selling, General & Admin Research & Development

SS 2 794923543 12 32983785 14 827907329

Coefficients 699.41640 3.3981712 -2.802089

MS 397461772 2748648.77

Standard Error 933.63962 0.3713357 0.3883759

F 144.602

Significance F 3.998E-09

t Stat P-value Lower 95% 0.7491288 0.4682107 -1334.8095 9.1512083 9.256E-07 2.5891000 -7.2148880 1.06E-05 -3.6482875

Questions A. What does the Adjusted R square tell us about the regression model? B. What does the Significance F tell us about the regression model? C. What does the p-value tell us about the regression model? D. Use the model to predict Goodwill and Intangibles if Selling, General & Admin is $31,000 million and Research & Development is $30,000 million?

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Answer: A. The Adjusted R square tells us that 95.3% of the Goodwill and Intangibles can be explained by the values of the Selling, General & Admin and Research & Development. B. The Significance F value is lower than 0.05 so this means that Selling, General & Admin and Research & Development can explain the variation of Goodwill and Intangibles. C. The p-value for Research & Development and Selling, General & Admin are lower than 0.05, which means these independent variables are significant and are good predictors of Goodwill and Intangibles. D. Goodwill and Intangibles = $699 + 3.4 * 31,000 - 2.8 * 30,000 = $22,099 million. Diff: 3 LO: 8-5 Bloom: AN Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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100) Bright Property Group is a shopping mall operator in the United States. Many mall operators continue to struggle with debt, especially since some large department stores have gone bankrupt. Bright Property Group would like to improve their Operating Income and asked you, a financial analyst, to determine if Operating Income can be modeled using historic Plant, Property and Equipment (PPE) values and Total Debt values. You created a regression analysis for the values for 2015 to 2019, with the following output: Regression Statistics Multiple R 0.85473 R Square 0.73057 Adjusted R Square 0.46114 Standard Error 120350065 Observations 5 ANOVA df Regression Residual Total

Intercept PPE Total Debt

2 2 4

SS 7.85E+16 2.89E+16 1.07E+17

Coefficients -4.56E+8 0.106208 0.090507

MS 3.92E+16 1.44E+16

Standard Error 4.68E+9 0.254708 0.080902

F 2.711551

Significance F 0.269429

t Stat P-value Lower 95% -0.097576 0.931166 -2.06E+10 0.417067 0.717133 -0.98969 1.118724 0.379590 -0.25758

Questions A. What does the Adjusted R square tell us about the regression model? B. What does the Significance F tell us about the regression model? C. What does the p-value tell us about the regression model? D. What other analysis can be used to evaluate the relationship Operating Income, PPE, and Total Debt? Answer: A. The Adjusted R square tells us that 46.1% of the Operating Income can be explained by values of the PPE and Total Debt. B. The Significance F value is 0.27 which is higher than 0.05. This means that PPE and Total Debt cannot explain the variations of operating income, so the model is not reliable. C. The p-values for PPE and Total Debt are higher than 0.05, which means that these independent variables are not significant and not good predictors of Operating Income. D. A correlation analysis can be used to determine the data relationships between operating income, PPE, and Total Debt. Diff: 2 LO: 8-5 Bloom: AN Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 493

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101) PingPad is a manufacturer of ping pong paddles. Ping pong paddles have had flat sales in the last few years; however, costs have increased. PingPad would like to prepare an operating profit forecast for the next year using the current year data. Using sensitivity analysis, they would like to forecast the best-case, likely-case and worst-case scenarios. For the best-case scenario, they expect variable costs to increase by 5%; for the likely-case scenario, they expect variable costs to increase by 10%; and for the worst-case scenario, they expect variable costs to increase by 15%. Total fixed costs are expected to be increased by 10% and sales are expected to remain the same. The current year values are as follows:

Total Sales Total Fixed Costs Contribution Margin Total Fixed Costs Operating Profit

Current Values $800,000 $320,000 $480,000 $150,000 $330,000

Question A. What is the net revenue projection for the best-case, likely-case, and worst-case scenarios? B. Are the analysis results valid and reliable? Answer: A. Current Values Best-Case Likely-Case Worst-Case Total Sales 800,000 800,000 800,000 800,000 Total Variable Costs 320,000 336,000 352,000 368,000 Contribution Margin 480,000 464,000 448,000 432,000 Total Fixed Costs 150,000 165,000 165,000 165,000 Operating Profit 330,000 299,000 283,000 267,000 B. The results seem valid since they show what we intended to measure which is net revenue. The results are reliable to the extent that they provide an estimate of the net revenue projection. The results cannot be considered accurate since these scenarios are just projections and should only be used for planning and forecasting purposes. Diff: 2 LO: 8-1, 8-5 Bloom: S Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

494

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102) Denis et Danielle is a food catering business that targets business lunch markets. They deliver the catered lunches within the city's business district. Denis et Danielle has hired you to perform prescriptive analytics to determine what price needs to be charged to achieve certain net income goals. They provided you the variable costs of $85 per order and this represents food costs. They provided you the fixed costs of $150,000, which represents salaries, and delivery vehicle leasing costs. Denis et Danielle has 900 orders per year. Each order serves 12 people. Questions A. What price should be charged per order to breakeven? B. What price should be charged per order to generate a net income of $120,000? C. Was the correct data used in the analysis? Are there other costs factors that should be included in fixed costs and variable costs? Answer: A. Denis et Danielle will need to charge $252 to breakeven. The answer can be solved using the Goal Seek functionality in Excel or it can be done manually using a calculator. Price Per Order Variable Costs Per Order Contribution Margin Per Order # of Orders Contribution Margin Fixed Costs Net Revenue

$252 A=B+C $85 B (given) $167 C=E/D 900 D (given) $150,000 E=F+G $150,000 F (given) $0 G (goal given)

B. Denis et Danielle will need to charge $385 to generate a net income of $120,000. The answer can be solved using the Goal Seek functionality in Excel or it can be done manually using a calculator. Price Per Order Fixed Cost Per Order Contribution Margin Per Order # of Orders Contribution Margin Fixed Cost Net Revenue

$385 A=B+C $85 B (given) $300 C=E/D 900 D (given) $270,000 E=F+G $150,000 F (given) $120,000 G (goal given)

C. Denis et Danielle correctly identified food costs as variable costs, but there could be other costs that should be included such as costs of utensils and delivery costs. They correctly identified salaries and leasing costs as fixed costs, but fixed costs should also include building leasing costs and other overhead costs. Diff: 2 LO: 8-1, 8-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 495

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103) The Bread Factory was founded as a bakery in 1980 and has grown to have more than 200 restaurants in 2020. Most of the restaurants are in the US but there is growth in international locations as well. The marketing department is working on promotional materials for investors to show growth trends in each international country. You are the data analytics manager and you have been asked to determine if the analysis using a stacked bar chart makes sense for showing growth trends in each international country.

As part of the data analysis interpretation process to determine if the analysis make sense, answer the following questions. Questions A. Does the analysis answer the original question or purpose of the analysis? Explain why. B. Was the correct data and appropriate method used to perform the analysis? Explain why. C. What alternative method can be used to show the data. Answer: A. The analysis does not provide clear answers to the original question and does not address the purpose of the analysis. Identifying growth trends by year within each international country cannot be assessed using the stacked bar chart. Because the years are stacked on top of each other for each country, it is difficult to see which country had new restaurants added. B. It appears that the data used is correct and this can be validated using another data source. The method used to perform the analysis is not correct since it does not address the purpose of the analysis. C. A crosstab analysis showing the years and country counts as clustered columns would be more an appropriate method to show the data. This method will show country counts by year so that you can compare they yearly growth within each country. Diff: 2 LO: 8-1, 8-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 496

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Data and Analytics in Accounting, 1e (Dzuranin) Chapter 9 Analysis: Communicating Data Analysis Results 1) Which of the following is not a good suggestion for communicating effectively? A) Understand the audience. B) Focus on the numbers. C) Put the data in context. D) Strive for clarity. Answer: B Explanation: Focus on the message is a good suggestion for communicating effectively, not focus on the numbers or data. It is easy to focus solely on the numbers when communicating data analyses, but the audience is likely more interested in the relationship between the numbers and the message. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 2) Data literacy is A) one of the characteristics of an effective visualization. B) the knowledge of a project's data perspective. C) the communication of the objective of data analysis. D) the ability to understand and communicate data. Answer: D Explanation: Data literacy is the ability to understand and communicate data. Effectively communicating data analysis findings requires data literacy. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 3) The three elements to a data story are A) explain, enlighten, and engage. B) data, analysis, and communication. C) data, narrative, and visuals. D) inform, analyze, and explain. Answer: C Explanation: There are three elements to a data story: Data, narrative, and visuals. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 498

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4) You are explaining company results to a group of managers. You provide a narrative that gives context, you comment on the results of the analysis, and you structure the data to guide the viewer or reader through the analysis. This interaction of two elements of the data story A) educates. B) engages C) enlightens. D) explains. Answer: D Explanation: The interaction of the narrative and the data elements of the data story combine to explain to the audience. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 5) You are explaining company results to a group of managers. You provide a narrative that gives context, you comment on the results of the analysis, and use visuals in the story. This interaction of two elements of the data story A) educates. B) engages. C) enlightens. D) explains. Answer: B Explanation: Combining narrative with visuals engages the audience in the story. A good story can hold the attention of the reader and increase the likelihood of action. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

499

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6) You are explaining company results to a group of managers. You show both the data and visuals that reveal patterns and trends. This interaction of two elements of the data story A) educates. B) engages. C) enlightens. D) explains. Answer: C Explanation: Data intersects with visuals to enlighten the reader with insights. Visualizing the data reveals patterns or trends that may have gone otherwise unnoticed. Humans process visual images 60,000 times faster than text, so visuals matter. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 7) What is Freytag's Pyramid? A) An illustration of the structure of a storytelling arc B) An early model of the standard data analysis process C) A structure developed by Shakespeare in his plays D) A novel method of explaining data analysis results Answer: A Explanation: Freytag's Pyramid, sometimes referred to as a storytelling arc, was developed by the German playwright and novelist Gustav Freytag to understand the structure of Greek and Shakespearian drama. It is one of the most taught dramatic structures in the world. Freytag's pyramid can be applied to data storytelling. Diff: 1 LO: 9-1 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 8) The process of displaying data to provide meaning and insights for the audience is A) data communication. B) data description. C) data explanation. D) data visualization. Answer: D Explanation: Data visualization is the process of displaying data to provide meaning and insights for the audience. Diff: 1 LO: 9-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 500

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9) Complete and consistent data is an important data attribute because A) data may not be representative of the problem. B) data that are free from error are reliable. C) otherwise, data may be too outdated for use. D) otherwise, data viewers might be confused. Answer: D Explanation: Inconsistency in the data could be confusing to the viewers unless they pay close attention to the notations. Data should be consistent across all periods and data should be formatted identically across the periods that are displayed. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 10) Fresh and timely data is an important data attribute because A) data may not be representative of the problem. B) data that are free from error are reliable. C) otherwise, data may be too outdated for use. D) otherwise, data viewers might be confused. Answer: C Explanation: Data is considered fresh if they are the most recent data available. Avoid using outdated data in visualizations because the outdated analysis will not be useful to the users. Data are considered timely if the data are available in time to be used for a visualization. When designing a visualization, ensure that the targeted data are available so that the visualization is fresh. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

501

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11) You are explaining company results to a group of managers. You should A) provide a narrative that gives context, and provide commentary needed to understand the results. B) provide a narrative that gives context, comment on the results of the analysis, and use visuals in the story. C) structure data to guide the viewer or reader through the analysis and provide visualizations that reveal patterns and trends. D) provide a narrative that gives context, comment on the results of the analysis, and structure the data to guide the viewer or reader through the analysis. Answer: D Explanation: The interaction of the narrative and the data elements of the data story combine to explain to the audience. Diff: 2 LO: 9-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 12) You are engaging a group of managers by discussing company results. You should A) provide a narrative that gives context, and provide commentary needed to understand the results. B) provide a narrative that gives context, comment on the results of the analysis, and use visuals in the story. C) structure data to guide the viewer or reader through the analysis and provide visualizations that reveal patterns and trends. D) provide a narrative that gives context, comment on the results of the analysis, and structure the data to guide the viewer or reader through the analysis. Answer: B Explanation: Combining narrative with visuals engages the audience in the story. A good story can hold the attention of the reader and increases the likelihood of action. Diff: 2 LO: 9-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

502

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13) You are enlightening a group of managers about company results. You should A) provide a narrative that gives context, and provide commentary needed to understand the results. B) provide a narrative that gives context, comment on the results of the analysis, and use visuals in the story. C) structure data to guide the viewer or reader through the analysis and provide visualizations that reveal patterns and trends. D) provide a narrative that gives context, comment on the results of the analysis, and structure the data to guide the viewer or reader through the analysis. Answer: C Explanation: Data intersects with visuals to enlighten the reader with insights. Visualizing the data reveals patterns or trends that may have gone otherwise unnoticed. Humans process visual images 60,000 times faster than text, so visuals matter. Diff: 2 LO: 9-1 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 14) When considering the audience of the visualization, which audience is most likely interested in only the most important insights? A) Novice audiences B) Managerial audiences C) Expert audiences D) Executive audiences Answer: D Explanation: An audience composed of executives will be interested in only the most important insights. Discuss the important insights first, then discuss the support for those insights. Diff: 1 LO: 9-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

503

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15) Which visualization audience is most likely looking for actionable results? A) Department managers B) Industry experts C) New employees D) The CEO, CFO, and COO Answer: A Explanation: A managerial audience is looking for actionable results, so the visualization should include recommendations for actions based on the results. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 16) You are preparing for an oral presentation for the tax partners at your firm. You are sharing the revenue projections based on engagements booked for the next tax year. What practice should you follow for your presentation? A) Share three main points per chart. B) Prepare handouts to the tax partners so that they can see the details of the data during the presentation. C) Look at the tax partners during the presentation and not at your slides. D) Use data tables in the slides so that tax partners can see exact values of your revenue projections. Answer: C Explanation: Look at tax partners during the presentation and not at your slides. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

504

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17) Which of the following is a best practice that is being violated for the pie graph chart?

A) The labels for each pie slice should show the location. B) The colors for each pie slice should be distinct. C) Limit the chart to a maximum of five segments. D) The pie slices should be order by largest to smallest. Answer: C Explanation: Limit the chart to a maximum of five segments. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 18) A specific example that describes the visualization objective of distributions is: A) Is there a relationship between labor hours and overtime? B) Is there a seasonal pattern in expenses? C) Are there transactions that might be considered outliers? D) How much revenue has each region contributed to total revenue? Answer: C Explanation: Distributions reveal how data is spread out or grouped. Whether there are transactions that might be considered outliers is a specific example of a distribution objective. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 505

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19) A specific example that describes the visualization objective of composition is: A) Is there a relationship between labor hours and overtime requirements? B) Is there a seasonal pattern in expenses? C) Are there transactions that might be considered outliers? D) How much revenue does each region contribute to the total? Answer: D Explanation: Composition shows how part of the data compares to the whole. The amount of revenue each region contributed to the total is a specific example of a composition objective. Diff: 1 LO: 9-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 20) A specific example that describes the visualization objective of trends is: A) Is there a relationship between labor hours and overtime? B) Is there a seasonal pattern in expenses? C) Are there transactions that might be considered outliers? D) How much revenue has each region contributed to total revenue? Answer: B Explanation: Trends display patterns in the data. the seasonal pattern in expenses is a specific example of a trend's objective. Diff: 1 LO: 9-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 21) You are analyzing the performance of several product lines for a client. If the purpose of your visualization is composition, which of the following is the best visualization to use? A) A stacked bar chart showing the net profit provided by each product line this year B) A line graph showing how the quantity manufactured drives total cost of each product line C) A scatterplot showing net profit and total costs for individual products lines over time D) A bar chart showing net profit for each product line this year and last year Answer: A Explanation: A stacked bar chart will show the composition of the net profit. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

506

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22) You are analyzing the performance of several product lines for a client. If the purpose of your visualization is relationships, which of the following is the best visualization to use? A) A bar chart showing the comparative net profit provided by each product line this year B) A line graph showing how the quantity manufactured drives total cost of each product line C) A scatterplot showing net profit and total costs for individual products lines over time D) A bar chart showing net profit for each product line this year and last year Answer: B Explanation: A line graph of quantity versus total cost of each product line shows the relationships between these two variables. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 23) You are analyzing the performance of several product lines for a client. If the purpose of your visualization is distributions, which of the following is the best visualization to use? A) A bar chart showing the comparative net profit provided by each product line this year B) A line graph showing how the quantity manufactured drives total cost of each product line C) A scatterplot showing net profit and total costs for individual products lines over time D) A bar chart showing net profit for each product line for this year and last year Answer: C Explanation: A scatterplot showing net profit and total costs for individual product lines will reveal how spread out or grouped the data are. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 24) You are analyzing the performance of several product lines for a client. If the purpose of your visualization is comparisons, which of the following is the best visualization to use? A) A bar chart showing the comparative net profit provided by each product line this year B) A line graph showing how the quantity manufactured drives total cost of each product line C) A scatterplot showing net profit and total costs for individual products lines over time D) A bar chart showing net profit for each product line for this year and last year Answer: D Explanation: A clustered column chart showing net profit for each product line this year and last year allows for the comparison between groups of data, both product lines and different years. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 25) You are presenting a visualization about product line performance to employees of a major 507

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retailer. You explain that the company was started five years ago with a focus on kitchenware but has expanded in the past year to include product lines such as small kitchen appliances, kitchen tools, kitchen and dining linens, bed and bath linens, and small home (non-kitchen) appliances. This presentation is most appropriate for A) executive audiences. B) expert audiences. C) managerial audiences. D) novice audiences. Answer: D Explanation: Unlike other audiences, the novice audience will need basic and background information about the company and the product lines because they are not very likely to have this already. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 26) Sam is presenting a visualization about product line performance to employees of a retailing company. She recommends the company drop two product lines that have resulted in losses for the past four quarters, and the company should expand two product lines that have produced the highest profit margins. This presentation is most appropriate for A) executive audiences. B) expert audiences. C) managerial audiences. D) novice audiences. Answer: C Explanation: A managerial audience already has some knowledge of the topic. This audience is looking for actionable results, so a visualization that includes recommendations for actions based on the results is exactly what they want. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

508

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27) Johanna is presenting a visualization about department performance to employees of a retailing company. Her presentation includes variances in expenses, revenues, and profit margins for each department and identifies anomalies that warrant additional research. This presentation is most appropriate for A) executive audiences. B) expert audiences. C) managerial audiences. D) novice audiences. Answer: B Explanation: Experts already have deep knowledge about the subject of the analysis. Instead, they are interested in the investigative aspect of the story. The variances and anomalies warranting more research will be most interesting to this sort of audience. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 28) Dale is presenting a visualization about company performance to employees of a manufacturing company. In their presentation, Dale highlights the product lines that are performing the best and those that are performing the worst, as well as company segments that are controlling costs well and those that are having major cost overruns. Dale also provides data backing up these highlights. This presentation is most appropriate for A) executive audiences. B) expert audiences. C) managerial audiences. D) novice audiences. Answer: A Explanation: An audience composed of executives will be interested in only the most important insight, such as which product lines and segments are performing the best and the worst. For this audience, you should discuss the important insights first, then discuss the support for those insights. Diff: 2 LO: 9-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

509

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29) Turbo Motors would like to analyze sales by year and salespeople. The following stacked bar chart was created for your review. What would you recommend?

A) A different visualization should be used since there are too many salespeople. B) A 100% stacked bar should be used to make better comparisons between salespeople. C) A horizontal bar chart should be used to make better comparisons between salespeople. D) The colors used should be more distinct. Answer: A Explanation: Stacked bar charts are best used when there are not too many subcomponents. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

510

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30) You are preparing a visualization about company division performance. Each bar is labeled with division revenues in thousands of dollars. The visual is a single color. The divisions are presented in alphabetical order. The title is at the top. There is no background color. Which preattentive attribute still needs the most attention? A) Clutter B) Color C) Size D) Title Answer: B Explanation: Use color to highlight or alert the reader to focus on something specific in the visualization. For example, highlight the divisions with net losses or with the best performance, whichever is key to your presentation. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 31) Jumper Manufacturing would like to analyze the distribution of salaries among its production managers. The following chart was created for your review. What would you recommend?

