Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
SOLUTION MANUAL FOR
g g
DatagAnalyticsgforgAccounting,g3rdgEditiongRichardsongChapte
rg1-9
SolutionsgManualg–gChapterg1
SolutionsgtogMultiplegChoicegQuestions
1. (LOg1-1)gBiggDatagisgoftengdescribedgbygthegfourgVs,gor
a. volume,gvelocity,gveracity,gandgvariability.
b. volume,gvelocity,gveracity,gandgvariety.
c. volume,gvolatility,gveracity,gandgvariability.
d. variability,gvelocity,gveracity,gandgvariety.
Answer:gb
2. LOg1-
4)gWhichgdatagapproachgattemptsgtogassigngeachgunitgingagpopulationgintogagsmallgsetgofgclasse
sg(orggroups)gwheregthegunitgbestgfits?
a. Regression
b. Similaritygmatching
c. Co-occurrenceggrouping
d. Classification
Answer:gd
3. (LOg1-
4)gWhichgdatagapproachgattemptsgtogidentifygsimilargindividualsgbasedgongdatagknowngaboutgt
hem?
a. Classification
b. Regression
c. Similaritygmatching
d. Datagreduction
Answer:gc
4. (LOg1-4)gWhichgdatagapproachgattemptsgtogpredictgconnectionsgbetweengtwogdatagitems?
a. Profiling
b. Classification
c. Linkgprediction
d. Regression
1
, Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
Answer:gc
5. (LOg1-
6)gWhichgofgthesegtermsgisgdefinedgasgbeinggagcentralgrepositorygofgdescriptionsgforgallgofgthegdat
agattributesgofgthegdataset?
a. BiggData
b. Datagwarehouse
c. Datagdictionary
d. DatagAnalytics
Answer:gc
6. (LOg1-5)gWhichgskillsgweregnotgemphasizedgthatganalytic-mindedgaccountantsgshouldghave?
a. Developedganganalyticsgmindset
b. Datagscrubbinggandgdatagpreparation
c. Classificationgofgtestgapproaches
d. Statisticalgdataganalysisgcompetency
Answer:gc
7. (LOg1-5)gIngwhichgareasgweregskillsgnotgemphasizedgforganalytic-mindedgaccountants?
a. Datagquality
b. Descriptivegdataganalysis
c. Datagvisualizationgandgdatagreporting
d. Datagandgsystemsganalysisgandgdesign
Answer:gd
8. (LOg1-4)gThegIMPACTgcyclegincludesgallgexceptgthegfollowinggsteps:
a. performgtestgplan.
b. visualizegthegdata.
c. mastergthegdata.
d. trackgoutcomes.
Answer:gb
9. (LOg1-4)gThegIMPACTgcyclegspecificallygincludesgallgexceptgthegfollowinggsteps:
a. datagpreparation.
b. communicateginsights.
c. addressgandgrefinegresults.
d. performgtestgplan.
2
, Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
Answer:ga
10. LOg1-
1)gBygthegyearg2024,gthegvolumegofgdatagcreated,gcaptured,gcopied,gandgconsumedgworldw
idegwillgbeg149g .
a. zettabytes
b. petabytes
c. exabytes
d. yottabytes
Answer:ga
SolutionsgtogDiscussiongandgAnalysisgQuestions
1. Thegaccountinggfunctiongisgonegofgbeingganginformationgprovider.g Togthegextentgthatgdatagisga
vailablegtogaddressgaccountinggquestions,gbegtheygtax,gmanagerial,gauditgorgfinancialgquestions
.gWithgsuchgrichgavailablegdata,gandgsoftwaregtoolsgtogpreparegandganalyzegthegdata,gdataganal
yticsgwillgcontinuegtogbegangimportantgtoolgforgaccountantsgtoguse.
2. Dataganalyticsgisgdefinedgasgthegprocessgofgevaluatinggdatagwithgthegpurposegofgdrawinggco
nclusionsgtogaddressgbusinessgquestions.gIndeed,geffectivegDatagAnalyticsgprovidesgagwaygto
gsearchgthroughglargegstructuredgandgunstructuredgdatagtogidentifygunknowngpatternsgorgre
lationships.
