Question 1

Which type of analysis assists with understanding what is happening right now?
A)Descriptive.
B)Diagnostic.
C)Predictive.
D)Prescriptive.

Accepted Answer

The answer of Which type of analysis assists with understanding...

Question 2

The use of data analytics will likely result in significant changes to clients' expectations of their auditors.Which of the following is most likely not one of those expected changes?
A)More innovative thinking.
B)More time spent gathering and testing data.
C)Deeper and broader insights.
D)Faster and more efficient delivery of audit findings.

Accepted Answer

The use of data analytics is expected to increase efficiency in gathering and testing data, reducing the amount of time auditors need to spend on these tasks. Therefore, clients are not likely to expect more time to be spent on these tasks. Instead, they are likely to expect more innovative thinking, deeper and broader insights, and faster delivery of audit findings.

Question 3

Which of the following best desribes the skill sets used in data analytics?
A)Building data warehouses;Populating data structures;Mining the data.
B)Acquiring/cleansing data;Creating data structures/models;Mining/analyzing data.
C)Developing data structures/models;Acquiring storage capacity;Analyzing the data.
D)Creating data;Building data structures;Piloting data studies.

Accepted Answer

The skill sets used in data analytics include acquiring/cleansing data, creating data structures/models, and mining/analyzing data. Building data warehouses and creating data are not specific tasks related to data analytics. Acquiring storage capacity and piloting data studies are also not necessary components of data analytics skill sets.

Question 4

Which of the following is not an example of data questions which arise during the second step of the AMPS model,mastering the data?
A)Data reliability.
B)Data integrity.
C)Data serviceability.
D)Data accessibility.

Accepted Answer

Data serviceability is not a question that arises during the second step of the AMPS model. The other options, data reliability, integrity, and accessibility are all important factors to consider when mastering the data.

Question 5

When using an analytical mindset which of the following is the first task?
A)Master the data.
B)Share the story.
C)Ask the right question.
D)Request data.

Accepted Answer

The first task when using an analytical mindset is to ask the right question. This sets the direction for analysis and ensures that the data being analyzed is relevant and will provide meaningful insights. Only after asking the right question can one move on to mastering the data and sharing the story. Requesting data can be done at any point in the analytical process.

Question 6

Which of the following best describes how external auditors' interactions with their clients is likely to change due to the use of data analytics in the audit process?
A)External auditors will spend less time on audits and will not need to spend time with clients outside the audit.
B)External auditors will spend more time on detailed audit tasks,resulting in longer audit engagements.
C)External auditors will only interact with their clients virtually.
D)External auditors will stay engaged with clients beyond the audit.

Accepted Answer

The use of data analytics in the audit process will free up auditors' time from routine tasks, allowing them to focus on higher-level tasks that require more professional judgment and interaction with clients. Therefore, external auditors will stay engaged with clients beyond the audit, providing valuable insights to clients and maintaining a collaborative relationship with them.

Question 7

Which of the following best describes the AICPA's Audit Data Standards (ADS)?
A)The base level of testing procedures that should be performed on AIS data.
B)A set of analytic procedures designed to be used with modern ERPs' large datasets.
C)A set of standards for data files and fields designed to support external audits.
D)The codification of all auditing guidelines pertaining to the data generated by AISs.

Accepted Answer

The AICPA's Audit Data Standards (ADS) are a set of standards for data files and fields designed to support external audits. These standards provide a common language and structure for auditors to use when accessing and analyzing data from various sources, including ERP systems. They are not a base level of testing procedures or the codification of all auditing guidelines pertaining to the data generated by AISs.

Question 8

Which of the following does not desribe characteristics of the AMPS model?
A)Iterative.
B)Can lead to asking deeper questions.
C)Binary.
D)Leaves the decision maker more knowledgable.

Accepted Answer

The AMPS model is not binary, as it allows for multiple options and shades of gray in decision making. The other characteristics listed, such as being iterative and leading to deeper questions, are all accurate descriptions of the AMPS model.

Question 9

Which of the following is a set of standards created by the AICPA for data files and fields in order to support external audits?
A)Extract,Transform & Load (ETL).
B)Online Analytical Processing (OLAP).
C)Audit Control Language (ACL).
D)Audit Data Standards (ADS).

Accepted Answer

Audit Data Standards (ADS) is a set of standards created by the AICPA for data files and fields in order to support external audits. Extract, Transform & Load (ETL) is a process for moving data between databases. Online Analytical Processing (OLAP) is a technology used for analyzing data from multiple perspectives. Audit Control Language (ACL) is a software used for data analysis and audit analysis. None of these options specifically address the creation of standards for supporting external audits.

Question 10

Which type of analysis assists with understanding why something happened during the third step of the AMPS model,performing the analysis?
A)Descriptive.
B)Diagnostic.
C)Predictive.
D)Prescriptive.

Accepted Answer

Diagnostic analysis assists in understanding why something happened by identifying the root cause of a problem or issue. It involves gathering and analyzing data to determine the underlying factors that contributed to the outcome.