A) A pie chart should be used since it's a better visualization to show distributions. B) The chart should have between 5 to 15 salary bins. C) The chart title is too vague and should be more descriptive. D) Each bar should be in a different color. Answer: A Explanation: Histogram charts should have between 5-15 bins. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 511

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32) What are Gestalt principles of visual perception? A) They describe how data and information are presented visually by most software. B) They explain how humans gain meaningful perceptions from stimuli around them. C) They illustrate how the eyes of humans gather light and color to actually see data. D) They interpret the output of data analysts' statistical models for the end users. Answer: B Explanation: Gestalt principles of visual perception describe how humans gain meaningful perceptions from the stimuli around them. These principles address the natural need for humans to find order. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 33) The law of continuity A) states that a viewer pays attention to whatever stands out visually. B) states that lines are perceived as going further along the same path. C) states that closeness of visual objects impacts peoples' perceptions. D) states that matching objects tend to be perceived as a whole group. Answer: B Explanation: The law of continuity refers to how people tend to perceive any line as continuing in its established direction and objects that are aligned with each other are perceived as a single path or shape. We follow lines, curves, or a sequence of shapes to determine if there is a relationship between the elements. Effective data visualizations will arrange visual objects in a line to simplify grouping and comparison. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

512

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34) The law of similarity A) states that a viewer pays attention to whatever stands out visually. B) states that lines are perceived as going further along the same path. C) states that closeness of visual objects impacts peoples' perceptions. D) states that matching objects tend to be perceived as a whole group. Answer: D Explanation: The law of similarity states that similar elements tend to be perceived as a unified group. Items similar in color, shape, size, or location evoke the perception that they belong to the same group. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 35) The law of proximity A) states that a viewer pays attention to whatever stands out visually. B) states that lines are perceived as going further along the same path. C) states that closeness of visual objects impacts peoples' perceptions. D) states that matching objects tend to be perceived as a whole group. Answer: C Explanation: The law of proximity states that people will perceive visual elements based on how closely they are positioned to one another. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 36) The law of focal point A) states that a viewer pays attention to whatever stands out visually. B) states that lines are perceived as going further along the same path. C) states that closeness of visual objects impacts peoples' perceptions. D) states that matching objects tend to be perceived as a whole group. Answer: A Explanation: The law of focal point refers to how a viewer will be more attentive to whatever stands out visually. The focal point tends to be the starting point for the viewer. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

513

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37) You are preparing a visualization about total expenses of various manufacturing departments. The title is at the top. There is no background color. The visual is a single color. Each bar is labeled with the number of units of product sold. The y axis is labeled at intervals of $10,000. Gridlines are shown at each $10,000 interval. The departments are presented in order from highest to lowest expenses. Which preattentive attribute still needs the most attention? A) Clutter B) Color C) Size D) Title Answer: A Explanation: Since the bars are labeled individually, there is no need for a y axis or gridlines. In this case those are just clutter. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 38) You have prepared a columnar bar chart of annual sales figures for each of several geographic sales divisions of a large lumber company. The divisions have been organized left to right in descending order of the number of board feet (in millions) of lumber sold by each division. You highlighted the southeast sales division with a brighter color than the others which is an example of applying the Gestalt principle of visual perception known as the A) law of continuity. B) law of focal point. C) law of proximity. D) law of similarity. Answer: B Explanation: The law of focal point refers to how a viewer will be more attentive to whatever stands out visually. The focal point tends to be the starting point for the viewer. You have applied this law by highlighting the geographic sales division on which you want your viewers to focus. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

514

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39) You have prepared a columnar bar chart of annual sales figures for each of several geographic sales divisions of a large lumber company. You organized the divisions left to right in descending order of the number of board feet (in millions) of lumber sold by each division, which is an example of applying the Gestalt principle of visual perception known as the A) law of continuity. B) law of focal point. C) law of proximity. D) law of similarity. Answer: A Explanation: You have followed the law of continuity by sorting the bars from highest to lowest rather than having them in some other order, such as alphabetical, that doesn't provide a line or curve to follow. The law of continuity explains how people follow lines, curves, or a sequence of shapes to determine if there is a relationship between the elements. Effective data visualizations arrange visual objects in a line to simplify grouping and comparison. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 40) You have prepared a columnar bar chart of quarterly revenues of each of several geographic sales divisions of a large lumber company showing the number of board feet (in millions) of lumber sold by each division in each quarter. Each sales division is illustrated with a different color and each division's four quarters of data (bars) are grouped together. This grouping is an example of applying the Gestalt principle of visual perception known as the A) law of continuity. B) law of focal point. C) law of proximity. D) law of similarity. Answer: D Explanation: The law of similarity states that similar elements tend to be perceived as a unified group. Items similar in color, shape, size, or location evoke the perception that they belong to the same group. Grouping the quarters of date for each division allows the comparison of geographic division performance over time. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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41) You have prepared a columnar bar chart of annual sales figures for each of several geographic sales divisions of a large lumber company. You want to apply the Gestalt principle of visual perception known as the law of continuity. You should A) highlight the sales division of interest with a brighter color than the other divisions. B) organize the divisions left to right in descending order of the number of lumber board feet sold. C) position similarly performing divisions close together, especially if there are many. D) show each division in a different color and group a division's four quarters of data together. Answer: B Explanation: You have followed the law of continuity by sorting the bars from highest to lowest rather than having them in some other order, such as alphabetical, that doesn't provide a line or curve to follow. The law of continuity explains how people follow lines, curves, or a sequence of shapes to determine if there is a relationship between the elements. Effective data visualizations arrange visual objects in a line to simplify grouping and comparison. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 42) You have prepared a columnar bar chart of quarterly revenues of each of several geographic sales divisions of a large lumber company showing the number of board feet (in millions) of lumber sold by each division in each quarter You want to apply the Gestalt principle of visual perception known as the law of proximity. You should A) highlight the sales division of interest with a brighter color than the other divisions. B) organize the divisions left to right in descending order of the number of lumber board feet sold. C) position similarly performing divisions close together, especially if there are many. D) show each division in a different color and group a division's four quarters of data together. Answer: C Explanation: The law of proximity states that people will perceive visual elements based on how closely they are positioned to one another. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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43) Which Gestalt principle of visual perception helps readers make sense of a large set of data very quickly? A) Law of continuity B) Law of focal point C) Law of proximity D) Law of similarity Answer: C Explanation: The law of proximity states that people will perceive visual elements based on how closely they are positioned to one another. The law of proximity helps readers make sense of a large set of data very quickly. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 44) Visual properties we notice without realizing it are A) nonvisual perceptions. B) preattentive attributes. C) similar visual elements. D) the focal attributes. Answer: B Explanation: Preattentive attributes are visual properties we notice without realizing it. Size, color, and position are preattentive attributes in visualizations that can be used to direct the audience's attention. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 45) If a bar of data is colored with two sequential colors and a neutral midpoint, it is useful for showing gains and losses. This type of color scale is called A) categorical. B) diverging. C) highlight. D) sequential. Answer: B Explanation: In a diverging scale there are two sequential colors with a neutral midpoint. This type of scale is useful for showing gains and losses. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 517

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46) Which of the following is most useful for showing amounts ranging from low to high? A) A bar of data colored one color that blends from light to dark B) A bar of data colored with two sequential colors and a neutral midpoint C) A bar of data highlighted with a color contrasting with other bars D) A bar of multiple contrasting colors Answer: A Explanation: In a sequential scale, color is ordered from low to high and it uses light to dark shades of one color. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 47) Which of the following is most useful for highlighting a number of amounts for comparison? A) A bar of data colored one color that blends from light to dark B) A bar of data colored with two sequential colors and a neutral midpoint C) A bar of data highlighted with a color contrasting with other bars D) A bar of multiple contrasting colors Answer: D Explanation: In a categorical color scale, there are contrasting colors for individual comparison. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 48) You want to alert the reader to something specific in a visualization. What color method will be helpful? A) Categorical B) Diverging C) Highlight D) Sequential Answer: C Explanation: Highlight color can alert the reader to focus on something specific in the visualization. This usually means using a contrasting color on the items of importance relative to all the other elements. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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49) Which of the following is most useful for focusing the viewer on something specific in a visualization? A) A bar of data colored one color that blends from light to dark B) A bar of data colored with two sequential colors and a neutral midpoint C) A bar of data highlighted with a color contrasting with other bars D) A bar of multiple contrasting colors Answer: C Explanation: Highlight color can alert the reader to focus on something specific in the visualization. This usually means using a contrasting color on the items of importance relative to all the other elements. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 50) Which of the following is not an important characteristic of a good title for a visualization? A) Factual B) Lengthy C) Neutral D) Noun Answer: B Explanation: All visualizations should include a factual and neutral title and avoid using unnecessary descriptive words. The title should have nouns that represent what was measured and when. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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51) You have created a visualization showing net sales performance in 2024 for the four product lines your company sells. The best title for this visualization is A) Net Sales by Product Line — 2024. B) Net Sales of Four Product Lines for the Year. C) Product Line Net Sales Over Time. D) Product Line Performance — 2024. Answer: A Explanation: All visualizations should include a factual and neutral title and avoid using unnecessary descriptive words. The title should have nouns that represent what was measured and when. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 52) You want to illustrate the composition of total sales over several years by showing the proportion of sales that is made up by each of four product lines. You prepare five consecutive pie charts representing each of five years of data. What is a better visualization for this purpose? A) Area chart B) Tree map chart C) Bubble chart D) Pie chart Answer: A Explanation: An area chart can easily show the composition of total sales over time, rather than using one pie chart for each year. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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53) You want to illustrate the composition of total revenues over several years by showing the proportion of sales that is made up by each of six product lines. You prepare an area chart illustrating five years of data. What is a better visualization for this purpose? A) Area chart B) Column chart C) Histogram chart D) Pie chart Answer: B Explanation: Use a column chart rather than an area chart when illustrating more than four categories. This avoids confusion and clutter. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 54) You want to illustrate the relationships between three data fields for each product line: total sales, sales growth, and market share. You have prepared a scatter chart to illustrate these relationships. What is a better visualization for this purpose? A) Area chart B) Bar chart C) Bubble chart D) Pie chart Answer: C Explanation: A bubble chart makes sense when the data have three dimensions. A scatter chart fits when the data have only two dimensions. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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55) You want to illustrate the relationships between two data fields for each cost, X and Y. You have prepared a bubble chart to illustrate these relationships. What is a better visualization for this purpose? A) Area chart B) Bar chart C) Bubble chart D) Scatter chart Answer: D Explanation: A bubble chart makes sense when the data have three dimensions. A scatter chart fits when the data have only two dimensions. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 56) You want to illustrate the relative share of total costs that is provided by four manufacturing cost categories. You have prepared a tree map to illustrate these relationships. What is a better visualization for this purpose? A) Area chart B) Bar chart C) Bubble chart D) Pie chart Answer: D Explanation: A pie chart is useful for five or fewer segments. A tree map is useful for larger numbers of segments and when precise comparisons are not needed. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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57) A bar graph visualization that misleads by making the data look like it has more differences across categories than it really does is an example of misleading by A) manipulating the y-axis. B) omitting the baseline. C) selectively picking data. D) using the wrong graph. Answer: B Explanation: Always be sure to graph data with a zero baseline to avoid misleading the audience. Starting the graph from a number higher than zero is likely to imply alarming differences in the categories shown. This is, of course, unethical. Diff: 2 LO: 9-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 58) A company accountant prepares a bar graph visualization illustrating total monthly profits over several years. To make the data look like profits are increasing at a greater rate than they really are, the accountant will probably choose to A) manipulate the y-axis. B) omit the baseline. C) selectively pick the data. D) use the wrong graph. Answer: B Explanation: Always be sure to graph data with a zero baseline to avoid misleading the audience. Starting the graph from a number higher than zero is likely to imply alarming differences in the categories shown. This is, of course, unethical. Diff: 2 LO: 9-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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59) A line graph visualization that misleads by making the data look more or less volatile is an example of misleading by A) going against conventions. B) manipulating the y-axis. C) omitting the baseline. D) using the wrong graph. Answer: B Explanation: Manipulating the scale on the y-axis can affect how the data is interpreted. Expanding or compressing the scale on the y-axis can make changes in the data seem more or less significant. This is, of course, unethical. Diff: 1 LO: 9-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 60) A company's Chief Operating Officer (COO) prepares a line graph visualization illustrating total monthly operational costs over several years. The COO wants to make the data look less volatile than it really is, therefore, they will probably choose to A) go against conventions. B) manipulate the y-axis. C) omit the baseline. D) use the wrong graph. Answer: B Explanation: Manipulating the scale on the y-axis can affect how the data is interpreted. Expanding or compressing the scale on the y-axis can make changes in the data seem more or less significant. To make the line look less volatile, the y-axis can include a much higher number than the highest number of data shown. This is, of course, unethical. Diff: 2 LO: 9-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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61) A company's head of marketing prepares a tree map illustrating net profit ($) figures for each product the company sells, unfortunately it hasn't been a good year and the majority of products have a net loss. As often suggested, he uses shades of blue and orange. The products with net loss are shown in shades of blue and the products with net profit are shown in shades of orange. In order to make the company look better in the visualization, the head of marketing chose to A) go against conventions. B) manipulate the y-axis. C) omit the baseline. D) use the wrong graph. Answer: A Explanation: This is an example of what happens when a standard is violated. Normally with financial data, red (or orange, in this case) is used to identify negative numbers. By flipping that convention, the emphasis will be on the fewer products that are showing as shades of orange, which are the few products that are performing with a positive net profit. Of course, this is unethical. Diff: 3 LO: 9-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 62) A company's accountant prepares a tree map illustrating net profit ($) figures for each department, unfortunately it hasn't been a good year and the majority of departments have a net loss. As often suggested, shades of blue and orange are used. The products with net profit are shown in shades of blue and the products with net loss are shown in shades of orange. Lighter shades indicate higher numbers. In order to make the company look better in the visualization, the accountant chose to A) go against conventions. B) manipulate the y-axis. C) omit the baseline. D) selectively pick the data. Answer: A Explanation: This is an example of what happens when a standard is violated. Normally darker shades are used to indicate higher numbers in a color scale. By flipping that convention, the visualization will be misleading. Of course, this is unethical. Diff: 3 LO: 9-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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63) A manager illustrates how products have sold from one year to the next using pie charts, one for each year, showing each product's sales for the year. There are four products shown in each pie chart. This visualization may be misleading for the viewer because the manager has chosen to A) manipulate the y-axis. B) omit the baseline. C) selectively pick the data. D) use the wrong graph. Answer: D Explanation: Sometimes choosing the wrong type of graph can make it difficult to interpret the data and results in misleading the viewer. Choosing a visualization that it is not appropriate for the type of data or analysis results being reported makes it difficult for the audience to interpret the message. If the objective is to show a comparison of how each product line performed by year, a bar chart is a better choice. Diff: 3 LO: 9-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 64) An accountant is illustrating relative size of the total sales generated by 12 different product lines. Precise comparisons are not important. A colorful pie chart is used. This visualization may be misleading for the viewer because the manager has chosen to A) go against conventions. B) manipulate the y-axis. C) selectively pick the data. D) use the wrong graph. Answer: D Explanation: Unfortunately, this is the wrong graph for this application. It is difficult for the human eye to interpret proportions in a pie chart. Since precise comparisons are not important in this instance and there are more than 5 products, a tree map is a better visualization choice. Diff: 3 LO: 9-4 Bloom: S Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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65) Since visualizations can have significant influence on how data is used to make decisions, A) there are many rules to follow about presenting visualizations. B) there is an ethical obligation to not mislead the viewer. C) they should be designed to manipulate the viewer's perception. D) they should be designed to show the company in the best light. Answer: B Explanation: Ethics and data visualization best practices are intertwined. Because visualizations can significantly influence how data are used to make decisions, there is an ethical obligation to not mislead the viewer. Diff: 2 LO: 9-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 66) A visualization that allows users to explore, manipulate and interact with graphical representations of data is A) a functionally static visualization. B) a potentially misleading visualization. C) a type of bar chart illustration. D) an interactive data visualization. Answer: D Explanation: An interactive data visualization is a visualization that allows users to explore, manipulate, and interact with graphical representations of data. Diff: 1 LO: 9-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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67) An accountant created a visualization showing company profits for each of two years rather than showing monthly profits for the two-year period. This visualization looks like profits are steadily increasing. The variation in profits across the months is unseen. This is misleading because the accountant has chosen to A) go against conventions. B) manipulate the y-axis. C) omit the baseline. D) selectively pick the data. Answer: D Explanation: Including only some data points in a visualization may create a false impression of the data. In this example, the profits appear to be increasing steadily when in fact they are not at all smooth over time. Diff: 2 LO: 9-4 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 68) Which of the following is an important characteristic of a good title for a visualization? Select all that apply. A) Factual B) Lengthy C) Neutral D) Noun Answer: A, C, D Explanation: All visualizations should include a factual and neutral title and avoid using unnecessary descriptive words. The title should have nouns that represent what was measured and when. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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69) Which of the following is a best practice for bar and column charts? Select all that apply. A) Always have a zero baseline for the y-axis. B) Compare 2-7 categories with horizontal bars. C) Use color sparingly or as an accent only. D) Use horizontal labels for better readability. Answer: A, C, D Explanation: Compare 2-7 categories with vertical bars, not horizontal bars. With more than 7 categories, use horizontal bars. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 70) Which of the following is a best practice for bubble charts? Select all that apply. A) Choose an appropriate bubble baseline. B) Don't use bubbles if they are all similar in size. C) Label bubbles and make sure they are visible. D) Scale bubble size by area and not diameter. Answer: B, C, D Explanation: There's no such thing as a bubble baseline. However, zero baselines are important in many charts. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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71) Which of the following is a best practice that is being violated for the area chart? Select all that apply.

A) Highly variable data is at the top. B) Limit to 6 categories. C) Start the y-axis at zero. D) Use color sparingly. Answer: A, C Explanation: In an area chart, usually each category is a different color. The color helps the reader. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 72) Which of the following is a best practice for histogram charts? Select all that apply. A) Bins are numbers that represent the intervals into which the data will be grouped. B) Bins define the groups used for the frequency distribution. C) Generally, include between 5-15 bins in the histogram chart. D) Put highly variable data on the top and low variability on the bottom. Answer: A, B, C Explanation: "Put highly variable data on the top and low variability data on the bottom" is not a best practice for histogram chart. It applies to area charts. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 530

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73) Which of the following is a best practice that is being violated for the line graph chart? Select all that apply.

A) Title should be positioned at the top left. B) Time runs from right to left. C) Use a zero baseline. D) Use dotted lines, not solid lines. Answer: A, C Explanation: Baseline should not start at 300 and title should not be top right. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 74) Which of the following is a best practice for scatter charts? Select all that apply. A) Data set should be in independent/dependent variable pairs. B) Do not use if there are only a few pieces of data. C) Use if order is not relevant — otherwise use a line graph. D) Use if there is no correlation between the variables. Answer: A, B, C Explanation: Do not use if there are only a few pieces of data or if there is no correlation. Diff: 2 LO: 9-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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75) Which of the following is true of accurate data? Select all that apply. A) Accurate data is free from errors. B) Accurate data is fresh and timely. C) Accurate data is reliable. D) Accurate data is representative of the problem. Answer: A, C, D Explanation: Accurate data is free from errors. They are reliable and representative of the problem or issue being visualized. Recency and timeliness are not directly related to accuracy. Data can be quite ancient and still be accurate. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 76) Which of the following is a characteristic of an interactive data visualization? Select all that apply. A) It helps connect the presenter with the audience. B) It allows the user to drill down into the data. C) It allows for quick answers to audience questions. D) It provides the presenter's view of the data. Answer: A, B, C Explanation: Interactive data visualization is not limited to live presentations. In general, the more interactive the visual, the more engaged the user will be regardless of the communication medium. Diff: 1 LO: 9-5 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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77) The benefit of interactive data visualization is that it allows engagement with the data rather than a static presentation. An interactive visualization helps users with which of the following? Select all that apply. A) Efficiently identify relationships. B) Provide useful storytelling. C) Quickly identify trends. D) Understand simple data. Answer: A, B, C Explanation: An interactive visualization helps users simplify complex data (not understand simple data). Diff: 1 LO: 9-4 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation 78) Which of the following is a best practice for a tree map? Select all that apply. A) Appropriate when precise comparisons are unimportant. B) Boxes can be labeled either with text or numbers. C) Bright, contrasting colors easily define each box. D) Data set has independent/dependent variable pairs. Answer: A, B, C Explanation: "Data set has independent/dependent variable pairs" does not apply to a tree map, but rather to a scatter chart. Diff: 1 LO: 9-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: FC: Measurement, Analysis, and Interpretation

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79) Discuss the three data attributes that should be considered when verifying the data. Answer: 1. Accurate Data: Accurate data is free from errors. Data is reliable and representative of the problem or issue being visualized. 2. Data Completeness: Data is complete when there is no missing data. 3. Data Consistency: Data should be consistent across all periods. For example, data should be formatted identically across the periods that are displayed. 4. Fresh Data: Data is considered fresh if it is the most recent data available. Avoid using outdated data in visualizations. 5. Timely Data: Data is considered timely when it is available in time to be used for a visualization. Diff: 1 LO: 9-2 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 80) Discuss five best practices when creating bar charts. Answer: 1. Use horizontal bars if there are more than 7 categories or long category labels. 2. Use horizontal labels for better readability. 3. Space bars appropriately and consistently. 4. Use color sparingly, or as an accent. 5. Always have a zero baseline (the y-axis begins at zero). 6. Compare 2-7 categories with vertical columns. Diff: 1 LO: 9-3 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 81) Discuss four best practices when creating pie charts. Answer: 1. Most impactful with small data sets. 2. Best to use when showing differences within groups based on one variable. 3. Ensure the data adds to 100%. 4. Limit the chart to a maximum of five segments. 5. Start the first segment at 12 o'clock position. Diff: 1 LO: 9-3 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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82) Explain astigmatism. What is a best practice for creating visualizations for people with the astigmatism condition? Answer: Astigmatism is a visual condition where there is a refractive error that impedes the eye from focusing light evenly on the retina. According to the World Health Organization (WHO), 43% of the population have this condition. A best practice is to avoid using a black background because, although it might look striking, a black background can make lighter colors and words appear blurry to anyone with an astigmatism. Diff: 1 LO: 9-3 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 83) What are preattentive attributes? Discuss the four attributes. Answer: Preattentive attributes are visual properties we notice without realizing it: 1. Size: Relative size is interpreted as relative importance. 2. Color: Use color sparingly and consistently. 3. Position: People typically start at the top left corner of a visualization and then scan it in a zig-zag motion. Put important information at the top left of a visualization. 4. Titles: Titles should be factual and neutral. Avoid using unnecessary descriptive words. Titles should include nouns that represent what was measured and when. Diff: 1 LO: 9-3 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 84) Identify the four categories of audiences that should be considered when creating visualizations. Discuss what each audience would like to know from the visualizations. Answer: Audiences can be separated into four categories: novice, managerial, expert and executive. 1. Novice audiences want enough detail to gain understanding. 2. Managerial audiences want actionable results. 3. Expert audiences want investigation and discovery. 4. Executive audiences are interested in the most important insights. Diff: 1 LO: 9-2 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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85) Explain the law of similarity as it applies to data visualization. Provide an example of how the law of similarity can be applied within an accounting context. Answer: The law of similarity states that similar elements tend to be perceived as a unified group. Items similar in color, shape, size, or location evoke the perception that they belong to the same group. For example, to compare sales of vehicles by fiscal quarter, a clustered bar chart can be created to cluster the vehicle model together so that performance by quarter can be compared for each model. Diff: 2 LO: 9-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 86) What is the Freytag's pyramid? Identify the five components of the pyramid. How can each component be applied to data storytelling? Answer: Freytag's pyramid, also sometimes referred to as a storytelling arc. The pyramid was developed by the German playwright and novelist Gustav Freytag to understand the structure of Greek and Shakespearian drama. The five components are exposition, rising action, climax, falling action, and resolution. Exposition: Introduce the problem or issue. Rising Action: The subject of the analysis is explored at a deeper level. Climax: The main finding or insight is shared. This is the "aha moment" of the story. Falling Action: Share the solution. Resolution: Conclude the story and provide next steps. Diff: 1 LO: 9-1 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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87) What are interactive data visualizations? Discuss three benefits of using interactive data visualization? Answer: An interactive data visualization is a visualization that allows users to explore, manipulate, and interact with graphical representations of data. They help connect the presenter with the audience by drilling down into the data based on the audience's needs. This allows the presenter to quickly answer any questions from the audience. The benefit of interactive data visualization is that it allows users to • Quickly identify trends. • Efficiently identify relationships. • Provide useful data storytelling. • Simplify complex data. Diff: 1 LO: 9-5 Bloom: C Min.: 7 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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88) Star Source provides natural gas and electricity services. They are looking to increase their social and sustainability impact since investors are applying these non-financial measures as part of the risk analysis and growth opportunities. The three initiatives are: • investments in research and development in green technology • donation of profits to the local economy • allocation of time for employees to volunteer for environmental or social causes. You are a financial accountant, and you need to present a data analysis of the costs and benefits for each of the initiatives to the CFO and the Controller. Describe why each of the following are important to consider and give an example of each. 1. Identify the audience. 2. Focus on the message, not the numbers. 3. Put the data in context. 4. Make it easy to understand. 5. Create a memorable story. Answer: 1. Provide enough background and explanation so the audience can follow the presentation. In this case, the CEO and Controller are the audiences. They will need to understand the costs involved and how that will affect profitability. 2. The CFO and Controller want to know at a high-level the costs and benefits of each of the initiatives. The numbers will be important if they ask for the details. 3. First, there is the context of the overall objective of the analysis, which is to understand the costs involved and the benefits gained for initiative. There is also context of the individual analyses. For example, the CEO will be interested in communicating its social and environmental impact to its customers and investors. The Controller will be interested in the cost impacts since it may affect profitability. 4. Clearly explain the data and the results. Make communication easy to understand by using effective visualizations. In this example, it may make sense to create visualizations of the projected costs involved. Since the audience is senior leadership, visualizations will be more effective than data tables. 5. Engaging the audience with a data story makes it easier for the CEO and Controller to remember the results. The story in this example could focus on the potential increase in customers and investors due to the company's investments in social and environment initiatives. Diff: 2 LO: 9-1 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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89) Providence Commercial Trust is a bank with employees across the country. The IT department has been tracking phishing emails to see if there are any trends. Due to recent increases in phishing emails, IT has implemented some phishing email monitors so that potential phishing emails are flagged. You are an AIS accountant, and you performed descriptive analysis on the trends. Create a data story using each structure element of Freytag's pyramid.

