CH 7

Question 1

anomaly

Answer 1

something that departs, or deviates from the expected, or the norm

Question 2

outlier

Answer 2

a data point, that lies outside its expected distribution

Question 3

testing for segregation of duties

Answer 3

An internal control procedure that requires more than one person to complete accounting tasks to help prevent fraud and/or errors from
occurring
ex: custody and authorization of assets/recordkeeping

Question 4

testing for unusual activity

Answer 4

Was there abnormal weekend, holiday or end of QTR activity? Why did it occur?

Question 5

testing for duplicate transaction

Answer 5

transactions that get recorded twice (same day, amount,
vendor)

Question 6

fuzzy matching

Answer 6

A technique used to find potential equivalents when there is less than an exact fit

Question 7

sequence check

Answer 7

An analysis used to see if the key number field in the record is in the
correct ascending or descending order

Question 8

outstanding check

Answer 8

checks written by the company but not yet processed by the bank

Question 9

bank reconciliation

Answer 9

technique for identifying anomalies in the cash accounts
Compare the bank’s records with our general ledger record

Question 10

outstanding deposit

Answer 10

deposits recorded by company but not yet processed by the bank

Question 11

NSF check

Answer 11

checked received and recorded by the company but the bank identified insufficient funds by the check writer

Question 12

EFT wire transfer

Answer 12

transfers received and recorded by bank but not yet by the company

Question 13

Notes and interest

Answer 13

payments received and recorded by bank but not yet by the company

Question 14

Bank service fees

Answer 14

recorded by bank but not yet by the company

Question 15

errors

Answer 15

a transaction with no explanation from the aforementioned

Question 16

variance analysis

Answer 16

An analysis used to identify and explain differences between a budgeted (standard) amount and actual performance

Question 17

benford’s law

Answer 17

The principle that in any large, randomly produced set of natural numbers, there is an expected distribution of leading digit

Question 18

2 sample t-test

Answer 18

used to determine if the means from 2 different populations are the same or statistically different

Question 19

when is benford’s law used?

Answer 19

numbers that result from mathematical combination of numbers (AR)
transaction level data
large datasets

Question 20

what visualizations are used for diagnostic analysis?

Answer 20

histograms
box plots

Question 21

what analyses are used for diagnostic analytics

Answer 21

testing for segregation of duties
testing for duplicate transaction
testing for unusual activity
sequence check
fuzzy matching
drill down analysis
bank reconciliation
variance analysis