Aguniversitygmightglearngfromgtheganalyzinggthegdemographicsgofgitsgcurrentgsetgofgstudentsgin
gordergtogattractgitsgfuturegstudentgrecruits.gDidgtheygcomegfromgcitiesgorghighgschoolsgthatgwe
regclosegby?gWeregtheirgparentsgalumnigofgtheguniversity?gDidgtheygscoreghighgongcertaingpart
sgofgthegACT?gWeregthosegofferedgagscholarshipgmoreglikelygtogattend,getc.?gWasgsocialgmedia
geffectivegingattractinggnew,gpotentiallygstrongergstudents?gByganalyzinggthisgtypegofgdata,gpre
viouslygunknowngpatternsgwillgemergegthatgwillgmakegrecruitinggstudentsgmoregeffective.
3. Theregaregmanygpotentialganswers.g Forgexample,gMonsantogmaygusegmathematicalgandgstati
sticalgmodelsgtogplotgoutgthegbestgtimesgtogplantgbothgmalegandgfemalegplantsgandgwheregtog
plantgthemgtogmaximizegyield.g(https://www.cio.com/article/3221621/analytics/6-data-
ganalytics-success-stories-an-inside-look.html#tk.cio_rs)
4. Theregaregmanygpotentialganswers.gDataganalyticsggivesgbothginternalgandgexternalgauditorsga
dditionalgtoolsgtogexaminegeverygaccountinggtransactiongandgassessgforgcompliancegwithgGAAP
.gThegauditgprocessgisgchanginggfromgagtraditionalgprocessgtowardgagmoregautomatedgone,gwh
ichgwillgallowgauditgprofessionalsgtogfocusgmoregongtheglogicgandgrationalegbehindgdatagquerie
sgandglessgongtheggatheringgofgthegactualgdata.gNoglongergwillgtheygbegsimplygcheckinggforgerr
ors,gmaterialgmisstatements,gfraud,gandgriskgingfinancialgstatementsgorgmerelygbegreportinggth
eirgfindingsgatgthegendgofgthegengagement.gInstead,gauditgprofessionalsgwillgnowgbegcollecting
gand
3
, Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
analyzinggthegcompany’sgdatagsimilargtogthegwaygagbusinessganalystgwouldghelpgmanagementg
makegbettergbusinessgdecisions.g Ingthisgway,gdataganalyticsgoffersgvaluegtogthegauditgfunction.
5. Theregaregmanygpotentialganswers.gForgexample,gdataganalyticsgassociatedgwithgfinancialgre
portinggmayghelpgaccountantsgdeterminegifganygofgtheirginventorygobsolete?gItgmaygalsoghelp
gthegcompanygbenchmarkgongthegfinancialgstatementsgandgfinancialgreportinggofgothergsimil
argcompaniesgandgunderstandgtheirgaccountinggpracticesgtoghelpginfergtheirgown.
6. Managementgaccountantsgaddressgtheginformationgneedsgofgmanagement.g Theygwillgoftengs
eegwhatgquestionsgmanagementghas,gfindgapplicablegdatagtogaddressgthosegquestions,gcondu
ctganalysisgofgthegdata,gandgreportgthegresultsgtogmanagementgtoghelpgthemgmakegdata-
drivengdecisions.g ThisgisgconsistentgwithgthegdataganalyticsgprocessgandgthegIMPACTgmodel.
7. ThegIMPACTgcyclegsuggestsgangordergofg1)gIdentifyinggthegQuestions;g2)gMasteringgthegData;g3
)gPerforminggthegtestgplan;g4)gAddressinggandgrefininggresults;g5)gCommunicatingginsightsgandg
6)gTrackinggoutcomes.gThegcyclegstartsgwithgagquestiongandgthengidentifyinggdatagandgtestgpla
ngthatgmightgaddressgthatgquestion.gThegresultsgofgthegdataganalysisgaregcommunicatedgandgtr
ackedgwhichgmaygleadgtogadditional,gpossiblygmoregrefinedgquestionsgthatgthengrestartgthegcy
cle.
8. Dataganalysisgisgmostgeffectivegwhengagquestiongisgidentifiedgthatgneedsgtogbegaddressed.gT
hatgwillgfocusgtheganalysisgongwhichgdatagandgwhichgtestgmethodgmightgbegmostgeffectivegi
ngaddressinggorgansweringgthegquestion.
9. Masteringgthegdatagrequiresgonegtogknowgwhatgdatagisgavailablegandgwhethergitgmightgbegable
gtoghelpgaddressgthegbusinessgproblem.gWegneedgtogknowgeverythinggaboutgthegdata,gincludin
gghowgtogaccessgit,gitsgavailability,ghowgreliablegitgisg(ifgtheregaregerrors),gandgwhatgtimegperiod
sgitgcoversgtogmakegsuregitgcoincidesgwithgthegtiminggofgourgbusinessgproblem,getc.