Answer: Exposition

Rising Action

Climax

Falling Action Resolution

Phishing emails is an on-going problem at Providence Commercial Trust. Phishing emails can lead to data breaches and financial losses for the company. Due to recent increases in phishing emails, IT has implemented some phishing email monitors so that potential phishing emails are flagged. Data analysis is needed to determine if these email monitors are effective in reducing security risks. Based on the results of the analysis, the number of phishing emails increased in the spring months but remained steady for the rest of the year. However, the number of opened phishing emails dramatically dropped after June. The phishing email monitors appear to be effective in reducing the number of opened phishing emails. The phishing email monitors should be continually reviewed and updated. Data analysis should be used to continuously monitor phishing email trends.

Diff: 2 LO: 9-1 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 539

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90) Western Ridge College provides credit cards (PCards) to their staff and faculty to make business purchases. You are an internal auditor for the college, and you are performing audit tests. The audit tests will require data analysis, and you are preparing the data visualizations and will communicate the results. For each audit test, define the objective (composition, trends, relationship, etc.) and state the appropriate visualization that could be used for each analysis. Audit Test Objective Transaction count and totals on a monthly basis. Transaction values to identify unusual transactions. Proportion of the transaction count based on each transaction currency. There are five currencies used. Comparison between monthly transaction values from current year to previous year. Compare the number of transactions based on dollar threshold (e.g., $0 $999, $1,000 - $1,999, etc.) Answer: Audit Test Objective Transaction count and totals on a Trends monthly basis. Transaction values to identify unusual Distribution or transactions. relationship. Composition Proportion of the transaction count based on each transaction currency. There are five currencies used. Comparison Comparison between monthly transaction values from current year to previous year. Compare the number of transactions Distribution based on dollar threshold (e.g., $0 $999, $1,000 - $1,999, etc.)

Possible Visualization

Possible Visualization Bar or Line Scatterplot Pie

Line

Histogram

Diff: 2 LO: 9-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

540

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91) MCL Partners specializes in estate planning and tax services. Senior partners would like to see where the estate funds are being allocated. They are interested in comparing the percentage between the last three years. The junior tax accountant has created three bar charts for your review.

1. Identify potential issues or problems with the visualizations. 2. What visualization should be used to meet the objectives of the senior partners? Discuss why your suggested improvements are necessary. 3. Prepare the correct visualization using visualization best practices.

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Answer: 1. The pie chart has eight segments which goes against the best practice of having five segments or less. Since there is a need to show differences based on year, using a pie chart is not useful since it's difficult to compare by year. 2. The visualization should use a bar chart which has the recipients grouped into clusters so that the years can be compared within each recipient cluster. The bar chart will allow the recipient percentage to be compared by year and allow trends to be seen. This clustering by recipients follows the law of continuity. 3. The following bar chart is used to show yearly trends by recipient.

Diff: 2 LO: 9-2, 9-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

542

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92) Eco Action is a not-for-profit organization whose mission is to use legal action to defend nature and protect environmental rights. The annual report to stakeholders requires a visualization of its sources of funding. The objective of the analysis is to compare the value differences between the funding sources. The following visualization has been created.

1. Identify potential issues or problems with the visualization. 2. What visualization should be used to meet the objectives of the analysis. Discuss why your suggested improvements are necessary. 3. Prepare the correct visualization using visualization best practices. Use the law of focal point to highlight Major Donors.

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Answer: 1. The tree map is appropriate when precise comparisons are not important. A tree map is not appropriate since the objective is to compare the difference between the funding sources. The colors are not contrasting, so it is difficult to distinguish between funding sources. The segments should have the funding source description to make it easy to associate the funding sources and its value. 2. A bar chart should be used instead of a tree map. The bar chart will allow for a better comparison of the funding sources. Using the law of continuity, the bars can be sorted from highest to lowest. 3. Below is the visualization that meets the objectives of the analysis.

Diff: 2 LO: 9-2, 9-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

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93) You are an internal auditor at Education Sense, an education technology company. Most of the employees are working remotely, and they are instructed to purchase their own equipment and supplies, and which they can expense later. Purchases are reviewed and approved by department managers prior to the reimbursement of the expenses. The following dashboard was created.

1. Discuss the benefits of interactive data visualizations. 2. Recommend how this dashboard could be made interactive. 3. Create the interactive dashboard based on your recommendation.

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Answer: 1. The benefit of interactive data visualization is that it allows engagement with the data. An interactive visualization helps users: • Quickly identify trends. • Efficiently identify relationships. • Provide useful data storytelling. • Simplify complex data. 2. Filters should be added to the dashboard to allow filtering on category and department. The dashboard should also allow for drill down into the data to get more detailed information. For example, you can drill down to show all office supplies and office furniture expense transactions within the Engineering and Sales departments.

Category Software X Office Supplies X Office Furniture IT Equipment Other Department X Engineering X Sales Finance Diff: 2 LO: 9-5 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 546

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94) BTE Tax Ltd. specializes in individual tax services. To help reduce individual tax liability, senior partners would like to understand which tax credits and tax deductions are being used by their tax clients. This information will help the firm gain the required tax education for the next tax season. Specifically, senior partners want to see a ranking of the tax credits and tax deductions that are used the most to the least. The following visualization has been provided to the senior partners.

1. Is this data visualization appropriate for this analysis? Discuss your rationale. 2. Prepare another visualization. Explain why your visualization is more appropriate.

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Answer: 1. The vertical stacked bar chart is not appropriate since it is difficult to see the ranking of the tax credits and tax deductions that are used the most. Since there are many categories, using colors to distinguish them makes it hard to identify the categories within the stacked bar. The labels "Credits" and "Deductions" should be horizontal to make it easier to read. 2. A bar chart is a better visualization to use since there can be a ranking of the tax credits and tax deductions that are used the most to the least.

Diff: 2 LO: 9-2, 9-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

548

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95) Indigo Social is a digital marketing technology company that offers social media scheduling, monitoring, and reporting functionality with integrations to customer relationship manager (CRM) platforms. They are a start-up company and cash flow is a concern. Senior executives would like to see the performance of cash flow activities by quarter. You are provided with the following visualization.

1. Is this data visualization appropriate for this analysis? Discuss your rationale. 2. Prepare another visualization using visualization best practices. Explain why your visualization is more appropriate.

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Answer: 1. The data visualization is not appropriate since it doesn't address the objectives of the audience. Senior executives would like to see trends in the cash flow activities by quarter. The stacked bar doesn't allow the audience to see comparisons by fiscal quarters. The y-axis should indicate the value in denominations. 2. A line chart should be used since time (fiscal quarter) is involved. Fiscal quarters should be ordered from left to right and this follows the law of continuity. A line chart can be used since there are less than four lines.

Diff: 2 LO: 9-2, 9-3 Bloom: AP Min.: 10 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

550

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96) OneSun is a manufacturer of solar panels. They have two sales regions: South and North. The CFO would like to understand sales trends by month and compare the sales by sales region. The following visualization has been created for your review.

1. Identify and discuss five violations of visualization best practices. 2. Prepare a corrected visualization using visualization best practices.

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Answer: 1. There are several violations of best practices: i. Text for the months should be horizontal since the space is available. ii. The title should be left-justified in the upper left corner. iii. The title should be more descriptive, such as, "Sales Trends by Region." iv. The gridlines should be muted. The line should be thinner or can be omitted. v. Text size is not hierarchical. For example, the title font is too small, and the y-axis labels are too large. vi. The y-axis should start at zero instead of $1,000,000. vii. The black background should not be used since people with astigmatism will have trouble reading the visualization. 2. The following is the corrected visualization. Note that a line chart can also be used.

Diff: 3 LO: 9-1, 9-2, 9-3, 9-4, 9-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

552

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97) Carmela Couture is a fashion designer of casual wear. You are provided with sales data for the fiscal year for each product. The CFO would like to create a dashboard that shows the following information: i. Total sales dollars by product category. ii. A ranking of products showing the highest to lowest margin percentage. iii. A relationship between price and sales quantity. Category T-Shirts T-Shirts Jeans Jeans Jeans Coats Coats Sweaters Sweaters Sweaters …

Description Printed T-Shirt Plain T-Shirt Loose Fit Jeans Relax Fit Jeans Skinny Jeans Down-Filled Jacket Spring/Fall Jacket Knitted Sweater Cardigan V-neck sweater …

Cost Price Margin % $35 $110 68% $30 $100 70% $45 $250 82% $48 $260 82% $49 $220 78% $240 $950 75% $180 $650 72% $45 $170 74% $48 $165 71% $60 $160 63% … … …

Sales Qty 240 339 250 240 270 210 220 130 270 640 …

1. For each dashboard component, identify the visualization that can be used and state your reason for selecting the visualization. 2. Prepare the dashboard using visualization best practices. Given the supplied data is a sample data extract, the values on the dashboard are not expected to be accurate.

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Answer: 1. i. A pie chart can be used to show sales by category. Pie charts are easy to understand and are impactful with small data sets. ii. A horizontal bar can be used to show the product margin percentage. The bars can be ordered from highest to lowest so that the margins for each product can be compared. The ranking follows the law of continuity. iii. A scatterplot can be used to show the relationship between price and sale quantity. This follows the law of proximity. Outliers can be easily seen through the scatterplots. 2. Sales Dashboard

Diff: 3 LO: 9-1, 9-2, 9-3, 9-4, 9-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management 554

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98) Pinnacle Palace is a large restaurant chain. Their purchasing function is centralized at the head office. During the year they implemented electronic invoicing to streamline their account payable function. The following visualizations were created to show the impact of electronic invoicing. 1. Identify and discuss five violations of visualization best practices. 2. Prepare a corrected visualization using visualization best practices. 3. Based on the results of the visualization, write a narrative of the results of analysis using the story telling principle.

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Answer: 1. There are several misleading elements and violations of best practices: i. The text for the accounts payable date ranges should be horizontal to make it easy to read. ii. The accounts payable date ranges should be ordered from the lowest number of days to the highest number of days. This will follow the law of continuity. iii. The titles should be left-justified in the upper left corner. iv. The title should be more descriptive, such as "Accounts Payable By Date Ranges" and "Pending Invoice Counts By Month". v. The gridlines should be muted. The line should be thinner. vi. For the Pending Invoice visualization, the y-axis should start at zero instead of 200. vii. The black background should not be used since people with astigmatism will have trouble reading the visualization. 2. The following are the correct visualizations.

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3. Data Story: Freytag's Pyramid Element Exposition

Rising Action

Climax

Falling Action

Resolution

Data Story Component Pinnacle Palace implemented electronic invoicing which will help reduce manual data entry and streamline accounts payable functionality. Data analysis was required to determine if implementing electronic invoicing improved accounts payable key metrics. Starting in July, the number of pending invoices decreased; however, the values of overdue accounts payables appear to be high for the year. Electronic invoices appear to reduce the number of pending invoices, but there is still a large value of overdue accounts payables that need to be addressed. The accounts payable team should actively resolve the overdue accounts payables that are over 45 days. Electronic invoices should be continued since it reduces the number of pending invoices.

Diff: 3 LO: 9-1, 9-2, 9-3, 9-4, 9-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

557

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99) You are an internal auditor at Star Alliance Consulting. Consultants travel to client sites for their consulting engagements. You are auditing employee flight expenses. The company has a policy that analysts are restricted to economy tickets and managers are restricted to economy and business class tickets. Only directors can purchase first class tickets. You would like to create a dashboard to show the following information: i. Total value of tickets purchased by each department. The visualization should also show the proportion of tickets spent by ticket class for each department. ii. Total value of tickets purchased by each position. The visualization should also show the proportion of tickets spent by ticket class for each position. iii. A ranking of ticket transactions by employee from highest to lowest ticket value. 1. For each dashboard component, identify the visualization that can be used and state the reason for your selection. 2. Prepare an interactive dashboard that will allow analysis in a live presentation. Given the supplied data is a sample data extract, the values on the dashboard are not expected to be accurate. Follow best practices for each visualization.

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Answer: 1. Dashboard Components: i. A stack bar chart should be used since it can compare subcomponents between categories. The category should be departments and the subcomponents should be flight class. The flight class will be the segment for each bar. ii. A stack bar chart should be used since it can compare subcomponents between categories. The category should be position and the subcomponents should be flight class. The flight class will be the segment for each bar. iii. A horizontal bar chart should be used so that the label can be horizontal to encompass the employee, position, and department. The bar chart can be used to rank the flight transactions from highest to lowest. This follows the law of continuity. 2. The following is the interactive dashboard. Filters are available for Department, Position, and Flight Class. Drill down functionality should also be supported.

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Department X Client Support X Finance X IT X Marketing X Sales Position X Analyst X Manager X Director Flight Class X Economy Class X Business Class X First Class Diff: 3 LO: 9-1, 9-2, 9-3, 9-4, 9-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

560

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100) You are an AIS accountant for WaveStream, an online television streaming service. WaveStream has operations across the country and its staff log into the accounting information system daily. The CIO has concerns about system security since there is an increased number of data breaches and randomware in recent years. A visualization was created to show the number of unauthorized login attempts in the last two years. The CIO's objective is to understand if the problem is being more serious and if immediate action is required.

1. Discuss if the data visualization is appropriate for this analysis. 2. Prepare another visualization that is more appropriate for meeting the objectives of the analysis. 3. Use Freytag's pyramid to tell the story. Ensure the story includes recommendations to the CIO.

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Answer: 1. The visualization is not appropriate since it is difficult to compare if login attempts are increasing throughout 2023 since the values are stacked on top of the 2022 values. It's also difficult to compare the difference between 2022 and 2023 values since the values are stacked. The background should be in white so that people with astigmatism can read it. The y-axis should also begin at zero. 2. The following visualization is more appropriate for meeting the objectives of the analysis.

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3. Data Story: Freytag's Pyramid Element Exposition

Rising Action Climax

Falling Action Resolution

Data Story Component WaveStream has operations across the country and its staff logs into the accounting information system daily. There are concerns about system security since the number of data breaches and ransomware has increased in recent years. The CIO's objective is to understand if the problem is being more serious and if immediate action is required. Data analysis is required to understand the trends in unauthorized login attempts in the last two years. A visualization was created, and the results show the number of authorized login attempts were higher in 2023 compared to 2022. In both years there was a spike in authorization login attempts in November and December. The results show that immediate action is required to reduce the security risk to Wavestream. Investments in security software should be evaluated and implemented to address the increased security risk.

Diff: 3 LO: 9-1, 9-2, 9-3, 9-4, 9-5 Bloom: S Min.: 15 AACSB: Analytic AICPA: FC: Risk Assessment, Analysis, and Management

Browsegrades.net

Chapter 10

Recent Data and Analyses Developments in Accounting

1) Which of the following correctly lists the five data Vs? A) Velocity, Value, Veracity, Vast, Varied B) Velocity, Value, Veracity, Volume, Variety C) Velocity, Value, Veracity, Volume, Volatile D) Velocity, Value, Viable, Volume, Variety Answer: B Explanation: Velocity, Value, Veracity, Volume, and Variety are the five data Vs. Diff: 1 LO: 10-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 2) Joshua is selecting a storage solution for his small company's data. He would like to select the most cost-effective option with the fastest implementation. Which of the following would be the most appropriate choice for his needs? A) Community cloud B) Hybrid cloud C) Private cloud D) Public cloud Answer: D Explanation: A public cloud has the lowest individual company cost, fastest implementation, and is generally the most appropriate choice for a small business. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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3) Cherry Inc. is a logistics company specializing in working with fleets of trucks to deliver produce to businesses in mid-size cities. Which of the following scenarios might motivate Cherry Inc. to integrate its Accounting Information Systems (AIS) data with its shipping trucks' GPS data in their analysis? A) It has a need to increase the speed with which its social media posts reach a certain demographic. B) It would like to be able to reduce fuel costs by selecting the most efficient delivery routes. C) It would like to increase the accuracy of the data collected for analysis. D) It would like to increase the quantity of data selected for analysis and move that data to a cloud-based solution. Answer: B Explanation: Accountants have been using data variety to achieve several objectives, and they are doing so by deviating from their traditional approach of using structured data to integrate unstructured data. An organization that wishes to seek out the most efficient travel routes to reduce fuel costs should focus on data variety to achieve that objective. By using tools like a GPS with an Artificial Intelligence model, the company could conduct a thorough analysis. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 4) Wei works as a financial accountant for a large clothing retailer. One of her primary tasks is to ensure the company settles its accounts payable with its numerous vendors in a timely fashion. She is preparing an aging report for management, and she is interested in the ending accounts payable's data A) value. B) variety. C) veracity. D) volume. Answer: C Explanation: An accountant who is concerned about the ending balances of accounts will be most interested in the data veracity, or reliability of the data collected for analysis. The ending balance of an account with numerous transactions needs to be accurate and reliable to be most useful for those looking at the data. Diff: 2 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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5) Natalie was recently promoted. Her manager asked her to take on several new projects while the company strives to improve its social media presence. If Natalie needs to analyze how many Twitter mentions contain the company's name, then which of the following would most likely impact her unstructured data findings? A) Data value B) Data velocity C) Data veracity D) Data volume Answer: B Explanation: Natalie is concerned with the frequency with which the company's name appears on Twitter. Data velocity will show the rate at which new data points are generated. On Twitter and similar social media applications, velocity can have a large impact due to the ubiquity of apps on devices whose availability increases the number of data points and the frequency with which they are generated. The higher the data velocity, the faster the data volume will grow. Diff: 2 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 6) An organization would like to reduce the likelihood of personal data violations. This can be accomplished by A) having an open employee payroll records policy. B) limiting the opportunity for users to opt out of sharing their personal data. C) sharing private data without users' express permissions. D) using encryption on sensitive exchanges of information. Answer: D Explanation: If an organization wishes to reduce the likelihood of personal data violations, then it will need to use more secure methods, including data encryption, to protect the sensitive data. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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7) The Fair Credit Reporting Act (FCRA) A) allows free access to individual financial information like tax returns. B) limits and protects credit-related personal data collection and sharing. C) protects the privacy of educational records. D) restricts the use of data held by government agencies. Answer: B Explanation: The FCRA limits and protects credit-related personal data collection and sharing for information including payment histories and individual debts held. Diff: 1 LO: 10-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 8) If a financial accountant had an objective of evaluating the likelihood of being approved for a loan, then which account information would be of the most value to them? A) Common Stock B) Current Assets C) Current Liabilities D) Fixed Assets Answer: C Explanation: Lending institutions often consider debt-to-income ratios when approving loans. Understanding a company's debt-related accounts, such as current liabilities, is the most helpful option. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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9) Higher costs for data storage and organization result from high data A) value. B) velocity. C) veracity. D) volume. Answer: D Explanation: Data volume refers to the amount of data. As the volume of data increases, the costs associated with storing and organizing that data will also increase. Diff: 1 LO: 10-1 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 10) While analyzing the data security and storage needs of an organization, many factors are taken into consideration. If John, the head of accounting, expressed concerns about a noticeable influx of information and a larger volume of data than the company typically has, then which of the following is the most likely factor for why this is occurring? A) Decreased computer costs and processing capabilities motivates companies to store more data. B) Increased computer costs make it more challenging for companies to manage data with a limited number of computers. C) New technologies are more connected and integrated with traditional systems. D) New technologies focus on more independent and disintegrated systems. Answer: C Explanation: A company will consider many factors when it analyzes its current data needs. Due to the decreases in cost for increased computer memory and processing capabilities and the newly connected and integrated nature of technologies, the volume of data a company has will increase. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

