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Question 1

IMPACT Model

Answer 1

Steps in using data analytics in an audit

I = Identify the questions
M = Master the data
P = Perform the Test Plan
A = Address and refine results
C = Communicate Insights
T = Track outcomes

Question 2

Types of Data

Answer 2

• Qualitative Data
• Nominal Data
• Ordinal Data
• Proportion
• Quantitative Data
• Ratio Data
• Interval Data
• Discrete Data
• Continuous Data
• Distributions

Question 3

Qualitative Data

Answer 3

Categorical Data (e.g. Count, group, rank)

Question 4

Nominal Data

Answer 4

Simple Categories (e.g. Hair color)

Question 5

Ordinal Data

Answer 5

Ranked Categories (e.g. Gold, silver, bronze)

Question 6

Proportion

Answer 6

Shows the makeup of each category (e.g. 55% cats, 45% dogs)

Question 7

Quantitative Data

Answer 7

Numerical Data (e.g. Age, height, dollar amount)

Question 8

Ratio Data

Answer 8

Defines 0 as ‘absence of’ something (e.g. cash)

Question 9

Interval Data

Answer 9

0 is just another number (e.g. temperature)

Question 10

Discrete Data

Answer 10

Whole numbers only (e.g. points in a basketball game)

Question 11

Continuous Data

Answer 11

Numbers with decimals (e.g. Height)

Question 12

Distributions

Answer 12

Describe the mean, median, and standard deviation of the data

Question 13

Analytics Testing

Answer 13

• Descriptive
• Diagnostic
• Predictive
• Prescriptive
• Example Audit Procedure

Question 14

Descriptive Analytics

Answer 14

• What Happened? What is Happening?
  1) Summary Statistics
  2) Cross Tabulations of Performance (Pivot Tables)
  3) KPI Tracking
  4) Costing and/or Process Costing
  5) Clustering Suppliers, customers, processes, locations

Question 15

Diagnostic Analytics

Answer 15

• Why did it happen? Can we explain why it happened?
  1) Comparison of KPIs to expectations
  2) Price, Rate, Usage, quantity, and overhead variance analysis
  3) Conditional Formating
  4) Regression Analysis estimating cost behavior
  5) Correlations

Question 16

Predictive Analytics

Answer 16

• Will it happen in the future? Is it foreseeable? What is the Probability something will happen?
  1) Sales Forecasting
  a) Time Series
  b) Competitor and Industry
  performance
  c) Macroeconomic Forecasts
  d) Regression
  e) Classification of Indirect Costs
  i) What is the Appropriate cost-
  driver to allocated overhead

Question 17

Prescriptive Analytics

Answer 17

• What should we do based on what we expect to happen? How do we optimize our performance based on potential constraints?
  1) What-if Analysis
  2) Goal Seek Analysis
  3) Cash Flow (Capital Budgeting) Analysis
  4) Sensitivity Analysis

Question 18

Example Audit Procedure

Answer 18

Analysis of new accounts and sales employee bonuses

Question 19

Predictive and Prescriptive Analytics

Answer 19

Both provide probabilistic models

Question 20

The Big V’s of Big Data

Answer 20

• Volume
• Velocity
• Variety

Question 21

Volume

Answer 21

Refers to size

Question 22

Velocity

Answer 22

Refers to frequency

Question 23

Variety

Answer 23

Refers to different types

Question 24

The Balanced Scorecard

Answer 24

• Identifies the most important metrics to measure and target goals for comparison
• Consists of:
  1) Financial
  2) Customer
  3) Internal Process
  4) Organizational Capacity

Question 25

Financial (Component of Balanced scorecard)

Answer 25

How the company generates value

Question 26

Customer (Component of Balanced scorecard)

Answer 26

How the company generates value

Question 27

Internal Process (Component of Balanced scorecard)

Answer 27

How efficiently the company is operating

Question 28

Organizational Capacity (Component of Balanced scorecard)

Answer 28

How the company is training employees

Question 29

Profiling Based on Gathering summary statistics (5 steps)

Answer 29

1) Identify the objects or activities you want to profile
2) Determine the types of profiling you want to perform
3) Set boundaries of thresholds for the activity
4) Interpret the results and monitor the activity or generate a list of exceptions
5) Follow up on Exceptions

Question 30

What would the Audit Process be to catch a fictitious vendor made by an employee?

Answer 30

Fuzzy Match, A technique that helps identify 2 elements of text, strings, or entries that are approximately similar but are not exactly the same.

Question 31

How to improve the Profitability of a company?

Answer 31

• Cost cutting,
• Streamlining certain processes
• Create dashboards with KPIs and find room of improvement based on each department

Question 32

What is the Difference between declarative and exploratory data analytics

Answer 32

Declarative Visualizations
1) Used to present finding
- Financial Results
Exploratory
1) Used to gain insights while you are interacting with data
- Identifying good customers

Question 33

Explain the Test / Analysis you would use to find and determine a new store location based on sales tax

Answer 33

Create a map dashboard on Tableau or Power BI and sort each state by sales tax to determine the best state to put the new store.