10. Facebookgusesglinkgpredictiongtogpredictgagrelationshipgbetweengtwogpeoplegwhengitgsuggestsg
peoplegthatgoneglikelygknowsgduegtogsimilargothergfriends,gextendedgfamily,ghighgschools,gcolle
gegorgworkglocations,getc.
11. Whilegsamplinggisguseful,gitgisgstillgjustgthat,gsampling.gByglookinggatgallgofgthegtransactionsgandg
testinggthemgingagwaygthatgwillghighlightgthegonesgthatgaregthegbiggestgdollargitems,gorgaregmo
stgunusual,gthatgwillgallowgauditorsgtogfocusgongspecificgitemsgthatgmightgbegofgmaterialgsignific
ance.
12. Theregaregseveralgcorrectganswers.gOnegdatagapproachgmightgbegregressionganalysisgwhere,ggiv
engagbalancegofgtotalgaccountsgreceivablegheldgbygagfirm,ghowglonggitghasgbeengoutstanding,gifg
theyghavegpaidgdebtsgingthegpastgallgwillghelpgpredictgthegappropriateglevelgofgallowancegforgdo
ubtfulgaccountsgforgbadgdebts.
13. ThegDebt-to-
IncomegratiogmightgsuggestgtogLendingClubgthatgthegpersongaskinggforgthegloangwasgsimplygas
kinggforgtoogbiggofgagloangandgtheygwouldghaveglittlegabilitygtogrepaygit.gTheglowergthegcreditgs
core,gtheglessglikelygthegpotentialgborrowergwouldgbegablegtogrepaygthegloan.
14. TheregaregmanygothergpotentialgpredictorsgofgwhethergthegLendingClubgwouldgpaygagloan.gHer
egaregagfewgpossibilities:gWhatgothergdebtgdogtheyghave?gHowgmuchgisgtheirgdisposablegincome
4
gDatagAnalyticsgforgAccounting,g3e
SOLUTION MANUAL FOR
g g
DatagAnalyticsgforgAccounting,g3rdgEditiongRichardsongChapte
rg1-9
SolutionsgManualg–gChapterg1
SolutionsgtogMultiplegChoicegQuestions
1. (LOg1-1)gBiggDatagisgoftengdescribedgbygthegfourgVs,gor
a. volume,gvelocity,gveracity,gandgvariability.
b. volume,gvelocity,gveracity,gandgvariety.
c. volume,gvolatility,gveracity,gandgvariability.
d. variability,gvelocity,gveracity,gandgvariety.
Answer:gb
2. LOg1-
4)gWhichgdatagapproachgattemptsgtogassigngeachgunitgingagpopulationgintogagsmallgsetgofgclasse
sg(orggroups)gwheregthegunitgbestgfits?
a. Regression
b. Similaritygmatching
c. Co-occurrenceggrouping
d. Classification
Answer:gd
3. (LOg1-
4)gWhichgdatagapproachgattemptsgtogidentifygsimilargindividualsgbasedgongdatagknowngaboutgt
hem?
a. Classification
b. Regression
c. Similaritygmatching
d. Datagreduction
Answer:gc
4. (LOg1-4)gWhichgdatagapproachgattemptsgtogpredictgconnectionsgbetweengtwogdatagitems?
a. Profiling
b. Classification
c. Linkgprediction
d. Regression
1
, Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
Answer:gc
5. (LOg1-
6)gWhichgofgthesegtermsgisgdefinedgasgbeinggagcentralgrepositorygofgdescriptionsgforgallgofgthegdat
agattributesgofgthegdataset?
a. BiggData
b. Datagwarehouse
c. Datagdictionary
d. DatagAnalytics
Answer:gc
6. (LOg1-5)gWhichgskillsgweregnotgemphasizedgthatganalytic-mindedgaccountantsgshouldghave?
a. Developedganganalyticsgmindset
b. Datagscrubbinggandgdatagpreparation
c. Classificationgofgtestgapproaches
d. Statisticalgdataganalysisgcompetency
Answer:gc
7. (LOg1-5)gIngwhichgareasgweregskillsgnotgemphasizedgforganalytic-mindedgaccountants?
a. Datagquality
b. Descriptivegdataganalysis
c. Datagvisualizationgandgdatagreporting
d. Datagandgsystemsganalysisgandgdesign
Answer:gd
8. (LOg1-4)gThegIMPACTgcyclegincludesgallgexceptgthegfollowinggsteps:
a. performgtestgplan.
b. visualizegthegdata.
c. mastergthegdata.
d. trackgoutcomes.