568

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11) When a company moves towards a cloud-based storage solution, it must consider the benefits and costs of its options. Private clouds and public clouds each have benefits and costs associated with their use. Which of the following is most representative of the benefits of a public cloud? A) Has a fast and efficient implementation B) Involves shared contracts and joint revisions C) Is most appropriate for large organizations D) Offers high data interactivity Answer: A Explanation: Cloud-based storage solutions have become an increasingly popular method for organizations to safely and securely store their data. One of the largest benefits of a public cloud is that it offers the fastest implementation when compared with a private or hybrid cloud. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 12) Data Value describes the benefits data can provide depending upon the objective of the analysis. Accountants find data value very important when dealing with clients. As it pertains to tax accountants, which of the following most likely represents an instance of the best data value? A) Analyzing current stock prices by gathering data from a financial website B) Having a listing of all sales tax percentages within a state for a retail-based client C) Having a listing of average sales prices and associated sales taxes of apples available from a local produce provider D) Having a systems error log produced by the tax preparation system Answer: B Explanation: Tax accountants specialize in tax-related matters and do not delve into areas like analyzing stock prices, looking at automated error logs, or using a list of average sales prices for a single produce company even when sales taxes are factored in. All this information could be important to financial or managerial accountants and others who work within accounting information systems. A tax accountant will derive the best data value from a listing of sales tax percentages they can provide their client or use in filing calculations for that client. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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570) John is the general accountant for a small cafe that recently launched an app allowing customers to preorder their food and drinks online. When the app launched, John requested inclusion of a screen where customers consent to having their information retained by the company and stored on the cloud. Which of the following represents a potential ethical issue with allowing the company to keep its customers' data? A) A hacker could sell that information to another party without the customers' consent. B) Customers may opt not to share that data making John feel as if his contribution failed in its objective. C) John can choose to bypass internal controls and share this information with the data manager. D) John could choose to bypass internal controls and share this information with another party. Answer: D Explanation: Data ethics play a large part in business decision making as technology becomes more integrated with operations. Companies create apps, like the one in this example, that collect information from their customers. Having customer data can present an array of potential ethical issues including someone internally bypassing internal controls to sell customer data to another party without express consent from the clients. While the other choices also present challenges that could result from capturing client data, they are not necessarily ethical issues. Being concerned about hackers is valid, but it is not an ethical issue for the company; John's feelings about app success is also not an ethical decision; nor is his decision to share information internally with the data manager. Diff: 2 LO: 10-1 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

570

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571) John is the general accountant for a small cafe that recently launched an app allowing customers to preorder their food and drinks online. When the app launched, John requested inclusion of a screen where customers consent to having their information retained by the company and stored on the cloud. Which of the following is something John must consider when obtaining and retaining customer data? A) Does the app have a clearly defined place to allow a customer to opt into (or opt out of) data sharing? B) Does the company have adequate physical barriers to limit unauthorized access to their server room? C) Should John allow his manager to have access to the data? D) Should the company collect sensitive data like social security numbers from their customers? Answer: A Explanation: Data ethics play a large part in business decision making as technology becomes more integrated with operations. Companies create apps, like the one in this example, that collect information from their customers. When considering how to obtain and retain customer data, John should ensure the app allows a way to clearly opt into (or opt out of) sharing personal data with the company. Physical barriers to a server room may be important for overall security, but for a scenario involving cloud-based data storage this is not relevant. John's manager will likely have access to the same information John does, and the collection of social security numbers is not vital to the success of this app, so that is unnecessary. Diff: 2 LO: 10-1 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

571

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15) Roger is an accounting information systems accountant at a large medical facility where customers come from all over the state. As a medical facility, the company retains incredibly sensitive patient information including social security numbers, dates of birth, and health and health insurance information. The company made an initiative to focus on data ethics in the coming year. Which of the following would be a good first step for Roger to address the need for ethics in this environment? A) He could assess policies already in place and compare them to the requirements of the Privacy Act of 1974. B) He could distribute an anonymous ethics awareness survey for facility staff to establish a baseline of their knowledge. C) He could interview facility staff individually about how they might handle various potential ethical situations. D) He could review existing internal controls surrounding access to submitted and stored patient information. Answer: B Explanation: Roger serves an important role with the organization as he works to make his organization's data privacy policies more compliant. A first step in addressing the company's need for ethics in this environment would be to send out an anonymized ethics awareness survey to establish a company-wide baseline. Interviewing individual staff could provide interesting results, but interviewees may tailor their responses to the interviewer in ways they would not when compared to an anonymous survey. Roger would want to look at internal controls surrounding submitted patient information eventually, but not as a first step. The Privacy Act of 1974 would not impact his facility since they are not a government agency. Diff: 2 LO: 10-1 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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16) Ram is an accounting information systems accountant at a large medical facility where customers come from all over the state. As a medical facility, the company retains incredibly sensitive patient information including social security numbers, dates of birth, and health and health insurance information. The company made an initiative to focus on data ethics in the coming year. Which of the following ethical violations should be most concerning for Ram and the medical facility? A) A clerk shared a patient's medical history with another medical facility after the patient formally requested to do so in writing. B) A clerk shared an individual patient's medical history with that patient's employer when asked by said employer. C) A data breach revealed the names and home addresses of all medical staff working at the facility. D) A data breach shared the last four digits of stored patient credit cards. Answer: B Explanation: As companies become more reliant on technology to run various aspects of its business, the increased risk of being vulnerable to data breaches also increases. As a medical facility, HIPAA (Health Insurance Portability and Accountability Act) violations are a huge ethical consideration and potential threat. A clerk sharing a patient's medical history with that patient's employer without patient consent is a violation of that patient's privacy and an egregious ethical violation. Data breaches are often also ethical violations and could result in a large loss of trust or even legal actions. A clerk sharing a patient's medical history with the patient's expressed consent would not be a violation. Diff: 2 LO: 10-1 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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574) As companies utilize technology to make its businesses more efficient, there are also very serious ethical implications and privacy considerations. The kind of laws in the United States that apply in a given situation depend upon the type of data or business. If Daniel is an advisor at a local college, then which US National Data Privacy Law most likely applies to his work, and why? A) The Family Educational Rights and Privacy Act (FERPA): Daniel may be working with student educational records. B) The Family Educational Rights and Privacy Act (FERPA): Daniel may be working with faculty educational records. C) The Gramm-Leach Bliley Act (GLBA): Daniel may be looking at student financial aid information. D) The Privacy Act of 1974: the university may store data reported to the government. Answer: A Explanation: The United States has many data privacy laws. If Daniel is an advisor at a local college, then his concern should be for FERPA guidelines and ensuring the privacy of student educational records. As an advisor, Daniel views educational records, and it is vital that he protect these records and abide by FERPA regulations. The Privacy Act of 1974 pertains to restriction of data held by government agencies rather than what the university reports to the government. The GLBA requires that loan service providers disclose any personal data sharing. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

574

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575) As companies utilize technology to make its businesses more efficient, there are also very serious ethical implications and privacy considerations. The kind of laws in the United States that apply in a given situation depend upon the type of data or business. If Sandra is a loan officer at a bank, then which US National Data Privacy Law most likely applies to her work, and why? A) The Children's Online Privacy Protection Act (COPPA): Sandra collects personal data from clients with children. B) The Electronic Communications Privacy Act (ECPA): Sandra reads personal emails sent by clients with sensitive data. C) The Gramm-Leach Bliley Act (GLBA): the bank discloses its data sharing practices for personal information. D) The Privacy Act of 1974: Sandra reports information to a governmental agency such as Fannie Mae. Answer: C Explanation: The United States has enacted many data privacy laws. If Sandra is a loan officer at a bank, then the Gramm-Leach Bliley Act would most likely apply to her work since this law regulates how loan service providers disclose their data sharing practices for personal information. The Privacy Act of 1974 pertains to the restriction of data held by government agencies rather than what a given bank or lending institution supplies to them. COPPA applies to data collection from children, but does not apply to data collected from an adult with a child. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

575

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19) Journey Inc. is an outdoor sporting goods company that focuses its retail efforts in cities bordering the Appalachian Trail. In recent years, the company debated increasing its efforts to create and promote an online presence. As management prepares to make a timeline for what it would take to launch a new website, they are reaching out to various departments for help. Journey invites suggestions from different departments for different ways to explore potential financial impacts of nationwide selling. Which of the following suggestions would best help assess future financial impacts? A) Construct a dashboard that reflects the daily change in its stock price. B) Construct a dashboard to collect tax rates from cities across the United States. C) Use cognitive technologies to perform a risk assessment for a single test market in a nearby town. D) Use routine process automation to automate monthly bank reconciliations for all branches of Journey Inc. Answer: B Explanation: Journey Inc. has set a goal of determining what financial impacts they may experience from nationwide online sales. While all the suggestions listed above could prove beneficial in some way, constructing a dashboard to collect tax rates from cities across the US is the most likely suggestion to assist management in determining what the financial impacts of nationwide online sales could be. Each city and state where the company might sell could have certain income and/or sales tax implications for Journey Inc. that would have a financial impact on the organization. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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20) Jennifer is a senior tax accountant for Fluffy Fido's, a gourmet dog treat company that operates nationwide. Jennifer's department spends a considerable amount of time each month compiling data and completing sales and use tax reports. Management asked Jennifer and the tax team to compile tax data to make projections for the following year. A junior member on the team hands Jennifer 9 months' worth of data to use in their projection. Which of the five Vs of data would you suggest Jennifer focus on in this scenario, and why? A) Value. There are 3 months of missing data for the year that could impact the value of the remaining data. B) Velocity. The 3 months of missing data could greatly skew the company's projections based on its own performance. C) Veracity. The 3 months of missing data could drastically impact a projection. D) Volume. There are 3 months of missing data for the year, so any decisions about data storage needs made are potentially inaccurate. Answer: C Explanation: Data veracity refers to the reliability of data generated and collected by an organization, so that is a potential concern in this situation. If management asked Jennifer to compile data so they can make projections for the following year, then they benefit from using as much historical data as possible. Missing 3 months of data could skew any results, making the 9 months of collected data insufficiently reliable. While there may be some impact on the remaining Vs resulting from the missing data, those impacts do not create or present as large of a concern as the impact on the data's veracity. Diff: 2 LO: 10-1 Bloom: E Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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21) Sandra is an accountant for a large corporation where she serves in an advisory capacity. She worked on a data analysis project for one of her clients where she looked at their various accounts. If her client were a clothing manufacturer and the project objective was to evaluate profit trends, then which data would hold the most value? A) Historical data about the company's operating revenues B) Historical data about the company's other revenues C) Market data about future revenues D) The current balances of current assets and liabilities Answer: A Explanation: Sandra serves an important role for her clients, and she helps them improve their operations. All the data listed may have value at some point, but the objective of this project determines what data is most valuable for that project. If a company is evaluating project trends, then historical data about the company's operating revenues are the most valuable. Analyzing this information enables the company to examine and evaluate any existing profit trends. The remaining choices also have value, but they are more valuable for other projects with other objectives. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 22) Sandra is an accountant for a large corporation where she serves in an advisory capacity. She worked on a data analysis project for one of her clients where she looked at their various accounts. If her client were an electronics manufacturer and the project objective was to evaluate whether to drop one of its product lines, then which data would hold the most value? A) Data for all products' variable costs B) Data pertaining to the company's net income over the past five years C) Data separating the contribution margin from sales revenues D) Data separating traceable fixed costs from common allocated fixed costs Answer: D Explanation: Sandra serves an important role for her clients, and she helps them improve their operations. All the data listed has value, but the objective of this project determines what data is most valuable for this project. If a company is trying to determine whether to drop one of its product lines, then information about which traceable fixed costs are separable from common allocated fixed costs is the most useful. From there, Sandra can recalculate net income without the potentially dropped product. While the other choices also have value, being able to separate out the avoidable costs holds the most value for their objective. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 578

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23) Meteor Company produces telescopes that it sells to local hobby shops. Meteor's accountant would like to use one of its newly implemented data analytics tools to determine how the sales department performed during the most recent year. Which of the following is a way data analysis could evaluate this? A) Use cognitive technologies to determine which stores are likely to experience sales growth in the upcoming year. B) Use data mining to extract information about which accounts receivable have been outstanding for the longest period. C) Use data mining to extract information about which regions have the highest returns for the year. D) Use textual analysis to look at Twitter and find the number of times customers used the hashtag for their newest product. Answer: C Explanation: Accountants can use data analytics tools to perform a variety of different tasks that assist various departments within an organization. If an accountant wanted to determine how a given department performed over a set period instead of predicting a future outcome, then data mining is the most effective tool. By extracting and analyzing data about regions with high returns, Meteor Company's accountants can determine how the sales department performed using high returns as an area sales departments are evaluated on. Diff: 2 LO: 10-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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24) Sarah is an Assistant Professor of Accounting at a large public university. She worries the Introduction to Accounting students in her face-to-face courses are failing to grasp the concept of adjusting entries. Which of the following best represents a way Sarah can use data analytics to gain insight into her concern? A) Sarah could ask employers of recent graduates to complete a new-hire performance satisfaction survey. B) Sarah could use cognitive technologies to predict what exam scores should be for a unit on adjusting entries based on past students' performances. C) Sarah could use data mining to extract exam scores and compare the performance of her students over time. D) Sarah could use data mining to extract homework scores and compare the performance of her students over time. Answer: C Explanation: Those working in academia, including administration and faculty, use various data analytics tools to analyze student retention and performance. If Sarah is worried about a specific portion of her class being missed by students, then she would be best served by data mining exam scores over time and comparing student performance by topic. By looking at exam scores instead of homework scores, she should gain insight into how well students understand the material when formally assessed rather than how well they understand the material during an exercise where they have unlimited resources and are able to work with classmates. Diff: 2 LO: 10-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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25) Tom is a tax accountant who owns his own practice. He serves a variety of clients and strives to provide the best tax preparation, strategy, and planning available in his town. He would like to utilize data analytics to best serve his clients. Which of the following would be an appropriate example of how he could do this? A) Tom could use data mining to determine whether his client will meet the qualifications for the child tax credit. B) Tom could use process mining to determine whether his client will meet the qualifications for the new home buyer deduction. C) Tom could use robotic process automation to assist in completing tax returns for his repeat clients. D) Tom could use textual analysis tools to analyze all the corporate tax return deductions he helped his clients claim the previous year. Answer: A Explanation: As a tax accountant, Tom wants to help his clients file their tax returns correctly while also finding every possible deduction and credit they may be eligible to receive. Using data mining to search qualifications for specific tax credits is an appropriate use of data analytics to achieve his goals and best serve his clients. Diff: 2 LO: 10-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 26) Robotic Process Automation (RPA) is a software technology that greatly benefits many accountants. While it may not be suited to all businesses or tasks, it can improve efficiencies when implemented correctly. Which of the following scenarios would benefit most from implementing RPA? A) Amanda spends one day at the end of every month correcting journal entries. B) Darlene spends several days at the end of each month preparing period-end closing entries. C) Sam collects customer survey results to determine what product enhancements customers would like to see. D) Trisha spends several days every few weeks compiling notes for managerial review for inclusion in the company's financial statement footnotes. Answer: B Explanation: RPA is a software system designed to assist with routine repetitive tasks. In accounting, RPA tools can accomplish routine tasks like reconciliations or preparing monthly closing entries. Compiling footnotes, collecting customer survey results, and recording unusual journal entries are also tasks assigned to accountants, but these would be better served by other data technology tools. Diff: 2 LO: 10-2 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 581

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27) Because of recent developments in data analysis, accountants may find job recruiters demanding which of the following skills? A) Ability to work within a team B) Critical-thinking ability C) Listening and notetaking training D) Possession of technical financial accounting skills Answer: B Explanation: The skills demanded by recruiters go beyond technical skills and now include traits like critical thinking, evaluation skills, a skeptical perspective, and observational skills. Diff: 1 LO: 10-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 28) A tax accounting firm chose smart contracts while creating agreements with their clients. Select the most appropriate statement justifying the firm's decision. A) The firm has little concern for tracking contract milestones. B) The firm prefers clients have an option to execute secure contracts virtually. C) The firm wants contract flexibilities to depend on who creates them. D) The firm wants signed contracts that are easily adjustable by either party. Answer: B Explanation: Companies use smart contracts when it wishes to have secured transactions between multiple parties in a virtual environment. Smart contracts cannot be easily changed without express consent of the parties involved, have an organized template, and do a thorough job of tracking contract milestones. Diff: 1 LO: 10-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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29) Complex cognitive tools are also known as A) cognitive dissonance. B) expert systems. C) motor learning. D) robot learning. Answer: B Explanation: Complex cognitive tools are also known as expert systems. Diff: 1 LO: 10-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 30) Cognitive technology tools perform best in A) a stable environment with new data. B) a stable environment with old data. C) an artificial environment with new data. D) an artificial environment with old data. Answer: B Explanation: Cognitive technology tools perform best in stable environments where they can utilize old data to produce an expert decision. Diff: 1 LO: 10-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 31) Continuous auditing technologies have numerous benefits including A) allowing auditors to leave the majority of their testing for the end of the audit. B) allowing audits to be more proactive than reactive. C) allowing audits to be more reactive than proactive. D) allowing issues to be evaluated at the conclusion of the audit. Answer: B Explanation: Continuous auditing technologies allow companies to use programmed modules in its Accounting Information System (AIS) to evaluate transactions throughout the year rather than only at fixed points in time. A benefit of this is that audits are now able to be more proactive than reactive. Diff: 1 LO: 10-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 583

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32) The data analysis value creation chain has a specific ordering. Which of the following precedes the new intelligence step in the data analysis value creation sequence? A) Data Analysis B) Data Velocity C) Strategy Shifts D) Value Creation Answer: A Explanation: The correct ordering of the data analysis value creation chain is: Data Analysis, New Intelligence, Strategy Shifts, and Value Creation. This would make data analysis a correct selection as it precedes new intelligence. Diff: 1 LO: 10-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 33) The accounting manager wants to improve their company's ability to communicate accounting data. Textual mining tools assist accounting professionals in this regard. An example of text mining sources could include which of the following? A) A Facebook or other social media post featuring a photo collage with accompanying music B) An Instagram or other social media video post from an influencer that features the company's product(s) C) Financial footnotes contained within an annual report from the company itself D) Pictures from one of that company's events Answer: C Explanation: Textual mining tools analyze word choices in many places including blogs and social media. To be successful, these tools must have written words to analyze like those found in financial statement footnotes. Diff: 1 LO: 10-2 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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34) To modernize and to become more efficient, an organization may search for ways it can implement new technologies. When the goal is to integrate some artificial intelligence, cognitive technologies can be an appropriate selection. Which of the following best represents an example of the use of cognitive technology for predictive purposes in accounting? A) Classifying accounts receivable on an aging report B) Estimating the risk of default on company loans C) Grouping abnormal journal entries together in the system by account D) Identifying underperforming employees based on a labor report Answer: B Explanation: Cognitive technologies are becoming popular choices among businesses that wish to have some artificial intelligence assistance with the workload carried by employees. Cognitive technologies have many varied uses in accounting. An example of using cognitive technologies for predictive purposes is using it to estimate the future risk of default on company loans. The remaining choices represent uses of cognitive technologies for classification or clustering purposes. Diff: 2 LO: 10-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 35) To modernize and to become more efficient, an organization may search for ways it can implement new technologies. When the goal is to integrate some artificial intelligence, cognitive technologies can be an appropriate selection. Which of the following best represents an example of the use of cognitive technology in accounting for classification purposes? A) Determining whether to process a loan application B) Estimating employee turnover C) Identifying high sales product categories D) Training employees with realistic scenario modules Answer: C Explanation: Cognitive technologies are becoming popular choices among businesses that wish to have some artificial intelligence assistance with the workload carried by employees. Cognitive technologies have many varied uses in accounting. An example of using cognitive technologies for classification purposes is using it to identify high sales product categories. The remaining choices represent using cognitive technologies for prediction purposes. Diff: 2 LO: 10-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

585

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586) As a company modernizes and integrates various technologies into its operations, it considersmany factors. Accountants embrace valuable applications of cognitive technologies practice areas. Which of the following represents a potential use of cognitive technologies as across many highlighted by the Committee of Sponsoring Organizations (COSO)? A) Using cognitive technologies to identify patterns based on historical data collected within a system B) Using cognitive technologies to identify patterns based on new data from a newly implemented system C) Using cognitive technologies to increase internal controls by determining whether the company needs additional employees to enforce its policies D) Using cognitive technologies to increase server room security by administering additional safety procedures Answer: A Explanation: Cognitive technologies are artificial intelligence technologies that aim to mimic expert human judgement. Using cognitive technologies to identify patterns based on historical data is a potential use highlighted by the COSO. The remaining choices may be additional measures for an organization to consider, but would not be considered something emphasized or highlighted by the COSO. Diff: 2 LO: 10-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

586

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587) As a company modernizes and integrates various technologies into its operations, it considersmany factors. Accountants embrace valuable applications of cognitive technologies practice areas. Which of the following represents a potential risk for a law firm wanting to use across many cognitive technologies? A) The expert who designed the system used by the law firm included an option for the firm to customize certain client-facing pages. B) The system rejects a client who applied for legal help because his needs do not align with the firm's areas of expertise. C) The system rejects a client who applied for legal help because of a data type mismatch (e.g., typing a name in a number field). D) The system searches for misaligned data from client input and holds these applications for human review. Answer: C Explanation: Cognitive technologies are artificial intelligence technologies that aim to mimic expert human judgement. While these technologies are advanced and sophisticated, they do come with their own risks. The system rejecting an applicant for legal help due to an input error is a potential risk associated with using AI and cognitive technologies. The other options listed represent additional steps that require human interactions to complete a process. Additionally, the system rejecting a potential client for an appropriate reason is not a risk. Diff: 2 LO: 10-2 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

