,Solutions Manual – Chapter 1
Solutions to Multiple Choice Questions
1. (LO 1-1) Big Data is often described by the four Vs, or
a. volume, velocity, veracity, and variability.
b. volume, velocity, veracity, and variety.
c. volume, volatility, veracity, and variability.
d. variability, velocity, veracity, and variety.
Answer: b
2. LO 1-4) Which data approach attempts to assign each unit in a population into a small set of
classes (or groups) where the unit best fits?
a. Regression
b. Similarity matching
c. Co-occurrence grouping
d. Classification
Answer: d
3. (LO 1-4) Which data approach attempts to identify similar individuals based on data known
about them?
a. Classification
b. Regression
c. Similarity matching
d. Data reduction
Answer: c
4. (LO 1-4) Which data approach attempts to predict connections between two data items? a.
Profiling
b. Classification
c. Link prediction
d. Regression
Answer: c
,5. (LO 1-6) Which of these terms is defined as being a central repository of descriptions for all of
the data attributes of the dataset?
a. Big Data
b. Data warehouse
c. Data dictionary
d. Data Analytics
Answer: c
6. (LO 1-5) Which skills were not emphasized that analytic-minded accountants should have?
a. Developed an analytics mindset
b. Data scrubbing and data preparation
c. Classification of test approaches
d. Statistical data analysis competency
Answer: c
7. (LO 1-5) In which areas were skills not emphasized for analytic-minded accountants? a. Data
quality
b. Descriptive data analysis
c. Data visualization and data reporting
d. Data and systems analysis and design
Answer: d
8. (LO 1-4) The IMPACT cycle includes all except the following steps:
a. perform test plan.
b. visualize the data.
c. master the data.
d. track outcomes.
Answer: b
9. (LO 1-4) The IMPACT cycle specifically includes all except the following steps: a. data
preparation.
b. communicate insights.
c. address and refine results.
d. perform test plan.
Answer: a
, 10. LO 1-1) By the year 2024, the volume of data created, captured, copied, and consumed
worldwide will be 149 ________ .
a. zettabytes
b. petabytes
c. exabytes
d. yottabytes
Answer: a
Solutions to Discussion and Analysis Questions
1. The accounting function is one of being an information provider. To the extent that data is
available to address accounting questions, be they tax, managerial, audit or financial questions.
With such rich available data, and software tools to prepare and analyze the data, data analytics
will continue to be an important tool for accountants to use.
2. Data analytics is defined as the process of evaluating data with the purpose of drawing
conclusions to address business questions. Indeed, effective Data Analytics provides a way to
search through large structured and unstructured data to identify unknown patterns or
relationships.
A university might learn from the analyzing the demographics of its current set of students in
order to attract its future student recruits. Did they come from cities or high schools that were
close by? Were their parents alumni of the university? Did they score high on certain parts of
the ACT? Were those offered a scholarship more likely to attend, etc.? Was social media
effective in attracting new, potentially stronger students? By analyzing this type of data,
previously unknown patterns will emerge that will make recruiting students more effective.
3. There are many potential answers. For example, Monsanto may use mathematical and
statistical models to plot out the best times to plant both male and female plants and where to
plant them to maximize yield. (
4. There are many potential answers. Data analytics gives both internal and external auditors
additional tools to examine every accounting transaction and assess for compliance with GAAP.
The audit process is changing from a traditional process toward a more automated one, which
will allow audit professionals to focus more on the logic and rationale behind data queries and
less on the gathering of the actual data. No longer will they be simply checking for errors,
material misstatements, fraud, and risk in financial statements or merely be reporting their
findings at the end of the engagement. Instead, audit professionals will now be collecting and
analyzing the company’s data similar to the way a business analyst would help management
make better business decisions. In this way, data analytics offers value to the audit function.