Answer:gb
9. (LOg1-4)gThegIMPACTgcyclegspecificallygincludesgallgexceptgthegfollowinggsteps:
a. datagpreparation.
b. communicateginsights.
c. addressgandgrefinegresults.
d. performgtestgplan.
2
, Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
Answer:ga
10. LOg1-
1)gBygthegyearg2024,gthegvolumegofgdatagcreated,gcaptured,gcopied,gandgconsumedgworldw
idegwillgbeg149g .
a. zettabytes
b. petabytes
c. exabytes
d. yottabytes
Answer:ga
SolutionsgtogDiscussiongandgAnalysisgQuestions
1. Thegaccountinggfunctiongisgonegofgbeingganginformationgprovider.g Togthegextentgthatgdatagisga
vailablegtogaddressgaccountinggquestions,gbegtheygtax,gmanagerial,gauditgorgfinancialgquestions
.gWithgsuchgrichgavailablegdata,gandgsoftwaregtoolsgtogpreparegandganalyzegthegdata,gdataganal
yticsgwillgcontinuegtogbegangimportantgtoolgforgaccountantsgtoguse.
2. Dataganalyticsgisgdefinedgasgthegprocessgofgevaluatinggdatagwithgthegpurposegofgdrawinggco
nclusionsgtogaddressgbusinessgquestions.gIndeed,geffectivegDatagAnalyticsgprovidesgagwaygto
gsearchgthroughglargegstructuredgandgunstructuredgdatagtogidentifygunknowngpatternsgorgre
lationships.
Aguniversitygmightglearngfromgtheganalyzinggthegdemographicsgofgitsgcurrentgsetgofgstudentsgin
gordergtogattractgitsgfuturegstudentgrecruits.gDidgtheygcomegfromgcitiesgorghighgschoolsgthatgwe
regclosegby?gWeregtheirgparentsgalumnigofgtheguniversity?gDidgtheygscoreghighgongcertaingpart
sgofgthegACT?gWeregthosegofferedgagscholarshipgmoreglikelygtogattend,getc.?gWasgsocialgmedia
geffectivegingattractinggnew,gpotentiallygstrongergstudents?gByganalyzinggthisgtypegofgdata,gpre
viouslygunknowngpatternsgwillgemergegthatgwillgmakegrecruitinggstudentsgmoregeffective.
3. Theregaregmanygpotentialganswers.g Forgexample,gMonsantogmaygusegmathematicalgandgstati
sticalgmodelsgtogplotgoutgthegbestgtimesgtogplantgbothgmalegandgfemalegplantsgandgwheregtog
plantgthemgtogmaximizegyield.g(https://www.cio.com/article/3221621/analytics/6-data-
ganalytics-success-stories-an-inside-look.html#tk.cio_rs)
4. Theregaregmanygpotentialganswers.gDataganalyticsggivesgbothginternalgandgexternalgauditorsga
dditionalgtoolsgtogexaminegeverygaccountinggtransactiongandgassessgforgcompliancegwithgGAAP
.gThegauditgprocessgisgchanginggfromgagtraditionalgprocessgtowardgagmoregautomatedgone,gwh
ichgwillgallowgauditgprofessionalsgtogfocusgmoregongtheglogicgandgrationalegbehindgdatagquerie
sgandglessgongtheggatheringgofgthegactualgdata.gNoglongergwillgtheygbegsimplygcheckinggforgerr
ors,gmaterialgmisstatements,gfraud,gandgriskgingfinancialgstatementsgorgmerelygbegreportinggth
eirgfindingsgatgthegendgofgthegengagement.gInstead,gauditgprofessionalsgwillgnowgbegcollecting
gand
3
, Richardson,gTeeter,gTerrellg–
gDatagAnalyticsgforgAccounting,g3e
analyzinggthegcompany’sgdatagsimilargtogthegwaygagbusinessganalystgwouldghelpgmanagementg
makegbettergbusinessgdecisions.g Ingthisgway,gdataganalyticsgoffersgvaluegtogthegauditgfunction.