587

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38) As a financial accountant at Jasper Corp, you prioritized accuracy in your financial information. You spend most of your time entering information into various journals and performing your analyses manually. Management gave you permission to integrate some modern data analysis tools to improve the efficiency of the company's financial accounting tasks. How would you address the New Intelligence step for your data analysis value creation chain? A) Compile a report that compares time previously spent on creating revenue projections to time spent on the same tasks after implementing the new technology. B) Gather data about how much time is currently spent on routine journal entries and routine system maintenance. C) Have an information session to learn about how to improve workflow using the new tools. D) Hold a training session for all departments so they can learn about how the new technology works. Answer: C Explanation: The New Intelligence portion of the data analysis value creation chain involves collecting new information about an existing function or set of data. Having an information session to learn how to use the tool to improve workflow best represents an example of the New Intelligence step. The other choices listed belong to other parts of the data analysis value creation chain. Gathering data about something already occurring would be an example of Data Analysis, and the other choices represent the Strategy Shifts and Value Creation steps. Diff: 2 LO: 10-2 Bloom: S Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

588

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39) As a financial accountant at Jasper Corp, you prioritized accuracy in your financial information. You spend most of your time entering information into various journal and performing your analyses manually. Management gave you permission to integrate some modern data analysis tools to improve the efficiency of the company's financial accounting tasks. How would you address the Strategy Shift portion of the data analysis value creation chain? A) Collect data pertaining to how long it now takes to perform tasks with improved efficiency. B) Create a report to document the measured change in time spent manually creating or adjusting journal entries. C) Hold a training session with the accounting team to review the new tool and outline which tasks' efficiencies will improve. D) Hold a training session with the management team to demonstrate the effectiveness of the new tool in a test environment. Answer: C Explanation: The Strategy Shift stage in the chain involves altering the way a company or a department within a company approaches a task or performs some function of that business. Holding a training session to get the accounting team up to speed on the new tool represents a shift in the way the team will now conduct themselves and carry out their work. The remaining choices represent other stages of the data value creation chain. For example, collecting data that captures the amount of time spent on the current tasks, training in a test environment, or outlining a task not included in this shift, like adjusting entries, would not be examples of a strategic shift. Diff: 2 LO: 10-2 Bloom: S Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

589

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40) Within the various practical areas of accounting, managerial accounting is an area that faces less restrictions than other areas like tax accounting or financial accounting. Managerial accountants have been devising new ways to utilize the newest data analytics technology. Which of the following best represents an appropriate use of a process mining tool to fulfill a request from the managerial accounting department? A) Jerry, the manager of human resource department, asked for a report to evaluate ongoing employee concerns. B) Karen, a product supervisor, asked for a report on the number of times a recent press conference mentioned their new product by name. C) Sam, the audit manager, asked to review an automatically generated auditing report. D) Terrance, the manager of the sales department, asked for a report on travel expenses for his team over the last year. Answer: D Explanation: Managerial accountants and their respective departments are a go-to internal party that helps their organization by providing data and insights into how well an organization is performing. A sales department manager who requested a report on travel expenses within their department is an appropriate use of a process mining request from the managerial accounting department. The remaining choices also represent potential requests for information from the managerial accounting department, but they fit better in other categories of analysis tools such as RPA or textual analysis. Diff: 2 LO: 10-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 41) Data analysis tools are utilized in many areas of accounting. One of these ways is data mining within Accounting Information Systems (AIS) for which of the following purposes? A) Artificial intelligence supports B) Automated performance reporting for department managers C) Automatic system updates D) Detecting unauthorized intrusion Answer: D Explanation: Systems accountants use data mining, process mining, routine data and system maintenance (RPA), and continuous auditing to improve their data analyses. One of the things data mining facilitates is automated unauthorized intrusion detection. Diff: 1 LO: 10-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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42) New technological advancements offer systems accountants the opportunity to consider the implementation of alternative methods. Which of the following is an example of one of these alternatives? A) Using cloud services for data storage to maintain the data quality B) Using cognitive technologies to minimize data storage limitations C) Using routine process automation to describe accounting outcomes D) Using tools to create visualizations of key metrics for the sales department Answer: D Explanation: Accountants who work with information systems are finding new and innovative ways to assist organizations and individual users. The goal when using the tools should include optimizing efficiency across all areas, saving money or time, and providing data for use in data-informed decision making. Using tools to create visualizations of key metrics to help a sales department is a correct example of one of the methods used. Diff: 1 LO: 10-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 43) Both internal and external auditors are finding new ways to use emerging technology to improve their efficiency. Which of the following represents a way an auditor could use one of these new tools? A) Analyzing selected data for substantive testing with the help of process mining B) Classifying usual and repetitive transactions with the help of cognitive technologies C) Evaluating problem areas through process mining D) Testing transactions for non-routine qualities with the help of continuous auditing modules Answer: A Explanation: Internal and external auditors are currently finding new ways to use emerging technologies to have more effective and efficient audits. Some of the ways used include performing analytics on selected data for substantive testing, testing transactions for routine qualities, classifying unusual transactions, and evaluating ongoing concerns assisted by cognitive technologies. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

591

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44) Due to the improvements of Accounting Information Systems (AIS) and other tools in the new and emerging technology area, both internal and external auditors have an opportunity to improve their audits. Which of the following is an example of using a tool for monitoring and evaluating internal controls? A) Cognitive technologies B) Continuous auditing C) Data mining D) Process mining Answer: D Explanation: Auditors may find themselves using tools including cognitive technologies, data mining, continuous auditing, and process mining. For monitoring and evaluating internal controls, process mining is the best tool to accomplish this. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 45) Financial accountants have been learning ways they will be able to utilize new data technology. If these professionals wish to focus on routine process automations (RPA), then which of the following tasks is the best place to implement this new technology? A) Finding data patterns and relationships to explain stock market valuation changes B) Footnote preparation C) Proforma financial statement generation D) Temporary account closures Answer: D Explanation: Financial accountants perform many important tasks within an organization ranging from ordinary to unusual. To improve efficiency, a financial accountant may find ways to use routine process automation (RPA) to assist with repetitive or routine tasks. Closing temporary accounts is a suitable area to implement this type of application. Other tasks may require alternative technologies including textual analysis, data mining, or blockchain. Diff: 1 LO: 10-3 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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46) Financial accountants have many stakeholders to whom they are responsible including shareholders, employees, and creditors. To be compliant, which of the following rules must financial accountants adhere to? A) AICPA B) GAAP C) GLBA D) IMA Answer: B Explanation: Financial accountants must adhere to Generally Accepted Accounting Principles (GAAP) for direction on how they need to perform their duties and record data within their information system. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 47) Which of the following is a group of tasks where managerial accountants could benefit from utilizing new data analysis technology? A) Accountant reconciliation, Costing, Controlling B) Budgeting, Costing, Footnote preparation C) Budgeting, Costing, Pricing D) Reconciliations, Continuous auditing, Pricing Answer: C Explanation: Managerial accountants serve an organization's internal parties and users. As such, their tasks revolve around helping internal users make more data-informed decisions. Some tasks of managerial accountants that could benefit from new data analysis technology include budgeting, costing, and pricing. Account reconciliation, footnote preparation, reconciliations, and continuous auditing are tasks accomplished by accountants working in other areas. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

593

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48) As new technologies emerge and organizations implement their use, accountants have been able to lessen the amount of time needed to complete many tasks. While the changes are visible in many cases, not all accountants adjust quickly to these advancements. Historically, which of the following accounting areas has been the slowest to adopt new technologies? A) Auditing B) Financial C) Managerial D) Tax Answer: D Explanation: Tax accounting was initially the slowest to adopt new and emerging data and analysis technologies. Over time, this area of the accounting profession has moved towards embracing these new technologies while finding new and innovative ways to use these technologies to assist their clients. For example, they might use predictive modeling to help determine what tax deductions a given client may receive. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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49) Within the various practical areas of accounting, managerial accounting is an area that faces less restrictions than other areas like tax accounting or financial accounting. Managerial accountants have been devising new ways to utilize the newest data analytics technology. Which of the following best represents an appropriate use of a robotic process automation (RPA) to fulfill a request from the managerial accounting department? A) Carmen, a financial accountant, requested document footnote preparation. B) Carson, the marketing department head, requested a product to help discover new business insights in revenue and related marketing expenditures. C) Samantha, a production manager, requested a report that captures daily labor hours related to work on their new product. D) Todd, the head of the inventory department, requested a report that captures inventory transfers across warehouses. Answer: C Explanation: Managerial accountants and their respective departments are a go-to internal party that helps their organization by providing data and insights into how well an organization is performing. A production manager who requested a report to capture daily labor hours spent working on their new product is an appropriate use of a robotic process automation. The remaining choices also represent potential requests for information from the managerial accounting department, but they fit better in other categories of analysis tools such as blockchain technologies or textual analysis. Diff: 2 LO: 10-3 Bloom: AN Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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50) Scott is the financial accounting manager at Triangle Corp., a telecommunications company. Part of Scott's annual analysis includes performing ratio analyses. Scott collected the following balance sheet items from Triangle's and a rival company's (Competitor) financial statements for the three most recent years:

In Excel, record one macro routine for Triangle company to calculate the working capital ratio (Current Assets/Current Liabilities) for the given years, and then run the same macro on the Competitor's data. Round your final answers to 4 decimal places. A) Triangle: 2025's ratio is 1.1939; 2024's ratio is 1.1940; and, 2023's ratio is 1.4196 Competitor: 2025's ratio is 1.3167; 2024's ratio is 1.3167; and, 2023's ratio is 1.4077 B) Triangle: 2025's ratio is 1.2828; 2024's ratio is 1.3167; and, 2023's ratio is 1.1940 Competitor: 2025's ratio is 1.4196; 2024's ratio is 1.1940; and, 2023's ratio is 1.4077 C) Triangle: 2025's ratio is 1.3166; 2024's ratio is 1.1940; and, 2023's ratio is 1.4077 Competitor: 2025's ratio is 1.2828; 2024's ratio is 1.3167; and, 2023's ratio is 1.4196 D) Triangle: 2025's ratio is 1.4077; 2024's ratio is 1.1940; and, 2023's ratio is 1.3166 Competitor: 2025's ratio is 1.4196; 2024's ratio is 1.3167; and, 2023's ratio is 1.2828

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Answer: D Explanation: Add the given data into an Excel worksheet, and use the Macro functionality to record a routine to calculate Triangle's working capital ratio for each of the years. Then run the same macro on Competitor's data. As a first step, you may need to enable macros on. After enabling macro functionality, go to Triangle's data, select the View tab, and select Record Macro on the drop-down menu under Macros. Name your macro "WorkingCapitalRatio." Now, select cell B4, type the formula = B2/B3 and hit enter. Copy this formula and paste it into cells C4 and D4. Go back to View tab, and select stop recording from the Macros drop-down menu. Next, go to Competitor's data, and select cell B4. Go to the View tab, choose "WorkingCapitalRatio" on the macros drop-down menu, and select "Run." Your macro now performs the ratio calculations for Competitor's data for the years 2025, 2024, and 2023. The results should look like the following table:

Diff: 2 LO: 10-3 Bloom: AP Min.: 2 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

597

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51) Scott is the financial accounting manager at Triangle Corp., a telecommunications company. Part of Scott's annual analysis includes performing ratio analyses. Scott collected the following balance sheet items from Triangle's and a rival company's (Competitor) financial statements for the three most recent years:

In Excel, record a macro routine that calculates Triangle's percentage change in working capital between 2024 and 2025 and then run the same macro on Competitor's data. Use the formula (Current Assets − Current Liabilities) to calculate the working capital. Do not round any intermediate calculations, but round your final answer to 2 decimal places. A) Triangle: 3.17% decrease; Competitor: 9.64% decrease B) Triangle: 3.17% increase; Competitor: 9.64% decrease C) Triangle: 43.55% decrease; Competitor: 122.45% increase D) Triangle: 122.45% increase; Competitor: 43.55% increase

598

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Answer: D Explanation: Input the given data into Excel worksheets, and use the macro functionality to record a routine that calculates Triangle's percentage change in working capital between 2024 and 2025. Then, run the same macro on Competitor's data. As a first step, you may need to enable macros on your data file. After enabling macros, go to Triangle's data, select the View tab, and select Record Macro from the Macros drop-down menu. Name your macro "PerChangeInWorkingCapital." Now, select cell B4, type the formula = ((B2-B3)-(C2-C3))/(C2-C3)×100, and hit enter. Go back to View, and select stop recording from the drop-down menu under Macros. Next, go to Competitor's data, and select cell B4. Go to the View tab and select PerChangeInWorkingCapital from the drop-down menu, and run the macro. This macro performs the percentage change calculation for Competitor's data between the years 2024 and 2025. The results should resemble the following table:

Diff: 2 LO: 10-3 Bloom: AP Min.: 2 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

599

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52) Sunita is a financial accountant for Rose Music, a company that provides a third-party platform for artists to host music that fans can purchase and download. As a financial accountant, Sunita is concerned with various ratios, so she collected information from Rose Music's and a rival company's (Competitor) financial statements:

In Excel, record a macro routine that calculates Rose Music's return on assets (Net Income/End of Period Assets) for the given years. Then, run the same macro on Competitor's data. Round your final answer to 2 decimal places. A) Rose Music: 2025's ratio was 46.59%; 2024's ratio was 34.59%; and, 2023's ratio was 41.61% Competitor: 2025's ratio was 98.38%; 2024's ratio was 92.48%; and, 2023's ratio was 85.83% B) Rose Music: 2025's ratio was 96.36%; 2024's ratio was 92.48%; and, 2023's ratio was 85.83% Competitor: 2025's ratio was 47.59%; 2024's ratio was 34.59%; and, 2023's ratio was 41.61% C) Rose Music: 2025's ratio was 96.40%; 2024's ratio was 92.48%; and, 2023's ratio was 85.93% Competitor: 2025's ratio was 47.34%; 2024's ratio was 47.59%; and, 2023's ratio was 34.59% D) Rose Music: 2025's ratio was 92.58%; 2024's ratio was 96.36%; and, 2023's ratio was 85.83% Competitor: 2025's ratio was 35.32%; 2024's ratio was 47.59%; and, 2023's ratio was 41.61%

600

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Answer: B Explanation: Input the given data into Excel worksheets, and use the macro functionality to record a macro routine that calculates Rose Music's return on assets for all three recent years. Then, run the same macro on Competitor's data. As a first step, you may need to enable macros on your data file. After enabling macros, go to Rose Music's data, select the View tab, and choose Record Macro from the Macros drop-down menu. Name your macro "ReturnOnAssets." Now, select cell B4, type the formula =B3/B2, and hit enter. Copy this formula into cells C4 and D4. Go back to the View tab, and select stop recording from the Macros drop-down menu. Next, go to Competitor's data, and select cell B4. Go to the View tab and run "ReturnOnAssets" from the Macros drop-down menus. Your macro should perform the same calculations on Competitor's data as it did for Rose Music's data for the years 2025, 2024, and 2023. The results should resemble the following tables:

Diff: 2 LO: 10-3 Bloom: AP Min.: 2 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

601

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53) Stephanie is a financial accountant for Rose Music, a company that provides a third-party platform for artists to host music that fans can purchase and download. As a financial accountant, Stephanie is concerned with various ratios, so she collected information from Rose Music's and a rival company's (Competitor) financial statements:

For the year 2024, compare Rose Music's and Competitor's returns on assets (Net Income/End of Period Assets) with the industry's mean return on assets of 97.2%. Build a macro in Excel to help with your analysis. Round your final answer to nearest 2 decimals. A) Competitor's return on assets is closer to Rose Music's, but both lag behind the Industry average of 97.2%. B) Competitor's return on assets is more than the industry's average and almost double the return on assets that Rose Music has. C) Rose Music's return on assets is far better than Competitor's, but both are below the industry average of 97.2%. D) Rose Music's return on assets is very close to both Competitor's and the industry average of 97.2%.

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Answer: C Explanation: Add 2024's data into Excel, and use the macro functionality to record a routine that determines Rose Music's return on assets for 2024. Then, run the macro on Competitor's data. As a first step, you may need to enable macros on your data file. After enabling macros, go to Rose Music's data, select the View tab, and select Record Macro from the Macros drop-down menu. Name your macro "ReturnOnAssets." Now, select cell B4, type the formula = B3/B2, and hit enter. Go back to the View tab, and select stop recording from the Macros drop-down menu. Next, go to Competitor's data, and select cell B4. Go to the View tab and run ReturnOnAssets from the Macros drop-down menu. Your macro should perform the same calculation for Competitor's 2024 data. The results should resemble the following tables:

Diff: 3 LO: 10-3 Bloom: E Min.: 2 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

603

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54) Don is an accountant for a lending institution and helps management make decisions. He is very excited to adopt new developments in data and analyses and decided to incorporate some cognitive tools. Don programmed a model for data classification purposes, and made some decisions based on the outcomes. He finds his mailbox full of requests to recheck loan applications, because applicants believe their credit ratings are too good for rejection of their applications. Select the best statement below that justifies Don's decision to reject their loan applications, and decide whether some applicant's requests to recheck their results are valid. A) Cognitive technologies involve some risks, but Don should not recheck those loan applications manually. B) Use of cognitive tools involves no risks, but Don should still recheck those loan applications manually. C) Use of cognitive tools involves no risks, so Don should not recheck those loan applications manually. D) Use of cognitive tools involves some risks, so Don should recheck those loan applications manually. Answer: D Explanation: Cognitive technologies can make processes more efficient by having artificial intelligence mimic human judgements. While this is a great advancement in technology, it is not without inherent risks. Even though Don programmed his system, there is never a 100% guarantee that all the data outputs and judgements are 100% correct. Don should recheck any applications in question by hand to determine the accuracy of his system's decisions. Diff: 2 LO: 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

604

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55) Ahmed is an accountant for a lending institution and helps management make decisions. He is very excited to adopt new developments in data and analyses and decided to incorporate some cognitive tools. Ahmed programmed a model for data classification purposes, and made some decisions based on the outcomes. He finds his mailbox full of requests to recheck loan applications, because applicants believe their credit ratings are too good for rejection of their applications. Which of the following represents a risk that exists when implementing cognitive technologies for use in this decision-making process? A) Ahmed's potential biases likely had no influence over the design of the system, but they may have impacted current applications. B) Ahmed's potential biases may have influenced the design of the system, and that has caused unnecessary rejections. C) The company may end up spending more money than they had previously spent to complete the same tasks. D) There is no risk. Customers will be happier with the process now that the application processing is faster. Answer: B Explanation: Cognitive technologies can make processes more efficient by having artificial intelligence mimic human judgements. While this is a great advancement in technology, it is not without its own risks. Since Ahmed normally performs this task and he helped to create and implement it, his own biases may have influenced the way the system behaves. The remaining choices are either untrue or do not represent a risk that would impact the use of cognitive technologies in this capacity. Diff: 2 LO: 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

605

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56) Journey Inc. is an outdoor sporting goods company that focuses its retail efforts in cities bordering the Appalachian Trail. In recent years, the company debated increasing its efforts to create and promote an online presence. As management prepares to make a timeline for what it would take to launch a new website, they are reaching out to various departments for help. Which of the following suggestions would represent the most effective way to minimize on-site storage costs? A) A financial accountant suggested using data mining to take a closer look at salary and wage expenses accounts for the IT department. B) A managerial accountant suggested using different cloud services based on their data needs and characteristics. C) A tax accountant suggested creating a routine process automation to streamline monthly sales tax filings in the cloud rather than manual local processing. D) An auditor suggested using data mining on the most recent month's sales data to perform substantive testing. Answer: B Explanation: Journey Inc. would like to minimize on-site storage costs now that they are seriously considering launching a nationwide online presence. While the suggestions made by employees from various departments as listed are all contributing to Journey Inc. adopting more technologically advanced practices, it is the managerial accountant whose suggestion is most line with the specific goal of minimizing on-site data storage costs. By using different cloud services based on their actual data characteristics, Journey Inc. could adequately plan its data storage needs in a cost-effective way. Diff: 2 LO: 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

606

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57) Jennifer is a senior tax accountant for Fluffy Fido's, a gourmet dog treat company that operates nationwide. Jennifer's department spends a considerable amount of time each month compiling data and completing sales and use tax reports. Management asked Jennifer and the tax team to compile tax data to make projections for the following year. From the following list of options, what choice of data analysis tools would you suggest to help Jennifer's department? A) Cognitive technologies could determine any taxes associated with operating profits in multiple tax jurisdictions. B) Process mining could determine which areas of the country are collecting the most sales tax from customers. C) Robotic process automation could create a dashboard where management can view sales taxes collected by state. D) Textual analysis could provide a better understanding of the federal tax code and how it might impact their sales in the coming year. Answer: A Explanation: As a whole, tax accountants were some of the last within the accounting profession to adopt the use of data analysis tools. Now, tax accountants have many uses for various data analysis tools on the market. In the scenario described, Jennifer's team is spending a lot of time completing monthly sales and use tax reports. As such, they need to expedite some or all the work involved in this task. Using cognitive technology to determine taxes for multiple tax jurisdictions could prove very helpful since this can be an incredibly time-consuming endeavor. The remaining options may also prove helpful for other aspects of the work performed by Jennifer's team but not necessarily in this situation. Diff: 2 LO: 10-1, 10-2, 10-3 Bloom: E Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