5. There are many potential answers. For example, data analytics associated with financial
reporting may help accountants determine if any of their inventory obsolete? It may also help
Solutions to Multiple Choice Questions
1. (LO 1-1) Big Data is often described by the four Vs, or
a. volume, velocity, veracity, and variability.
b. volume, velocity, veracity, and variety.
c. volume, volatility, veracity, and variability.
d. variability, velocity, veracity, and variety.
Answer: b
2. LO 1-4) Which data approach attempts to assign each unit in a population into a small set of
classes (or groups) where the unit best fits?
a. Regression
b. Similarity matching
c. Co-occurrence grouping
d. Classification
Answer: d
3. (LO 1-4) Which data approach attempts to identify similar individuals based on data known
about them?
a. Classification
b. Regression
c. Similarity matching
d. Data reduction
Answer: c
4. (LO 1-4) Which data approach attempts to predict connections between two data items? a.
Profiling
b. Classification
c. Link prediction
d. Regression
Answer: c
,5. (LO 1-6) Which of these terms is defined as being a central repository of descriptions for all of
the data attributes of the dataset?
a. Big Data
b. Data warehouse
c. Data dictionary
d. Data Analytics
Answer: c
6. (LO 1-5) Which skills were not emphasized that analytic-minded accountants should have?
a. Developed an analytics mindset
b. Data scrubbing and data preparation
c. Classification of test approaches
d. Statistical data analysis competency
Answer: c
7. (LO 1-5) In which areas were skills not emphasized for analytic-minded accountants? a. Data
quality
b. Descriptive data analysis
c. Data visualization and data reporting
d. Data and systems analysis and design
Answer: d
8. (LO 1-4) The IMPACT cycle includes all except the following steps:
a. perform test plan.
b. visualize the data.
c. master the data.
d. track outcomes.
Answer: b
9. (LO 1-4) The IMPACT cycle specifically includes all except the following steps: a. data
preparation.
b. communicate insights.
c. address and refine results.
d. perform test plan.
Answer: a
, 10. LO 1-1) By the year 2024, the volume of data created, captured, copied, and consumed
worldwide will be 149 ________ .
a. zettabytes
b. petabytes
c. exabytes
d. yottabytes
Answer: a
Solutions to Discussion and Analysis Questions
1. The accounting function is one of being an information provider. To the extent that data is
available to address accounting questions, be they tax, managerial, audit or financial questions.
With such rich available data, and software tools to prepare and analyze the data, data analytics
will continue to be an important tool for accountants to use.
2. Data analytics is defined as the process of evaluating data with the purpose of drawing
conclusions to address business questions. Indeed, effective Data Analytics provides a way to
search through large structured and unstructured data to identify unknown patterns or
relationships.
A university might learn from the analyzing the demographics of its current set of students in
order to attract its future student recruits. Did they come from cities or high schools that were
close by? Were their parents alumni of the university? Did they score high on certain parts of
the ACT? Were those offered a scholarship more likely to attend, etc.? Was social media
effective in attracting new, potentially stronger students? By analyzing this type of data,
previously unknown patterns will emerge that will make recruiting students more effective.
3. There are many potential answers. For example, Monsanto may use mathematical and
statistical models to plot out the best times to plant both male and female plants and where to
plant them to maximize yield. (
4. There are many potential answers. Data analytics gives both internal and external auditors
additional tools to examine every accounting transaction and assess for compliance with GAAP.
The audit process is changing from a traditional process toward a more automated one, which
will allow audit professionals to focus more on the logic and rationale behind data queries and
less on the gathering of the actual data. No longer will they be simply checking for errors,
material misstatements, fraud, and risk in financial statements or merely be reporting their
findings at the end of the engagement. Instead, audit professionals will now be collecting and
analyzing the company’s data similar to the way a business analyst would help management
make better business decisions. In this way, data analytics offers value to the audit function.
5. There are many potential answers. For example, data analytics associated with financial
reporting may help accountants determine if any of their inventory obsolete? It may also help