Question 11

Data analytics can help in accurately identifying organizational risks.All of the following are examples of such risk except:
A)"What-if" business forecasting.
B)Identifying security breaches.
C)Identifying flawed business processes.
D)Monitoring compliance with regulatory requirements.

Accepted Answer

"What-if" business forecasting is not a risk itself, but rather a tool to help organizations understand potential risks and opportunities. The other options (identifying security breaches, identifying flawed business processes, monitoring compliance with regulatory requirements) all relate directly to identifying and addressing actual risks within an organization.

Question 12

Which type of analysis assists with defining how to optimize performance based on a potential constraint?
A)Descriptive.
B)Diagnostic.
C)Predictive.
D)Prescriptive.

Accepted Answer

Prescriptive analysis is used to provide recommendations and solutions for optimizing performance based on potential constraints. It considers various factors and constraints to determine the best possible course of action for maximizing results.

Question 13

Which of the following should an analyst not do when on the second step of the AMPS model,mastering the data?
A)Analyze the data.
B)Analyze the cost versus the value of obtaining needed data.
C)Ensure the data is not outdated.
D)Assess privacy concerns with the data.

Accepted Answer

In the second step of the AMPS (Acquire, Master, Prepare, Share) model, "mastering the data" primarily involves ensuring data quality, relevance, and security. Analyzing the data is not part of mastering the data; it is more aligned with the "Prepare" or "Share" steps where data is analyzed for insights or shared with stakeholders.

Question 14

Which of the following is not a good example of how accountants might use data analytics to help evaluate estimates used to value financial statement accounts?
A)Assess the likelihood and level of expected warranty claims.
B)Estimate the collectibility of accounts receivable balances.
C)Automate the order entry process for online customers.
D)Assess property,plant & equipment values based on current comparable prices.

Accepted Answer

Automating the order entry process for online customers does not relate to the evaluation of estimates used to value financial statement accounts. The other options all involve using data analytics to assess or estimate the value of financial statement accounts.

Question 15

Which of the following is not a type of analyses performed during the third step of the AMPS model,performing the analysis?
A)Descriptive.
B)Predictive.
C)Prescriptive.
D)Reductive.

Accepted Answer

The types of analyses performed during the third step of the AMPS model, performing the analysis, include descriptive, predictive, and prescriptive. Reductive is not a type of analysis performed during this step.

Question 16

Which of the following would not help create a appropriate question in the AMPS model?
A)Ensuring the data has integrity.
B)Making the statement succinct.
C)Narrowing the scope of the question.
D)Knowledge of business processes.

Accepted Answer

Ensuring the data has integrity is important for data accuracy, but it is not directly related to creating an appropriate question in the AMPS model. The other options listed (B, C, D) are all important factors in creating a relevant and effective question in the AMPS model.

Question 17

Which of the following is not a part of the AMPS model?
A)Ask the right questions.
B)Share the story.
C)Master the data.
D)Parse the data.

Accepted Answer

The AMPS model consists of Ask the right questions, Master the data, Perform the analysis, and Share the story. "Parse the data" is not part of the AMPS model.

Question 18

Which of the following is an example of an appropriate question to begin analyzing a business problem?
A)Why is our newest product not selling as expected in Kentucky?
B)Why is net income declining?
C)How can we increase employee morale in North Carolina?
D)Can we use confidential data?

Accepted Answer

This question specifically identifies a problem with a particular product and location. It allows for targeted analysis and potential solutions. The other options are either too broad or not relevant to analyzing a business problem.

Quiz 10: Data Analytics in Accounting: Concepts and the Amps Model

Which type of analysis assists with understanding what is happening right now?

The use of data analytics will likely result in significant changes to clients' expectations of their auditors.Which of the following is most likely not one of those expected changes?

Which of the following best desribes the skill sets used in data analytics?

Which of the following is not an example of data questions which arise during the second step of the AMPS model,mastering the data?

When using an analytical mindset which of the following is the first task?

Which of the following best describes how external auditors' interactions with their clients is likely to change due to the use of data analytics in the audit process?

Which of the following best describes the AICPA's Audit Data Standards (ADS) ?

Which of the following does not desribe characteristics of the AMPS model?

Which of the following is a set of standards created by the AICPA for data files and fields in order to support external audits?

Which type of analysis assists with understanding why something happened during the third step of the AMPS model,performing the analysis?

Data analytics can help in accurately identifying organizational risks.All of the following are examples of such risk except:

Which type of analysis assists with defining how to optimize performance based on a potential constraint?

Which of the following should an analyst not do when on the second step of the AMPS model,mastering the data?

Which of the following is not a good example of how accountants might use data analytics to help evaluate estimates used to value financial statement accounts?

Which of the following is not a type of analyses performed during the third step of the AMPS model,performing the analysis?

Which of the following would not help create a appropriate question in the AMPS model?

Which of the following is not a part of the AMPS model?

Which of the following is an example of an appropriate question to begin analyzing a business problem?