607

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58) Katherine works as an accountant for Global Dynamics, a company that specializes in buying production equipment at wholesale prices and reselling it to customers. She has collected results from a survey recently distributed to all its customers in the past month. She received a total of 118 responses that surpassed her initial expectation of receiving 100. Katherine would like to use this information in a meaningful way. Of the following list of choices, which choice would be the best way for Katherine to begin to effectively use textual analysis in this situation? A) Use Alteryx to import the data and search it for positive phrases provided by the customers. B) Use Alteryx to stratify the data based on feedback given within the survey. C) Use Excel to create a distribution chart based on customers' feedback captured with the survey. D) Use Excel to stratify the data based on the date and time that data was collected for the survey. Answer: B Explanation: Textual analysis and a data analysis tool will play an integral part in the success of Katherine deriving meaningful information from this data. When performing textual analysis in Alteryx, she must first stratify the data based on the feedback given. Alteryx is better than Excel at this because it is a more sophisticated program. From there, Katherine can create distribution charts and determine how the company is perceived by its customers. The remaining options can also be a part of what Katherine does, but they would not be how she should begin. Diff: 2 LO: 10-1, 10-2, 10-3 Bloom: AP Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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609) The management at a bottle manufacturing plant recently tasked a staff accountant with analyzing data to identify an area with potential cost savings. The accountant identified the glass bottle segment as an area could reduce costs by implementing a few changes. As it pertains to the data analysis value creation chain, which of the following represents strategy shifts in the company's journey to reduce costs of glass bottle segment? A) The accountant collected and analyzed data on the current costs for the glass bottle division's operations. B) The company instituted a policy requiring retention of all leftover glass pieces instead of discarding them. C) The company placed a request for comparative price quotes with two additional vendors. D) The company was able to sell previously wasted materials to another local company. Answer: B Explanation: The data analysis value creation chain helps accountants and their respective companies increase operational effectiveness and achieve certain metrics. A new policy instituted by the company that changes operations for part of the organization is the best example of a Strategy Shift. The remaining choices represent other parts of the data analysis value creation chain: data analysis, new intelligence, and value creation. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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610) The management at a bottle manufacturing plant recently tasked a staff accountant with analyzing data to identify an area with potential cost savings. The accountant identified the glass bottle segment as an area could reduce costs by implementing a few changes. As it pertains to the data analysis value creation chain, which of the following represents new intelligence in the company's journey to reduce costs for the glass bottle segment? A) After incorporating key changes, the company can now market and brand itself as a green brand. B) The accountant collected and analyzed data on current labor costs for the glass bottle division. C) The company determined using newly created glass instead of recycled glass leads to cost inefficiencies. D) The company implemented a policy to use recycled glass to create its bottles. Answer: C Explanation: The data analysis value creation chain helps accountants and their respective companies to increase operational effectiveness and achieve certain metrics. The company learning that the current way of doing something has led to a cost inefficiency best represents the new intelligence phase. The remaining choices represent other parts of the data analysis value creation chain: data analysis, strategy shifts, and value creation. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 61) Stunning Stilettos is an upscale women's shoe store that has locations nationwide with a central office in New York. The company decided to automate certain processes using robotic process automation (RPA). Currently, the management accountant spends almost an entire day manually performing ratio calculations to present to managers every week. How can the implementation of RPA reduce the management accountant's hours spent on this task? A) RPA could mine data needed to complete the report, and that would reduce time spent compiling the data. B) RPA could reduce the number of times the presentation is done to once every two weeks. C) RPA could write a script to calculate and compile the ratios used in the report. D) RPA could write a script to generate the report presented to management once the information is in the system. Answer: C Explanation: RPA is an incredibly useful tool for companies able to effectively implement it into their systems. RPA is most effective when used to assist with routine, repetitive, stable tasks. In the task described above, writing a script to calculate and compile ratios for a report would be the most likely scenario to reduce time taken to complete the given task. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 610

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62) Stunning Stilettos is an upscale women's shoe store that has locations nationwide with a central office in New York. The company decided to automate certain processes using robotic process automation (RPA). Which of the following employees would most benefit from this use of RPA? A) The accounting information systems accountant who performs routine data and system maintenance daily B) The auditor who is testing transactions for routine qualities and spends about two days per test run on this C) The financial accountant who spends an entire day once a month posting correction entries to the general ledger D) The tax accountant who is working on completing monthly sales tax filings for their clients that usually take a couple of days per month Answer: A Explanation: RPA is an incredibly useful tool to companies able to effectively implement it into their systems. An accounting information systems accountant would be the most likely to benefit from the use of RPA since their task is a stable process where steps are unlikely to change over time. The remaining choices represent tasks performed by employees that require a bit more nuance and human judgement. Other technologies would aid these tasks, but they currently require the continued use of human completion. RPA could be used on the information collected after the completion of these other tasks. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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612) Yummy Jerky is a regional creator of vegan artisanal soy jerky it sells to local grocery stores.To gain insight into brand awareness, it hired a local managerial accountant to do some analysis. If Yummy Jerky wants to know whether its customers view the company favorably, then data which best reflects the most appropriate way for the managerial accountant to use textual analysis? A) Examine the results of a recent email survey sent to customers who signed up through a rewards program. B) Look at the most recent company annual report for key phrases about customer preferences. C) Search food-related blogs on the internet for mentions of the company, and then analyze the results. D) Search social media for hashtags containing references to Yummy Jerky and document any findings. Answer: A Explanation: Textual analysis is a helpful tool for organizations as they navigate a world of increased online presence on various platforms and websites. If Yummy Jerky is looking for information about whether its customers view the company favorably, then a managerial accountant analyzing a recent email survey's results would be the most appropriate way to accomplish this. The people responding are agreeing to share their thoughts and feelings, and this information is useful when analyzing favorability in that demographic. The remaining choices might present the company with insights into how various populations view the company, but its desired analysis requires further refinement. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

612

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613) Yummy Jerky is a regional creator of vegan artisanal soy jerky it sells to local grocery stores.To gain insight into brand awareness, it hired a local managerial accountant to do some analysis. If Yummy Jerky would like to know what the risk of bankruptcy may be, then which best data reflects the most appropriate action for the staff accountant to take? A) Use cognitive technologies to model an estimate of Yummy Jerky's risk of bankruptcy. B) Use continuous auditing to model an estimate of Yummy Jerky's risk of bankruptcy. C) Use robotic process automation to create a dashboard to automatically update company debt percentage ratios daily. D) Use textual analysis to search recent auditor letters and reports for keywords that indicate a potential risk of bankruptcy. Answer: A Explanation: If a company wishes to calculate and predict potential outcomes, then several options could be helpful. Of the choices presented, using cognitive technologies to model Yummy Jerky's risk of bankruptcy would be the best and most appropriate choice. Using artificial intelligence, cognitive technologies are programmed to perform probabilistic predictive calculations. Using robotic process automation could be helpful, but they use the correct ratios, and the company debt percentage alone is unlikely to help Yummy Jerky gain a deep enough insight. They would not use continuous auditing in this scenario, and textual analysis could help look for signs that auditors have bankruptcy risk concerns, but this would not help management or the company know more specifically what the actual risk might be. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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614) Jenny's Jewelry recently underwent a management change, and the new managers have a personal stake in making the company as efficient as possible. One of the tasks delegated to its accounting staff is the analysis of various company metrics. Which of the following best represents a task given to the company accountants that would best aid management with meeting their objective of analyzing company data? A) Have a financial accountant use robotic process automation for monthly journal entries so the financial information is available for analysis faster. B) Have a managerial accountant perform textual analysis on Jenny Jewelry's most recent annual report looking for keywords about financial metrics. C) Have a managerial accountant use robotic process automation to automatically calculate the company's departments with the highest gross profit percentages. D) Have an auditor use continuous auditing to assist in their testing procedures freeing them up to perform the desired analysis. Answer: C Explanation: As technology evolves with the needs of business, so does its capability to help a business understand its own performance. If management wants to analyze data and have accountants assist, then it is important to think about what areas of accounting specialize in certain tasks. It would be acceptable to have a managerial accountant use robotic process automation (RPA) to automatically calculate a ratio or percentage. While the other choices also present ways to do analyses, perhaps faster, they are not specific enough to know how helpful those methods would be for achieving this objective. Additionally, while textual analysis can be helpful, if a managerial accountant was looking at Jenny's recent annual report, then they would be looking at existing ratios and calculations rather than analyzing new data or providing new insights. Diff: 2 LO: 10-2, 10-3 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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615) Jenny's Jewelry recently underwent a management change, and the new managers have a personal stake in making the company as efficient as possible. One of the tasks delegated to its accounting staff is the analysis of various company metrics. Which of the following describes the most efficient way to use Excel to compare liquidity ratios for Jenny's Jewelry and competitors? A) Use Excel to record a macro for Jenny's accounts receivable turnover for one year, and then apply it to three to five more years for Jenny's Jewelry. B) Use Excel to record a macro for Jenny's accounts receivable turnover over several years, and then apply it to the other companies. C) Use Excel to record a macro for Jenny's working capital ratio for one year, and then apply it to three to five other years for Jenny's Jewelry. D) Use Excel to record a macro for Jenny's working capital ratio over several years, and then apply it to the other companies. Answer: D Explanation: Microsoft Excel is a valuable tool for companies engaging in data analysis. If a company wants to compare liquidity ratios of several companies, then it will ideally calculate a ratio, such as working capital, over the span of several years by applying a formula and recording a macro. Then, they can apply that macro to other companies' data and compare the results to Jenny's Jewelry. Calculating data for a single company over a span of a few years does not necessarily require macros. Accounts receivable turnover is a very important ratio, but it is not a liquidity ratio, so that makes it a less acceptable choice than working capital ratio would be in this scenario. Diff: 2 LO: 10-2, 10-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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616) Healthy Homes Inc. is a company that manufactures and sells biodegradable furnace filters, ararity in the industry. Now that the company has been in existence for a few years, management wants to transition from its current informal ad hoc data analysis methodology to a more organized one. Between Alteryx and Excel, which tool should they consider to assist with data analysis needed for their annual report if their main goal is to make their future operations more efficient and why? A) Alteryx, because it contains a detailed and thorough workflow tracking system that makes future analyses very straightforward. B) Alteryx, because it provides an electronic means to capture workflow in a visually appealing manner. C) Microsoft Excel, because it contains macros that make analyzing data over many cycles more efficient. D) Microsoft Excel, because it contains macros that make comparing data between Healthy Homes and its competitors more efficient. Answer: A Explanation: Healthy Homes is considering the use of a more formal data analysis tool to prepare the data to include in its annual report. If the main goal is to make operations more efficient, then Alteryx would be the better choice because it is more powerful, versatile, and user-friendly. Alteryx overcomes many of the common limitations of using just Excel such as the difficulty associated with managing multiple tabs in the spreadsheet linked by VLOOKUPS or other functions. Excel is more widely used, and while it has many great features, it does not perform as efficiently as Alteryx making it the less desirable choice between the two. Diff: 2 LO: 10-2, 10-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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617) Healthy Homes Inc. is a company that manufactures and sells biodegradable furnace filters, ararity in the industry. Now that the company has been in existence for a few years, management wants to transition from its current informal ad hoc data analysis methodology to a more organized one. The company has chosen the Alteryx data analytics tool to serve its data analysis needs. Which of the following would be the best possible reason for them to select Alteryx over Excel? A) Alteryx automatically formats data into currencies and Microsoft Excel does not. B) Alteryx is easy to set up and does not have a steep learning curve like Microsoft Excel does. C) Alteryx software takes less time to set up than Microsoft Excel. D) Alteryx workflows run with new period's data without having to make alterations. Answer: D Explanation: Alteryx and Microsoft Excel are both effective tools for data analysis. Depending on an organization's objectives, either could be a great choice. Of the choices listed, it is true that Alteryx workflows run with new data without having to alter the existing workflow. It is not true that Excel takes more time to set up than Alteryx nor is it entirely accurate that Excel would be easier for a different user to follow in the event they wanted to utilize what was set up by another. It is also not true that Alteryx will automatically format results into currency when Microsoft Excel does not. Ultimately, the company made a great decision by selecting a data analytics tool such as Alteryx as it will perform well over time. Diff: 2 LO: 10-2, 10-3 Bloom: AP Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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618) Darryl works for a company that manufactures toy dogs. These dogs are incredibly lifelike, and the company allows children to obtain an adoption certificate, pet toys, and grooming tools to care for their new furry friend. After an order is placed, the toy is custom built and shipped directly to the customer. Darryl process mined the company's sales cycle data and identified the following major events: -Sales data is captured at the point of sale (either online or at a physical retail location). -This data is converted into a journal entry posted at the end of each day. -Once the processing department receives the orders as sales occur, shipments are made, and inventory is reduced. -The financial accountant matches deposits from stores with credit card payments to sales data collected by the point-of-sale system that generates the invoices for the processing department. What criteria would Darryl use to assess the effectiveness of this setup from a process mining perspective? A) Adding the total number of sales captured in the point-of-sale system to any handwritten tickets B) Counting the number of orders paid for that were not processed within the same accounting period C) The length of any delays between cash collection and bank deposits made from sales D) Verifying whether all sales and cash collected are posted to the appropriate sub-ledgers Answer: B Explanation: In order to fully observe and analyze the processes attributable to this cycle, Darryl may want to assess each major event separately. The most effective criteria Darryl could use would be the total number of orders that were paid for but not yet processed within the same accounting period because the processing department would have this information. In order to comply with GAAP, revenue has to be recognized in the period that it was earned in. Diff: 2 LO: 10-2, 10-3 Bloom: E Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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619) Darryl works for a company that manufactures toy dogs. These dogs are incredibly lifelike, and the company allows children to obtain an adoption certificate, pet toys, and grooming tools to care for their new furry friend. After an order is placed, the toy is custom built and shipped directly to the customer. Darryl is working on process costing for the company's sales cycle and identified the following major events: -Sales data is captured at the point of sale (either online or at a physical retail location). -This data is converted into a journal entry posted at the end of each day. -Once the processing department receives the orders as sales occur, shipments are made, and inventory is reduced. -The financial accountant matches deposits from stores with credit card payments to sales data collected by the point-of-sale system that generates the invoices for the processing department. Darryl wants to analyze the financial accounting department's role in the sales cycle. What question would you suggest that he ask to better understand this from a process mining perspective? A) Are all processed orders recorded and captured in the system as a reductions in inventory? B) Are all sales captured in the point-of-sale system, or have there been handwritten tickets? C) What is the delay between the capture time and recording time of all sales regardless of payment method? D) What is the delay between the time a customer's payment is made and the processing and shipping of the product to the customer? Answer: D Explanation: In order to fully observe and analyze the process attributable to this cycle, Darryl may want to ask questions of each major event separately. As it pertains to the financial accounting department, Darryl may ask what the delay between receiving a customer's payment and processing and shipping the product to the customer is. This will ensure journal entries are being recorded in the appropriate accounting period. The remaining questions are worth asking, but Darryl would likely ask them of the sales or processing and shipping departments. Diff: 2 LO: 10-2, 10-3 Bloom: S Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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71) Cooper wants to migrate his company's data storage from an on-site system to a cloud-based one. Management needs to understand why this switch would be beneficial. Which of the following benefits would result from migrating their data storage to cloud-based data services? Select all that apply. A) Data storage capacities are more easily expandable. B) Extra physical barriers will make the data more secure. C) The company will have access to advice from IT professionals. D) The data will have expert management. Answer: A, C, D Explanation: Cloud-based data services include data storage on the cloud and have many known benefits. These benefits include changing data storage capacities easily, having expert data management, and having advice from IT professionals. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 72) Cooper wants to migrate his company's data storage from an on-site system to a cloud-based one. Management needs to understand why this switch would be beneficial. Management needs to understand why this switch would be beneficial. Which of the following factors considerations impact their selection of a data cloud service? Select all that apply. A) How often employees will be able to monitor the cloud during off-peak hours B) The budget allotted by the company for cloud data services C) The number of employees the company has D) The volume of data that the company needs to store Answer: B, C Explanation: Cloud-based data services include data storage on the cloud, and while there are many different vendors to choose from, a company should first determine its internal needs. Knowing how much money the company budgeted for cloud data services and the volume of data the company needs to store help the company choose the data cloud services provider that is best for them. The number of employees working for the company and how often employees would be able to monitor the cloud during off-peak hours are not relevant to this decision. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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73) The five Vs of data describe characteristics of data to help add value to its analysis. Each of these characteristics can impact different areas of accounting in different ways. Which of the following are high velocity data for financial accounting? Select all that apply. A) Cash transactions B) Changes in local, national, and international tax laws C) Social media tags that identify legal risks and market intelligence D) Stock price variations on the NYSE Answer: A, C, D Explanation: Data velocity refers to the speed of generation or change for that data. In financial accounting, examples of high velocity data include social media tags, cash transactions, and stock price changes, while changes in tax laws take much longer, occur with much less frequency, and do not vary much in the short term. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 74) The five Vs of data describe characteristics of data to help add value to its analysis. Each of these characteristics can impact different areas of accounting in different ways. From a managerial accountant's perspective, which type of data should have high veracity? Select all that apply. A) Firewall traffic B) Prices and costs C) Security alerts D) Vendor and customer data Answer: B, D Explanation: Data veracity refers to the integrity or reliability of that data. For a managerial accountant, both prices and costs as well as vendor and customer data need to be reliable and from trusted sources to inform their decisions. Firewall traffic data and security alerts data will not generally be as relevant to a managerial accountant. Diff: 1 LO: 10-1 Bloom: C Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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75) Karen is an accountant at Home Décor Plus, a retail store that specializes in trendy home décor items. Karen oversees a data analysis project that aims to provide additional insights about customer satisfaction and company sales. In terms of the data's value, what data from the following list should Karen consider? Select all that apply. A) Daily weather forecasts that may impact when customers are most likely to stop by a store to shop B) Data captured from a store app on customers' phones indicating the number of times they visit a given retail location C) Sales revenue generated from new and returning customers over the past year D) Sofa covers' stain resistance ratings obtained from customer surveys Answer: C, D Explanation: Karen can derive useful insights during this analysis project. When her focus is on the data's value, knowing what sales revenue new and returning customers generated and examining sofa covers' stain resistance ratings obtained from customer surveys are valuable for evaluating overall customer satisfaction. Data captured from an app about how often a customer visits a specific location is example of volume and/or variety, and daily weather forecasts would also impact the data's volume. Diff: 2 LO: 10-1 Bloom: AN Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 76) Amanda is considering applying for a position as an accounting professional. She is gathering information and trying to assess accounting technologies currently in demand. Help Amanda determine which of the following are relevant examples of the data and analysis tools accountants currently use to create value in their data analyses. Select all that apply. A) Cognitive technologies perform data classification for diagnostic or predictive purpose. B) Process mining tools evaluate business processes. C) Textual analyses provide insight from textual sources like blog posts or annual reports. D) Word processing programs allow for consistent documentation. Answer: A, B, C Explanation: In today's business environment, companies expect their accountants to do more than accounting. Process mining tools, textual analyses, and cognitive technologies are all examples of data analysis tools and associated methodologies used by accountants to create value in their data analyses. A word processing tool also creates value but not specifically in a data analysis capacity. Diff: 1 LO: 10-2 Bloom: K Min.: 1 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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77) Amanda is considering applying for a position as an accounting professional. She is gathering information and trying to assess what skillsets employers expect their employees to have. Which of the following abilities or skills do employers expect accountants in today's business environment to have? Select all that apply. A) Critical thinking skills B) Extensive knowledge of human resource protocols C) Problem solving skills D) Technical agility and adaptability Answer: A, C, D Explanation: In today's business environment, employers expect accountants to do more than accounting. Being able to think critically, having agility and adaptability with technology, and being a problem solver are all traits accounting employers seek. Being well-versed in human resource protocols would come in handy, but it is not generally a skill currently in demand by potential accounting employers. Diff: 1 LO: 10-2 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 78) Different areas of the accounting profession use data analyses and related tools in varied ways. Depending on the accounting area, accountants are integrating data analysis tools into their tasks affording them the opportunity to focus on other tasks. For accounting information systems, which of the following ways are robotic process automations (RPAs) used? Select all that apply. A) Automatic performance reporting for department managers B) Automating system updates C) Detecting unauthorized intrusions D) Implementing internal controls E) Routine data and system maintenance Answer: A, B, E Explanation: RPAs are useful for automating tasks involving using pre-recorded keystrokes run in the same sequences repeatedly. In accounting information systems, RPAs are best suited for performing routine maintenance, running various system updates, and generating repeated performance reports for department managers. Other data analysis tools detect unauthorized intrusions and implement internal controls. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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79) Different areas of the accounting profession use data analyses and related tools in varied ways. Depending on the accounting area, accountants are integrating data analysis tools into their tasks affording them the opportunity to focus on other tasks. In auditing, which of the following are uses of cognitive technologies? Select all that apply. A) Classifying unusual transactions B) Diagnosing internal controls C) Evaluating ongoing concerns D) Performing risk level assessments E) Selecting better samples for yearly testing Answer: A, C, D Explanation: Cognitive technologies perform tasks that humans used to do. Many industries implement cognitive technologies to help complete assignments. In auditing, cognitive technologies evaluate ongoing concerns, classify unusual transactions, and assess risk levels. Other types of data analysis tools select better testing samples and evaluate internal controls. Diff: 1 LO: 10-3 Bloom: K Min.: 1 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 80) Does data quality impact the results of data analysis? Provide an example that supports your response. Answer: Data quality has a large impact on the results themselves and the utility of those results. A company should always do analysis on the highest quality data possible. For example, assume a company surveys a specific demographic it hopes to target (people in a specific age range). Even if they receive sufficiently many responses, if they neglected to ask for respondents' ages, then they would lack the necessary information for what they want to study. Diff: 1 LO: 10-1 Bloom: C Min.: 2 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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81) What are the five Vs of data? What does each of these entail? Answer: The five Vs of data are Volume, Variety, Velocity, Veracity, and Value. Data volume is the amount of data selected for analysis, data variety refers to the diversity of data structures and measurement scales in the data selected for analysis, data velocity refers to the speed with which new data points are generated by the data source or sources, data veracity refers to the reliability or integrity of the data selected for analysis, and data value refers to how potentially beneficial the data selected for analysis is to the analysis' objective. Diff: 1 LO: 10-1 Bloom: K Min.: 2 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 82) What is a data cloud? What kinds of data clouds exist for organizational use? Answer: A data cloud is a data service and solution that offers organizations a way to securely store large amounts of data on large servers. There are three kinds of data clouds: Private, Public, and Hybrid. Private clouds are designed for use by a single organization, public clouds secure and store data from multiple organizations or users on shared servers, and hybrid clouds exhibit a mixture of both private and public clouds' characteristics. Diff: 1 LO: 10-1 Bloom: K Min.: 2 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 83) Using two of the data Vs, describe emergent complexities within the area of data privacy. What role does technology play in this? Please provide an example with your response. Answer: In today's business landscape, technology is an integral part of operations. Two Vs that demonstrate privacy-related complexities are Velocity and Volume. Data velocity refers to the speed with which new data points are generated, and data volume represents the amount of data selected for analysis. Many applications use both Vs to help users make faster data-informed decisions as quickly and efficiently as possible. One example of this is a user using an app to obtain directions to a destination. As the user approaches their destination, whether by car, plane, train, etc., the app updates their location and provides the best directions according to the app's optimization parameters. Diff: 2 LO: 10-1 Bloom: C Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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84) What is data mining? Provide an example of data mining, and describe how an accountant could use it to make data-informed improvements to operations. Answer: Data mining involves looking for patterns and impacts within or between data fields in a systematic way. Data mining can afford its user the opportunity to gain a deeper understanding of patterns and relationships between the data points in a data set. For example, a managerial accountant could produce a report based on the mined data to determine what costs increased over the past year and what costs decreased. Diff: 1 LO: 10-2 Bloom: C Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 85) What are cognitive technologies? Provide examples of industries that could utilize this technology. Are there any risks involved with implementing this technology? Answer: Cognitive technologies use Artificial Intelligence to create algorithms that mimic expert-level human judgment and a variety of industries including accounting, banking, farming, retail, tourism, and healthcare could benefit from implementing cognitive technologies. While the technology can assist in making predictions based on an organization's data, two possible risks are potential biases carried over from the expert the technology is mimicking and vulnerabilities to external security attacks. Diff: 2 LO: 10-2 Bloom: C Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 86) What is blockchain technology? Provide an example of how blockchain technology can create a more secure environment for accounting. Answer: Blockchain technology is one of the newer options available online that allows for the secure storage of one shared record of transactions between parties. For example, an accountant may utilize blockchain technology to initiate a service contract with a new client and use a contract template to ensure that all the data conforms to GAAP for revenue recognition purposes. Diff: 1 LO: 10-2 Bloom: K Min.: 2 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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87) Which areas of accounting currently benefit from the use of new data and analysis technologies? Provide an example of a use in one of these areas. Answer: Financial, Managerial, Auditing, and Taxation are all areas of accounting that benefit from the implementation, evolution, and use of new data and analysis technologies. For example, in auditing, both internal and external auditors implement new technology to improve efficiency of their testing during their audits by streamlining their processes. Diff: 1 LO: 10-3 Bloom: K Min.: 2 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 88) Which area of accounting practice has been the slowest to adopt widespread use of data analytics? Provide an example of how implementing a new technology has improved this practice. Answer: Tax accounting is the field with the slowest implementation of data analytics, but the field has seen an increase in the speed with which tax accountants are discovering new and interesting ways to utilize these new technologies. For example, tax accountants can use data mining visualizations to demonstrate a comparison of a client's regular net income and compare it to the results after the inclusion of a particular tax deduction. Diff: 1 LO: 10-3 Bloom: C Min.: 2 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 89) How do reporting requirements for managerial accounting differ from reporting requirements for financial or tax accounting? How can these differences improve managerial accounting's use of new data and analysis technologies? Answer: Financial accounting must adhere to rules as prescribed by GAAP, and tax accounting must abide by the rules enforced by the IRS; whereas, managerial accounting has no such stipulations. Managerial accounting is afforded the opportunity to function under a much broader set of rules as set forth by an individual organization while aiming to serve internal parties rather than accurately report to external entities. Managerial accountants are able to leverage their close and trusted position to implement new data technologies to create data that better assists management with internal goals rather than having to adhere to strict rules and regulations from GAAP or the IRS. Diff: 2 LO: 10-3 Bloom: AP Min.: 2 AACSB: Knowledge AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 90) Eloquent Editions is an online retailer that specializes in the publication and sale of poems 627

