AIS Chapter 9: Data Analytics in
Accounting
Big Data: - ✔✔ correct answer datasets that are too large and complex for businesses' existing
systems to handle utilizing their traditional capabilities to capture, store, manage, and analyze these
datasets
What are the three defining features of big data? - ✔✔ correct answer 1. Volume
2. Velocity
3. Variety
Data analytics: - ✔✔ correct answer the science of examining raw data, removing excess noise from
the dataset and organizing the data with the purpose of drawing conclusions for decision making
What differentiates big data from other types of data? - ✔✔ correct answer whether or not the data
pushes the limit of capabilities of information systems that work with these data
What limiting factors do business systems face when dealing with big data? - ✔✔ correct answer
Storage and processing
Extract, Transform, and Load (ETL) - ✔✔ correct answer the process of cleaning and scrubbing the
data before analysis can take place
How can data analytics be costly? - ✔✔ correct answer can be very time consuming to prepare and
analyze data to get it ready for use and organizations will want to make sure that the benefits exceed
to cost
How does data analytics impact accounting? - ✔✔ correct answer - can help accountants identify
potential risks and opportunities with financial statements
- allow auditors to help managers make better decisions and yield important findings
- increase in automation and identify risks sooner
- allow time for deeper broader insights
, AIS Chapter 9: Data Analytics in
Accounting
Audit Data Standards (ADS): - ✔✔ correct answer a standard format for data files and fields typically
needed to support an external audit in a given financial business process area that was developed by
the AICPA
objective is to have a standard structure of data that can be used consistently across financial audits
of most organizations
What are the potential benefits of ADS? - ✔✔ correct answer - Reduces the time and effort involved
in accessing data
- work well with standard audit and risk tests
- allow software vendors to produce data extraction programs to prevent fraud and help with risk
management
- facilitate testing of full population of transactions and not just a small sample
- connects well with XBRL GL standards
How does ADS reduce the time and effort involved in accessing data? - ✔✔ correct answer - provides
precise request of what data are required and the format in which the data should be provided
- reduce risk that incorrect/incomplete data will be provided
- reduce need for scrubbing of data
- potentially have FR systems output this information directly
Data Accountability and Trust Act of 2009 (DATA) - ✔✔ correct answer created a national standard
for privacy and data protection
- notify people when their information has been exposed to unauthorized parties
- requires organizations to implement and maintain formal security programs to prevent
unauthorized access to personal info
What are the penalties for failure to comply with DATA? - ✔✔ correct answer -Failure to comply with
security program requirements:
(Based on the # of days the organization is noncompliant with max of $11,000 a day)
- Failure to follow the breach notification rules:
calculated by multiplying the number of violations (individuals not notified) by $11,000
Accounting
Big Data: - ✔✔ correct answer datasets that are too large and complex for businesses' existing
systems to handle utilizing their traditional capabilities to capture, store, manage, and analyze these
datasets
What are the three defining features of big data? - ✔✔ correct answer 1. Volume
2. Velocity
3. Variety
Data analytics: - ✔✔ correct answer the science of examining raw data, removing excess noise from
the dataset and organizing the data with the purpose of drawing conclusions for decision making
What differentiates big data from other types of data? - ✔✔ correct answer whether or not the data
pushes the limit of capabilities of information systems that work with these data
What limiting factors do business systems face when dealing with big data? - ✔✔ correct answer
Storage and processing
Extract, Transform, and Load (ETL) - ✔✔ correct answer the process of cleaning and scrubbing the
data before analysis can take place
How can data analytics be costly? - ✔✔ correct answer can be very time consuming to prepare and
analyze data to get it ready for use and organizations will want to make sure that the benefits exceed
to cost
How does data analytics impact accounting? - ✔✔ correct answer - can help accountants identify
potential risks and opportunities with financial statements
- allow auditors to help managers make better decisions and yield important findings
- increase in automation and identify risks sooner
- allow time for deeper broader insights
, AIS Chapter 9: Data Analytics in
Accounting
Audit Data Standards (ADS): - ✔✔ correct answer a standard format for data files and fields typically
needed to support an external audit in a given financial business process area that was developed by
the AICPA
objective is to have a standard structure of data that can be used consistently across financial audits
of most organizations
What are the potential benefits of ADS? - ✔✔ correct answer - Reduces the time and effort involved
in accessing data
- work well with standard audit and risk tests
- allow software vendors to produce data extraction programs to prevent fraud and help with risk
management
- facilitate testing of full population of transactions and not just a small sample
- connects well with XBRL GL standards
How does ADS reduce the time and effort involved in accessing data? - ✔✔ correct answer - provides
precise request of what data are required and the format in which the data should be provided
- reduce risk that incorrect/incomplete data will be provided
- reduce need for scrubbing of data
- potentially have FR systems output this information directly
Data Accountability and Trust Act of 2009 (DATA) - ✔✔ correct answer created a national standard
for privacy and data protection
- notify people when their information has been exposed to unauthorized parties
- requires organizations to implement and maintain formal security programs to prevent
unauthorized access to personal info
What are the penalties for failure to comply with DATA? - ✔✔ correct answer -Failure to comply with
security program requirements:
(Based on the # of days the organization is noncompliant with max of $11,000 a day)
- Failure to follow the breach notification rules:
calculated by multiplying the number of violations (individuals not notified) by $11,000