5. Theregaregmanygpotentialganswers.gForgexample,gdataganalyticsgassociatedgwithgfinancialgre
portinggmayghelpgaccountantsgdeterminegifganygofgtheirginventorygobsolete?gItgmaygalsoghelp
gthegcompanygbenchmarkgongthegfinancialgstatementsgandgfinancialgreportinggofgothergsimil
argcompaniesgandgunderstandgtheirgaccountinggpracticesgtoghelpginfergtheirgown.
6. Managementgaccountantsgaddressgtheginformationgneedsgofgmanagement.g Theygwillgoftengs
eegwhatgquestionsgmanagementghas,gfindgapplicablegdatagtogaddressgthosegquestions,gcondu
ctganalysisgofgthegdata,gandgreportgthegresultsgtogmanagementgtoghelpgthemgmakegdata-
drivengdecisions.g ThisgisgconsistentgwithgthegdataganalyticsgprocessgandgthegIMPACTgmodel.
7. ThegIMPACTgcyclegsuggestsgangordergofg1)gIdentifyinggthegQuestions;g2)gMasteringgthegData;g3
)gPerforminggthegtestgplan;g4)gAddressinggandgrefininggresults;g5)gCommunicatingginsightsgandg
6)gTrackinggoutcomes.gThegcyclegstartsgwithgagquestiongandgthengidentifyinggdatagandgtestgpla
ngthatgmightgaddressgthatgquestion.gThegresultsgofgthegdataganalysisgaregcommunicatedgandgtr
ackedgwhichgmaygleadgtogadditional,gpossiblygmoregrefinedgquestionsgthatgthengrestartgthegcy
cle.
8. Dataganalysisgisgmostgeffectivegwhengagquestiongisgidentifiedgthatgneedsgtogbegaddressed.gT
hatgwillgfocusgtheganalysisgongwhichgdatagandgwhichgtestgmethodgmightgbegmostgeffectivegi
ngaddressinggorgansweringgthegquestion.
9. Masteringgthegdatagrequiresgonegtogknowgwhatgdatagisgavailablegandgwhethergitgmightgbegable
gtoghelpgaddressgthegbusinessgproblem.gWegneedgtogknowgeverythinggaboutgthegdata,gincludin
gghowgtogaccessgit,gitsgavailability,ghowgreliablegitgisg(ifgtheregaregerrors),gandgwhatgtimegperiod
sgitgcoversgtogmakegsuregitgcoincidesgwithgthegtiminggofgourgbusinessgproblem,getc.
10. Facebookgusesglinkgpredictiongtogpredictgagrelationshipgbetweengtwogpeoplegwhengitgsuggestsg
peoplegthatgoneglikelygknowsgduegtogsimilargothergfriends,gextendedgfamily,ghighgschools,gcolle
gegorgworkglocations,getc.
11. Whilegsamplinggisguseful,gitgisgstillgjustgthat,gsampling.gByglookinggatgallgofgthegtransactionsgandg
testinggthemgingagwaygthatgwillghighlightgthegonesgthatgaregthegbiggestgdollargitems,gorgaregmo
stgunusual,gthatgwillgallowgauditorsgtogfocusgongspecificgitemsgthatgmightgbegofgmaterialgsignific
ance.
12. Theregaregseveralgcorrectganswers.gOnegdatagapproachgmightgbegregressionganalysisgwhere,ggiv
engagbalancegofgtotalgaccountsgreceivablegheldgbygagfirm,ghowglonggitghasgbeengoutstanding,gifg
theyghavegpaidgdebtsgingthegpastgallgwillghelpgpredictgthegappropriateglevelgofgallowancegforgdo
ubtfulgaccountsgforgbadgdebts.
13. ThegDebt-to-
IncomegratiogmightgsuggestgtogLendingClubgthatgthegpersongaskinggforgthegloangwasgsimplygas
kinggforgtoogbiggofgagloangandgtheygwouldghaveglittlegabilitygtogrepaygit.gTheglowergthegcreditgs
core,gtheglessglikelygthegpotentialgborrowergwouldgbegablegtogrepaygthegloan.
14. TheregaregmanygothergpotentialgpredictorsgofgwhethergthegLendingClubgwouldgpaygagloan.gHer
egaregagfewgpossibilities:gWhatgothergdebtgdogtheyghave?gHowgmuchgisgtheirgdisposablegincome
4