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from lesser-known artists. As a business entering its third year, it is concerned with ensuring it is setting a new sales price high enough to cover its expenses and turn a profit while staying competitive in the market. With respect to data value, what information will be most important for the accountants to obtain to assist the organization in achieving these objectives? Consider any potential limitations the accountants may encounter in your response. Answer: Data value refers to the unique benefits provided by data given the desired objective. Eloquent Editions wants to determine what price it needs to sell its products for to cover expenses while turning enough profit to stay competitive. With that objective in mind, the accountants want to collect data to assist them in analyzing gross profits, net income, and sales price data collected from market competitors. Potential issues these accountants may encounter could include increases in both costs of goods purchased and expenses not yet recorded in the records, a lack of comparable competitors, and unpredictable market changes. Diff: 2 LO: 10-1 Bloom: AN Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 91) Lana is a tax accountant who recently opened her own small practice where she specializes in preparation of small business and personal tax returns. As a new business owner, Lana has many decisions to make to both be successful and to attract and retain clients. Questions A. In her line of work, what role could ethics play? B. What privacy-related considerations should Lana consider in her work? Answer: A. Accountants, as professionals, are expected to act in upstanding and ethical manner. Tax accountants should be extremely ethical since they handle very personal and sensitive financial data including social security numbers and yearly income and expenditure amounts. For Lana, this means making decisions in the best interest of her clients. B. She must take precautions to ensure her clients' personal information and sensitive financial data remain secure and private. If her preparation software is connected to the internet and not completely paper-based, then she will need to make sure her software has the appropriate security integrated, that she has established appropriate browser privacy settings including removing cookies and clearing caches, and she should to look into using a virtual private network. By taking these steps, Lana would act in an ethical manner to ensure the privacy of her clients in a professional and respectful manner. Diff: 2 LO: 10-1 Bloom: AP Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 92) A local construction company has been evaluating its offerings that include interior painting, 628

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exterior painting, small electrical repairs, minor plumbing repairs, and drywall installation and repair. It has recently contracted Jordan to determine which of its offerings yielded the highest revenue, which job type has the fastest turnaround, and which service gets the most bookings? Take a moment to reflect on what the organization is trying to achieve. How could Jordan use data mining to answer these questions and gain insights? Provide an example of how Jordan could use data mining to address each concern. Answer: Data mining looks for issues and patterns in data sets. The way mined data is analyzed varies depending on the objectives of the organization. The construction company has identified specific objectives for Jordan to investigate, and data mining can help address each. To determine the offering yielding the highest revenues, Jordan could extract sales data from invoices entered in the system and categorize the data by service offerings to determine which has the largest total revenue. Jordan could use job codes from payroll to determine when a job started, use invoice dates to determine time spent per job, and organize each case by length of time to complete. To determine which services have the most bookings, Jordan could extract sales data separated by the service offerings, determine the number of times each service is requested, and then create a comparison. Diff: 2 LO: 10-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 93) Tara works as an accountant for a local electrician. Her boss recently approached her about whether some of the processes used by her department could be automated. After some consideration, Tara realized the accountant assigned to tracking budget-related costs currently spends almost an entire day each week manually preparing the budget data for the database where managers see their overall spending on a per-project basis. How can Tara use robotic process automation (RPA) to automate parts of this process, and what major benefits could this change provide? Answer: The current process has steps done manually that RPA could streamline. Rather than having to update the data in the database manually, RPA could create a script that would update the budget information electronically through a series of memorized keystrokes. Tara could then think about using RPA to mine budget data daily or weekly and use that to update and display actual information on a neat and user-friendly dashboard. The major benefits to this would include a reduction of time the accountant spends massaging data while providing managers with near-real-time budget data for their use. This could lead to optimized project management and a more efficient use of resources. Diff: 2 LO: 10-2 Bloom: AP Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics 94) Snazzy Snaps is an online retailer that sells trendy bows and headbands targeted towards 629

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fashionable teenagers. It extracted financial data from its AIS database. Snazzy Snaps asked its accountant to analyze that data and let them know whether to discontinue their headbands, a net loss-producing product line. This data includes summarized monthly totals for sales, selling prices, and projected costs for 2025 for both product lines. Please refer to the "Snazzy Snaps" data file to answer the following questions. Questions A. Use Excel to create a comparative income statement for both products Snazzy Snaps currently sells. B. Use that comparative income statement to explain the financial impact discontinuing headbands would have on Snazzy Snaps. C. Do you have any recommendations for management? Do you believe the company should stop selling headbands?

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Answer: A. Open the "Snazzy Snaps" data file. For the ease of convenience, perform the following steps: Product Sorting: Step 1: Go to the Data tab, and select Sort. Step 2: In the pop-up window, be sure there is a check in the check-box for My data has headers. Step 3: Select Product in the first drop down list, Values in the second drop down list, and A to Z in the third drop down list to ensure the data is properly sorted. Step 4: Insert two rows where the Product changes from Bows to Headbands to separate the data into distinct product-based groups.

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Calculate Totals: Step 1: In each of the cells D18, I18, J18, K18, and L18, use the =SUM()formulas shown below on the values above those cells to determine the corresponding column totals for bows in year 2025. Below is the list of cell names and their corresponding formulas: D18 I18 J18 K18 L18

=SUM(D6:D17) =SUM(I6:I17) =SUM(J6:J17) =SUM(K6:K17) =SUM(L6:L17)

Step 2: Repeat the same process for the data in the headbands product group. The Excel sheet should resemble the following:

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Create a formatted income statement: Step 1: Beginning with Column N, construct the comparative income statement by entering the relevant column titles and row descriptions. Step 2: In cell O5, type Bows, in cell P5 type Headbands, in cell Q5 type Both Product Lines, and in cell S5 type Only Bows. Step 3: Enter the cell addresses and formulas as outlined below.

Your income statement for 2025 should resemble the following:

B. From this income statement we see that despite producing a net loss of $16,690, the headbands product line still generates a positive segment margin of $16,690. This positive segment margin indicates that the headbands product line still generates enough to cover the company's common fixed costs. Discontinuing the headbands product line would result in Snazzy Snaps losing that $16,690 of segment margin generated by it, and that would negatively impact the company's total net income. C. I would suggest management continue carrying both product lines, bows and headbands. Continuing both product lines shows a positive net income. If they omit and/or drop the headbands product line, then they would see an overall reduction of 50% in their net income because the bows product line would need to cover all unavoidable common fixed costs. Diff: 3 LO: 10-2 Bloom: S, E Min.: 10 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics 633

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95) Austin is a staff accountant for Merry Music Inc. and is in the process of analyzing its financial data. Specifically, Austin is curious about Merry Music's inventory and whether or not the company should be concerned with inventory turnover. The following table has data for Merry Music and two of its competitors for the years 2023 and 2024: Merry Music Inc.:

Funky Beats Company:

Jazzy Jingles Inc.:

Use the given data to answer the following questions: A. Build a macro in Excel to calculate inventory turnover (Cost of Goods Sold/Average Inventory) for each company for 2023 and 2024. B. What does inventory turnover mean for a company? C. Determine which of the companies had the highest inventory turnover.

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Answer: A. Add the given data into Excel worksheets and use Excel's macro functionality to record a routine for Merry Music that determines inventory turnover for 2023 and 2024. Then, run your macro for Funky Beats and Jazzy Jingles. As a first step, you may need to enable macros on your data file. After enabling the macros, go to Merry Music's data, select the View tab, and choose Record Macro from the Macros drop-down menu. Name your macro "InventoryTurnover." Now, select cell B5, type the formula = B4/((B2 + B3)/2), and hit enter. Copy this formula to cell C5. Go back to the View tab, and select Stop Recording from the Macros drop-down menus. Next, go into the other companies' worksheets one at a time, and select cell B5. Go to the View tab, and run "InventoryTurnover" from the Macros drop-down menus. Your macro should perform the calculations for each company for 2023 and 2024. The result should resemble the following: Merry Music:

Funky Beats:

Jazzy Jingles:

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B. Inventory turnover is a calculation of the number of times a company turns over (sells or uses, depending on the industry) its inventory during a given period. The higher the turnover, the more times inventory is being sold or used. C. Create the comparison worksheet that links all the inventory turnover results. From these results, Funky Beats clearly had the highest inventory turnover in both 2023 and 2024, and Merry Music reported the lowest inventory turnover. Diff: 2 LO: 10-2, 10-3 Bloom: AP, AN Min.: 10 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

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96) Within each business organization, there are likely to be technological analysis methods. These could be labeled as follows: 1. Continuous auditing 2. Data mining 3. Process mining 4. Robotic process automation 5. Smart contracts 6. Textual analysis Using these categories, assign the technology most appropriate to the scenario in each statement. Each of the six methods might appear once, more than once, or not at all. Please note that any statement may be suited to more than one of the six methods at a time.

a. b. c. d.

f. g. h.

Statement A tax accountant analyzed new IRS procurements to determine availability of new deductions for their clients with children. A financial accountant created a macro to update a new dashboard that updates stock prices needed by the finance department. An operations manager investigated labor costs associated with the finishing department using last month's data for his analysis. A financial accountant who processes weekly invoices noticed several were too low compared to inventory moved. She gave the system report to a staff auditor for review. A marketing staff member wants to better understand the company's public perception and is analyzing conversations from a discussion board on the company's website. A financial accountant wants to ensure all new lease agreements have terms that will maintain GAAP compliance. The CFO wants to reduce time spent on routine tasks like making repeated weekly payroll journal entries. The sales manager wants to focus their efforts in the coming year on increasing sales in the Eastern territory and needs to determine what other regions have seen growth. The HR director wants to know if employees are clocking in at the same time consistently and looks at a report auto-generated by the system.

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Term

Answer: a.

g. h.

Statement Term Textual analysis A tax accountant analyzed new IRS procurements to determine availability of new deductions for their clients with children. A financial accountant created a macro to update a new Robotic process dashboard that updates stock prices needed by the finance automation department. An operations manager investigated labor costs associated Process mining with the finishing department using last month's data for his analysis. Continuous A financial accountant who processes weekly invoices auditing noticed several were too low compared to inventory moved. She gave the system report to a staff auditor for review. Textual analysis A marketing staff member wants to better understand the company's public perception and is analyzing conversations from a discussion board on the company's website. Smart contracts A financial accountant wants to ensure all new lease agreements have terms that will maintain GAAP compliance. The CFO wants to reduce time spent on routine tasks like Robotic process making repeated weekly payroll journal entries. automation The sales manager wants to focus their efforts in the coming Data mining, year on increasing sales in the Eastern territory and needs to process mining determine what other regions have seen growth. The HR director wants to know if employees are clocking in Process mining, at the same time consistently and looks at a report data mining auto-generated by the system.

Diff: 2 LO: 10-2, 10-3 Bloom: AP Min.: 5 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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97) Omar is a product manager for an online education platform that grew considerably in the past two years. Management worries their current data storage, which resides on-site, is no longer adequate. Upper management asked Omar to spearhead an effort to evaluate alternatives to their current setup and present a proposal at next month's department head meeting. Management specified they are particularly interested in exploring cloud-based solutions, and Omar should evaluate as many pros and cons as possible for each proposed solution. Management prioritized cost as the most important factor but also emphasized the importance of privacy because they wish to protect their proprietary product. With this in mind, please answer the following questions. Questions A. What cloud-based solutions can Omar consider when making his proposal? Does each option carry the same features? B. What are the advantages of each option listed in part (a)? What are the disadvantages of each option listed in part (a)? What additional considerations might Omar make when making his selection? C. Assume you are Omar and you must recommend the cloud-based solution best meets management's stated needs. What would you recommend, and why? Provide as much detail as possible to support your conclusion.

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Answer: A. Cloud-based solutions are now available in several different configurations, each with its own features. Omar could consider the following types of cloud-based storage: • Private Cloud: Data storage for a single organization or data storage shared by a group of non-competing organizations from different industries • Public Cloud: Data storage shared by many organizations who can easily access and store their own data in the cloud • Hybrid Cloud: Data storage with both private and public cloud virtual server sections All three cloud-based options can achieve management's goal of moving to a data storage solution that does not require the company's continued dependence on its current on-site storage methodology. B. Each of the three options listed will have certain pros and cons and may appear as follows: • Private Cloud: ◦ Pros: ▪ High data interactivity, ▪ High privacy and security, and ▪ Very customizable ◦ Cons: ▪ Can be very expensive, and ▪ May be difficult to manage in-house, often requiring hiring external expert assistance • Public Clouds ◦ Pros: ▪ Appropriate for small businesses, ▪ Fast implementation, and ▪ Relatively low cost ◦ Con: ▪ Not generally customizable • Hybrid Clouds: ◦ Pros and Cons: May have some or all the pros and cons of either of the cloud-based solutions above When making the selection, Omar should consider how quickly management wants to switch to a cloud-based storage system, their overall budget, and whether they wish to hire internal or external experts for data storage support.

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C. Now that the time has arrived to make a recommendation, Omar should prioritize what management stated as its important considerations. A hybrid cloud would be the optimal solution for management in this scenario. It would afford the company to have its most proprietary data stored on a private cloud while storing the rest in a public cloud. This allows the company to achieve its proprietary security goals keeping costs relatively low. Omar should also collect pricing from several vendors able to align with the suggested deployment and outline the most desirable plan possible before making the presentation. Diff: 2 LO: 10-1 Bloom: AP Min.: 10 AACSB: Analytic AICPA: AC: Measurement, Analysis, and Interpretation; IMA: Technology & Analytics: Data Analytics

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98) The Totally Tubular Company specializes sales of fun and niche pool inflatables to local pool supply stores. They made a concerted effort over the past few years to increase sales and widen their customer base by opening an online store. After the launch of the online platform, sales and the number of customers both increased. During this time, they also began selling to larger clients to attract bigger retailers. The accountants aggregated data pertaining to sales and accounts receivable dating back to 2023 when the website launched.

Net Credit Sales Beginning Accounts Receivable Ending Accounts Receivable

2023 $423,900 $40,730 $52,894

2024 $472,700 $52,894 $63,804

2025 $615,622 $63,804 $60,662

The accountants also collected the following information from two of Totally Tubular Company's competitors: Fanciful Floaties: Net Credit Sales Beginning Accounts Receivable Ending Accounts Receivable

2023 $309,400 $10,600 $18,900

2024 $362,800 $18,900 $16,009

2025 $358,901 $16,009 $19,002

2023 $488,703 $62,904 $58,924

2024 $510,734 $58,924 $65,007

2025 $534,607 $65,007 $68,009

Hang Ten Corp.: Net Credit Sales Beginning Accounts Receivable Ending Accounts Receivable

Management worries they are too generous with their credit terms and would like to compare Totally Tubular's results with a couple of competitors. In 2025, company offers credit term 2/10, n/30 to its customers. Follow the instructions below, and answer the questions that follow. Questions A. In Excel, record a macro that calculates Totally Tubular Company's accounts receivable turnover (Net Credit Sales/Average Accounts Receivable) for each of the three years. Then, run the macro with the data from Fanciful Floaties and Hang Ten Corp. B. Use your results from the previous step to create the graph that best displays your comparison of results for all the three companies. C. Based upon your analysis, what insights would you share with Totally Tubular Company's management? Do you agree that the company has been too generous with the credit terms it offers? Are their competitors more (or less) efficient at managing their accounts receivable turnover when compared with Totally Tubular Company? Are there any suggestions you could make so Totally Tubular Company continues to meet its objectives without being overly concerned with its overall turnover time?

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Answer: A. Put the data in Excel worksheets, and use the macros functionality to record routine to calculate Totally Tubular Company's accounts receivable turnover for each of the given years. Then, run the same macro on the data from Fanciful Floaties and the Hang Ten Corp. As a first step, you may need to enable macros on your data file. After enabling macros, go to the worksheet with Totally Tubular Company's data, use the View tab to select the Record Macro option from the Macros drop-down menu. Name your macro AccountsReceivableTurnover. Now, select cell B5, and enter the formula =B2/((B3+B4)/2). Copy and paste the same formula in cells C5 and D5. Go back to the View tab and select Stop Recording from the Macros drop-down menu. Next, go into the worksheets for Fanciful Floaties and Hang Ten Corp., and select cell B5. Use the View tab to View Macros, and run the AccountsReceivableTurnover macro using the drop-down menu commands. Your macro should do turnover calculations for Fanciful Floaties and Hang Ten Corp. for the years 2023, 2024, and 2025. Your results should resemble the following: Totally Tubular:

Fanciful Floaties:

Hang Ten Corp.:

B. A line graph is the best graph to display these findings because it shows changes over time in an 643

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easily interpreted manner. First, compile your findings from the previous steps into a single comparison chart. In Excel, highlight the cells that include the values and organize them in the manner shown here:

Totally Tubular Company Fanciful Floaties Hang Ten Corp.

2023 2024 2025 9.05537 8.101253 9.892212 20.97627 20.78547 20.50219 8.022835 8.242232 8.038236

Next, go to Insert, and select Line Graph. Your graph resembles the following:

C. Based upon this data visualization of the annual Accounts Receivable Turnover ratios for Totally Tubular Company, the ratio is consistently below 10, and the ratios are fairly steady over the time period under investigation. In 2025, the company's AR turnover did increase as compared to the previous year, which may indicate that the credit terms encouraged customers to settle their obligation faster than in 2024. Management should investigate what changes in 2024 caused the decrease in the annual Accounts Receivable Turnover ratio, and see if there were any changes in their policy or their customers who used credit from 2024 to 2025 to explain the uptick. Analyzing these items further may help management continue to meet their objectives and without undue concern with their overall turnover time. They have a slightly better overall turnover ratio than Hang Ten but not nearly as strong as Fanciful Floaties' turnover. Management could investigate further to determine why Fanciful Floaties was able to collect its Accounts Receivable so much faster than Totally Tubular Company was. Diff: 3 LO: 10-1 Bloom: S, E Min.: 15 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics, Visualization 99) Nathan works at the headquarters of a large software company specializing in app creation. 644

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Recently, his company launched a new app for conferencing, meetings, and general interpersonal connections with video capabilities. Now that a few months have passed, management would like to know how the app has been perceived and received by users. They asked for feedback to be collected and analyzed before the next round of updates begins. A survey was sent out to the app's users, and their results have been collated. Nathan needs to head up analysis on the results and help management and the development team better understand how the app has been perceived so far. Nathan opted to perform textual analysis. The survey data includes the review date, and each customer's feedback. Please refer to the data file to answer the following questions. Questions A. What is textual analysis? Is Nathan correct to think this kind of analysis can achieve the desired results? Why or why not? B. Use Excel, and classify the customer's data into 4 categories: i. Very Low Quality ii. Low Quality iii. High Quality iv. Very High Quality Also, create a frequency distribution table using the COUNTIF() function to aggregate the results. C. What percentage of ratings fall into either the High Quality or Very High Quality categories? D. What percentage of ratings fall into either the Low Quality or Very Low Quality categories? E. Do you believe the app has been well received by its users? What recommendations could Nathan make to management and the developers?

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Answer: A. Textual analysis is a data analysis method that uses tools to analyze word choices found in places like blog posts, annual reports, and customer surveys. Nathan is correct to think textual analysis of the customer survey results can provide the best insight into how users are feeling about their overall experience with this new app. Other forms of analysis would not adequately analyze the text and would not produce the desired results. B. Step 1: Sort the customer comments in alphabetical order. Step 2: In a new column "App Quality" manually code each row by typing one of the categories: "Very Low Quality", "Low Quality", "High Quality", and "Very High Quality". Step 3: Create a new table to show the total number of ratings for each category. Step 4: Starting in cell F3, type the following formula =COUNTIF(C2:C30, "Very Low Quality") and hit enter. Step 5: Repeat this process for each of the other categories. Make sure to update the second input for the COUNTIF formula. The frequency distribution table would appear as follows:

Lastly, you can sum the results of Column F to ensure that you have accounted for all responses with the following formula: In Cell F7, enter = SUM(F3:F6) and hit enter.

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C. To determine what percentage of ratings fall into either the High Quality or Very High Quality categories, use the formula =(F5+F6)/F7 = 65.52%. D. To determine what percentage of the ratings fall into either the Low Quality or Very Low Quality categories, use the formula =(F3+F4)/F7 = 34.48%. E. Based on this analysis, most app users rate the app as having a rating of High Quality or above. Nathan's company should spend time investigating why 34% of users do not feel the same. Taking time to review the comments left by customers could provide some insight into what developers could add, remove, or improve during their next update. Nathan should recommend that management keep the app as-is and look for ways it can be improved. He should also advise management that this survey should be given to the same customers again after the next update so they can ask those users to determine if the app improved in quality. Diff: 2 LO: 10-2 Bloom: AP, AN Min.: 15 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

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100) Trailblazers Inc. is an outdoor sporting good company that manufactures three lines of mountain bikes: Trail, Trail Pro, and Trail Pro II. Management is putting together budgets and projections for the following year. The management team has concerns going into the new year about whether their staffing will keep pace with the production demands. Some members of the team floated the idea of removing the least profitable line of bikes, but they would like more data before making any decisions. They asked Miranda, one of the staff accountants, to assist with their decision-making. Please refer to the Trailblazers Inc. datafile for that company's data. Questions A. Create a workflow in Alteryx to automate the process of analyzing each product's contributions to net income in the following format: Revenues – Variable Costs = Contribution Margin − Traceable Fixed Costs = Segment Margin − Common Fixed Costs = Net Income B. How do you interpret the results of this analysis? Taking the data you generated, update your income statement to only include the two lines of bikes with the highest net incomes. Overall, would there be in an increase or decrease in the Net Income with only two bike lines? Please, express your answer in terms of percent change.

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Answer: A. For the ease of convenience, divide the process in parts: Open Alteryx, and go to Favorites tab. Input Dataset: Step 1: Drag the Input Data tool to the workflow window. Step 2: Go to Connect a File or Database box, and import sheet 1 of the Excel workbook by selecting the down arrow on the box. Step 3: Run the Input Data tool by selecting the blue Run button. Product Ascending: Step 1: Drag the Sort tool to the right of the workflow. Step 2: Select Product from the drop-down list, and sort those in ascending order. Step 3: Run the Sort tool by selecting the blue Run button.

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Calculate Totals: Step 1: Drag the Formula tool to the right of the workflow. Step 2: Under the Output Column, click on the arrow on the Select Column, and add a new column with a particular name. Step 3: Enter the appropriate formula in the Expression space, and select the Data Type: Double. Step 4: Repeat this for all the column names. Below is the list of the new column names and the corresponding formulas to use: RevenuesTrail

IF [Product]="Trail" THEN [Total revenues] else 0 ENDIF RevenuesTrailPro IF [Product]="Trail Pro" THEN [Total revenues] ELSE 0 ENDIF RevenuesTrailProII IF [Product]="Trail Pro II" THEN [Total revenues] ELSE 0 ENDIF VCforTrail IF [Product]="Trail" THEN [Total Variable Cost] else 0 ENDIF VCforTrailPro IF [Product]="Trail Pro" THEN [Total Variable Cost] else 0 ENDIF VCforTrailProII IF [Product]="Trail Pro II" THEN [Total Variable Cost] else 0 ENDIF TraceFCforTrail IF [Product]="Trail" THEN [Total Applied Traceable Fixed Cost] else 0 ENDIF TraceFCforTrailPro IF [Product]="Trail Pro" THEN [Total Applied Traceable Fixed Cost] else 0 ENDIF TraceFCforTrailProII IF [Product]="Trail Pro II" THEN [Total Applied Traceable Fixed Cost] else 0 ENDIF CommonFCforTrail IF [Product]="Trail" THEN [Total Applied Common Fixed Cost] else 0 ENDIF CommonFCforTrailPro IF [Product]="Trail Pro" THEN [Total Applied Common Fixed Cost] else 0 ENDIF CommonFCforTrailProII IF [Product]="Trail Pro II" THEN [Total Applied Common Fixed Cost] else 0 ENDIF Step 5: Run the Formula tool by selecting the blue Run button. Sum Data Totals by Product: Step 1: Drag the Summarize tool to the right of the workflow. Step 2: Add all the required fields for the given section, and select the Sum action. Step 3: Output fields name will automatically appear in the columns to the right of Action. Step 4: Run the Summarize tool by selecting the blue Run button.

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Calculate Income Statement Line Item Totals: Step 1: Again, drag the Formula tool to the right of the workflow. Step 2: Under the Output Column, click on the arrow on the Select Column, and add a new column with a particular name. Step 3: Enter the appropriate formula in the Expression space, and select the Data Type: Double. Step 4: Repeat this for all the column names. Below is the list of the new column names and the corresponding formulas: ContribMarginTrail [Sum_RevenuesTrail]-[Sum_VCforTrail] ContribMarginTrailPro [Sum_RevenuesTrailPro]-[Sum_VCforTrailPro] ContribMarginTrailProII [Sum_RevenuesTrailProII]-[Sum_VCforTrailProII] SegmentMarginTrail [ContribMarginTrail]-[Sum_TraceFCforTrail] SegmentMarginTrailPro [ContribMarginTrailPro]-[Sum_TraceFCforTrailPro] SegmentMarginTrailProII [ContribMarginTrailProII]-[Sum_TraceFCforTrailProII] NetIncomeTrail [SegmentMarginTrail]-[Sum_CommonFCforTrail] NetIncomeTrailPro [SegmentMarginTrailPro]-[Sum_CommonFCforTrailPro] NetIncomeTrailProII [SegmentMarginTrailProII]-[Sum_CommonFCforTrailPr oII] TotalVC [Sum_VCforTrail]+[Sum_VCforTrailPro]+[Sum_VCforT railProII] TotalContribMargin [ContribMarginTrail]+[ContribMarginTrailPro]+[Contrib MarginTrailProII] TotalTraceFC [Sum_TraceFCforTrail]+[Sum_TraceFCforTrailPro]+[Su m_TraceFCforTrailProII] TotalSegmentMargin [SegmentMarginTrail]+[SegmentMarginTrailPro]+[Segm entMarginTrailProII] TotalCommonFC [Sum_CommonFCforTrail]+[Sum_CommonFCforTrailPr o]+[Sum_CommonFCforTrailProII] TotalNetIncome [NetIncomeTrail]+[NetIncomeTrailPro]+[NetIncomeTrail ProII] Step 5: Run the Formula tool by selecting the blue Run button. Create the formatted income statement: Step 1: Go to the Transform tab. Step 2: Drag the Arrange tool to the right of the workflow. Step 3: Ensure all the key fields are de-selected. Step 4: Add three income statement columns and seven income statement rows by clicking the drop down list of column and selecting Add from the list. Step 5: Enter Product names in the Column Header field name and their corresponding descriptions. Step 6: Select the fields indicated for a particular product column. Do this for remaining products. Step 7: Re-arrange all the fields in the correct order from top to bottom. Step 8: Run the Arrange tool by selecting the blue Run button.

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Output the Income Statement to Excel filename.xlsx: Step 1: Go to Favorites tab. Step 2: Drag the Output tool to the right of the workflow. Step 3: Go to Write to File or Database box and select the supported file type, Microsoft Excel .xlsx. Step 4: Select the location to save the output file, and name your file. Step 5: Run the Output tool by selecting the blue Run button. The final Alteryx Workflow should resemble the following:

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The Excel output file should resemble the following:

B. Utilize the Excel file you generated to determine the overall totals for all three products by doing the following: Step 1: Format all existing numerical cells to be dollars with no cents. Step 2: Create a Total Column starting in Cell E1 and Label it "All Product Lines". Step 3: In Cell E2, enter the following formula =B2+C2+D2. Step 4: Copy and paste this formula to each of the cells from E3 through E8. Your results should resemble the following:

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Next, determine which product needs to be dropped by using Product Net Income as the determining factor. The Trail bike line has the lowest Net Income, so it should be dropped in this analysis. Step 1: Create a new column called "Trail Pro and Trail Pro II" in cell F1. Step 2: Determine which costs are eliminated after removing the Trail product line from this analysis. Common Fixed Costs will need to be included as they will exist even without that product line being included. Step 3: In Cell F2, enter the following formula =C2+D2. Step 4: Copy and paste the formula created in Cell F2 to cells from F3 through F6. Step 5: In Cell F7, enter the following formula =B7+C7+D7. Step 6: In Cell F8, enter the following formula = F6-F7. Your results should resemble the following:

To calculate the percent change in net income between the scenario with all three products and the scenario with only the two most profitable, do the following: Step 1: In Cell G8, enter the formula = (F8-E8)/E8. Step 2: Record the result: -18.73%. The information analyzed so far paints an interesting picture of the company. If management had not noted there were staffing concerns, an analyst might not consider the eliminating a product as a desirable suggestion. After reviewing the information so far, and taking into consideration what the analysis without the least profitable line, management should see that there would be a decrease in net income of 18.73% if the company choses to eliminate the Trail product line. This decrease is sufficiently large that management should not remove the product because it more than covers its own costs while adding to the company's overall net income in a meaningful and impactful way. Management may consider spending additional funds to boost its staffing efforts so all three products can continue being sold. Diff: 3 LO: 2-2 Bloom: S Min.: 15 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

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101) Trailblazers Inc. is an outdoor sporting good company that manufactures three lines of mountain bikes: Trail, Trail Pro, and Trail Pro II. Management is putting together budgets and projections for the coming year. The management team has concerns going into the new year about whether their staffing will keep pace with the production demand. Some members of the team floated the idea of removing the least profitable line of bikes, but they would like more data before making any decisions. They asked Miranda, one of the staff accountants, to assist with their decision-making data. Please refer to the Trailblazers Inc. data file for that company's data. Questions A. In Excel, create an Income Statement for all three bike lines sold by Trailblazers. Which product has the highest net income? By what percentage is this highest net income product above the lowest net income product? B. Now, consider what the impact of dropping the lowest-profit product line would be. Using your income statement, expand on this, and demonstrate how the overall net income changes if the product line with the lowest net income is dropped from the company's offerings. Express your answer in terms of percentage change. C. What recommendations should Miranda give management? If they had to drop one of the three products, which one should it be, and why?

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Answer: A. For the ease of convenience, divide the process into parts: Open the provided Excel workbook with the company's sales data for each product line per month. Product Ascending: Step 1: Go to the Data tab and select Sort. Step 2: In the pop-up window, verify the default My data has headers is checked. Step 3: Select Product in the first drop-down list to ensure the data is properly sorted. Step 4: Insert two rows between data for the Trail and Trail Pro product lines and two rows between Trail Pro and Trail Pro II product lines to separate the data. Calculate Totals: Step 1: Enter a sum formula in cells D18, I18, J18, K18, and L18 to determine the corresponding column totals for Trail product line for year 2023. Below is the list of the cell names and the corresponding formulas to use: D18 I18 J18 K18 L18

=SUM(D6:D17) =SUM(I6:I17) =SUM(J6:J17) =SUM(K6:K17) =SUM(L6:L17)

Step 2: Repeat the same process for other two product lines as well. The Excel sheet should resemble the following for each product line:

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Create the formatted income statement: Step 1: Beginning with Column N, enter the column titles and row descriptions. Step 2: Rename cell O5 "Trail", P5 "Trail Pro", Q5 "Trail Pro II", and R5 "All Product Lines". Step 3: Enter the cell address and formulas in each cell, as indicated below:

The comparative income statement for 2023 should resemble the following:

The Trail Pro II product line has the highest net income at $8,258,370. To compute how much larger this is than the lowest net income product (i.e., the Trail product line), use Excel. Input the formula =(Q12-O12)/O12. This produces a result of the Trail Pro II product line having 271% higher net income than the Trail product line. B. Next, determine which product line to drop by using Product Net Income as the determining factor. The Trail product line has the lowest Net Income, so it should be dropped. Step 1: Create a new column called "Trail Pro and Trail Pro II" in cell S5. Step 2: Determine what costs are eliminated by removing the Trail product line from this analysis. Common Fixed Costs need to be included since they still exist even without that product line being included. Step 3: In Cell S6, enter the following formula =P6+Q6. Step 4: Copy and paste the formula created in Cell S6 to cells from S7 through S10. Step 5: In Cell S11, enter the formula =O11+P11+Q11. Step 6: In Cell S12, enter the formula = S10- S11.

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Your results should resemble the following:

To calculate the percent change in net income between the scenario with all three product lines and the scenario with only the two most profitable product lines, do the following: Step 1: In Cell S13, enter the formula = (S12-R12)/R12. Step 2: This results in a change of -18.73%. C. Miranda should advise management that the company's performance is stronger when all three product lines are being produced and sold. Removing the Trail product line from the mix shows a reduction of 18.73% in the company's net income. Miranda's main suggestion should be to provide additional funds in the budget for staffing their production team so the company can continue to produce and sell all existing product lines. Diff: 3 LO: 10-2 Bloom: S Min.: 15 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics

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102) Turner Corp. is a regional company that specializes in the sale of lawn care services. Turner's management has asked the lead accountant to assist in their annual analysis of certain metrics. Below is selected information from Turner Corp.'s and two competitors' financial statements for the three most recent fiscal years: Turner Corp.

Inventory, Beginning Inventory, Ending Cost of Goods Sold

2025 2024 2023 $588,734 $548,906 $500,489 $643,903 $588,734 $548,906 $3,080,346 $2,700,430 $2,444,568

Hooch Inc.

Inventory, Beginning Inventory, Ending Cost of Goods Sold

2025 2024 2023 $333,900 $299,560 $286,732 $375,400 $315,600 $299,560 $1,890,432 $1,905,433 $1,920,832

Lovely Lawns

Inventory, Beginning Inventory, Ending Cost of Goods Sold

2025 2024 2023 $402,854 $410,877 $401,888 $410,900 $402,854 $410,877 $2,654,300 $2,638,912 $2,002,300

Refer to the provided information, and answer the following questions. Questions A. In Excel, record a macro routine to calculate Turner's inventory turnover (Cost of Goods Sold)/(Average Inventory) for the given years. Use this macro, and apply it to the data from Hooch and Lovely Lawns. B. What is the amount of change between 2025 and 2023 for each company? Please express your answers in terms of percent change. C. Use your output to create a column chart that displays your findings, and provide a comparison between all three companies. D. In 2025, the lawn care service industry typically has an inventory turnover of 4.8. How does Turner Corp. perform compare to its competitors, Hooch and Lovely Lawns, in terms of their relative inventory turnovers? What insights could you offer management based on your analysis?

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Answer: A. Input the given data into Excel worksheets, and use the macro functionality to record a routine to determine Turner's inventory turnover for the given years. Then, run the macro for Hooch's and Lovely Lawns' data. As a first step, you may need to enable macros on your data file. After enabling macros, go to the Turner worksheet and select the Record Macro option under Macros on the View tab. Name your macro "InventoryTurnover." Now, select cell B5 and enter the formula = B4/((B2+B3)/2). Copy and paste this formula into cells C5 and D5. Then, select Stop Recording from the Macros pull-down menu on the View tab. Next, go to Hooch's and Lovely Lawns' worksheets, and select cell B5. Go to View > Macros > InventoryTurnover > Run. Your macro should perform the turnover calculations for Hooch and Lovely Lawns for the years 2023, 2024, and 2025. Your results should resemble the following: Turner:

Hooch:

Lovely Lawns:

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B. To calculate the percent change, use the following formula on your data: (2025 Inventory Turnover - 2023 Inventory Turnover)/(2023 Inventory Turnover). For Turner, this is (4.99797751 - 4.65900447)/4.65900447 = 7.28% increase in inventory turnover. For Hooch, this is (5.3304159 - 6.55247556)/6.55247556 = 18.65% decrease in inventory turnover. And, for Lovely Lawns, this is (6.52359313 - 4.92713146)/4.92713146 = 32.4% increase in inventory turnover. C. Using Excel, create a column chart to display your findings for each year. First, compile your findings from the previous steps into a comparison chart. In Excel, highlight the cells that include:

Turner Corp. Hooch Inc. Lovely Lawns

2025 4.99797751 5.3304159 6.52359313

2024 4.74742449 6.1949184 6.48595666

2023 4.65900447 6.55247556 4.92713146

Next, go to Insert, and select Column Chart. Your graph resembles the following:

D. Compared to the industry average of 4.8, Turner Corp. has a stronger inventory turnover at 5.0 in 2025. Turner's inventory turnover increased since 2023, a good trend to have. Based on this, management should continue to investigate and analyze any changes made in the practices of purchasing inventory or the flow of cost of goods sold. A follow-up question for management would be to inquire whether they experienced any changes in their cost flow assumptions during any of these years that would result in a higher Cost of Goods Sold in 2025. According to the calculations, both Hooch and Lovely Lawns outperformed Turner in terms of inventory turnover. Diff: 3 LO: 10-2, 10-3 Bloom: S, E Min.: 15 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics, Visualization 103) Sophia is a financial accountant for a regional pet food factory, and she is in the process of analyzing company's financial data for three of its divisions: Dog Food, Cat Food, and Bird Seed. 661

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Each department has its own books it consolidates at the end of every year. Each of the department managers asked Sophia to determine several key metrics including the following: Profit Margin (net income/sales), Working Capital (current assets - current liabilities), Current Ratio (current assets/current liabilities), and Return on Assets (net income/average total assets). Before doing these calculations, Sophia collected the following selected data from each set of financial statements:

Current Assets Avg. Total Assets Current Liabilities

Dog Food Cat Food Bird Seed $678,902 $503,499 $544,502 $1,230,800 $1,000,420 $987,430 $407,333 $420,645 $609,340

Sales Net Income

$2,354,000 $1,997,840 $1,020,800 $993,457 $562,001 $203,675

Sophia would like to start her analysis and give the department managers a presentation. Use the information above to assist Sophia. Questions A. In Excel, build a macro to determine the desired financial metrics for the Dog Food division. Then, run your macro on the data for the remaining divisions. Share these results, and discuss your findings. B. Create a column chart that displays the percentage of profits earned by these divisions in relation to their overall resources.

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Answer: A. Input the given data into Excel worksheets, and use the macro functionality to record a macro routine for the Dog Food division that determines profit margin, working capital, current ratio, and return on assets. Name the cells from A9 to A12 profit margin, working capital, current ratio, and return on assets, respectively. As a first step to create the macro, you may need to enable macros on your data file. After enabling macros, go to the Dog Food worksheet and select Record Macro from the drop-down menus under Macros on the View tab. Name your macro "FinancialMatrics." Next, select cell B9, and enter the formula = B7/B6. Next, select cell B10 and enter the formula = B2 — B4. Then, select cell B11, and enter the formula = B2/B4. Next, select cell B12, and enter the formula = B7/B3. Finally, select Stop Recording from the Macros drop-down menu on the View tab. Next, go into the Cat Food and Bird Seed worksheets, and select cell B9. Go to View > Macros > FinancialMatrics > Run. Your macro should perform the calculations for the Cat Food and Bird Seed departments. The result should resemble the following:

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Profit margin shows how much of sales income remains as net income after expenses are subtracted. The goal is to achieve a number as close to 1.0 as possible, but a realistic goal will vary from company to company. The Dog Food division has the highest profit margin, the Bird Seed division has the lowest profit margin, and the Cat Food division falls between those two. Management may want to determine why Bird Seed's ratio is so much lower than Dog Food's and implement changes to increase this number. Working capital indicates how much money or liquidity is available for a company to meet its short-term obligations. Dog Food has the highest working capital, Bird Seed has the lowest working capital, and Cat Food falls between those two. Bird Seed is the most concerning because it is negative, meaning it does not have enough in current assets to settle its current liabilities. The current ratio displays how many times over a year company's current assets could be used to settle current liabilities. Dog Food has the highest current ratio, Bird Seed has the lowest current ratio, and Cat Food falls between those two. Bird Seed is the most concerning since it is less than 1, meaning it does not have enough in current assets to settle its current liabilities. Return on Assets relays how much net income a company can generate from its assets. Dog Food has the highest Return on Assets, Bird Seed has the lowest Return on Assets, and Cat Food falls between those two. Bird Seed is the most concerning amongst the three divisions. B. Using Excel and your previous output, create a column chart to display your findings for each division's Return on Assets. First, compile your findings from the previous steps into a comparison chart. In Excel, highlight the cells that include:

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Next, go to Insert, and select Column Chart. Your graph resembles the following:

Diff: 3 LO: 10-2, 10-3 Bloom: S Min.: 10 AACSB: Data Analytics AICPA: AC: Technology and Tools; IMA: Technology & Analytics: Data Analytics, Visualization

Browsegrades.net

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