Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
SOLUTION MANUAL FORj j
DatajAnalyticsjforjAccounting,j3rdjEditionjRichardsonjChapterj
1-9
SolutionsjManualj–jChapterj1
SolutionsjtojMultiplejChoicejQuestions
1. (LOj1-1)jBigjDatajisjoftenjdescribedjbyjthejfourjVs,jor
a. volume,jvelocity,jveracity,jandjvariability.
b. volume,jvelocity,jveracity,jandjvariety.
c. volume,jvolatility,jveracity,jandjvariability.
d. variability,jvelocity,jveracity,jandjvariety.
Answer:jb
2. LOj1-
4)jWhichjdatajapproachjattemptsjtojassignjeachjunitjinjajpopulationjintojajsmalljsetjofjclassesj(orjg
roups)jwherejthejunitjbestjfits?
a. Regression
b. Similarityjmatching
c. Co-occurrencejgrouping
d. Classification
Answer:jd
3. (LOj1-
4)jWhichjdatajapproachjattemptsjtojidentifyjsimilarjindividualsjbasedjonjdatajknownjaboutjthem
?
a. Classification
b. Regression
c. Similarityjmatching
d. Datajreduction
Answer:jc
4. (LOj1-4)jWhichjdatajapproachjattemptsjtojpredictjconnectionsjbetweenjtwojdatajitems?
a. Profiling
b. Classification
c. Linkjprediction
d. Regression
1
, Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
Answer:jc
5. (LOj1-
6)jWhichjofjthesejtermsjisjdefinedjasjbeingjajcentraljrepositoryjofjdescriptionsjforjalljofjthejdatajattri
butesjofjthejdataset?
a. BigjData
b. Datajwarehouse
c. Datajdictionary
d. DatajAnalytics
Answer:jc
6. (LOj1-5)jWhichjskillsjwerejnotjemphasizedjthatjanalytic-mindedjaccountantsjshouldjhave?
a. Developedjanjanalyticsjmindset
b. Datajscrubbingjandjdatajpreparation
c. Classificationjofjtestjapproaches
d. Statisticaljdatajanalysisjcompetency
Answer:jc
7. (LOj1-5)jInjwhichjareasjwerejskillsjnotjemphasizedjforjanalytic-mindedjaccountants?
a. Datajquality
b. Descriptivejdatajanalysis
c. Datajvisualizationjandjdatajreporting
d. Datajandjsystemsjanalysisjandjdesign
Answer:jd
8. (LOj1-4)jThejIMPACTjcyclejincludesjalljexceptjthejfollowingjsteps:
a. performjtestjplan.
b. visualizejthejdata.
c. masterjthejdata.
d. trackjoutcomes.
Answer:jb
9. (LOj1-4)jThejIMPACTjcyclejspecificallyjincludesjalljexceptjthejfollowingjsteps:
a. datajpreparation.
b. communicatejinsights.
c. addressjandjrefinejresults.
d. performjtestjplan.
2
, Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
Answer:ja
10. LOj1-
1)jByjthejyearj2024,jthejvolumejofjdatajcreated,jcaptured,jcopied,jandjconsumedjworldwidej
willjbej149j .
a. zettabytes
b. petabytes
c. exabytes
d. yottabytes
Answer:ja
SolutionsjtojDiscussionjandjAnalysisjQuestions
1. Thejaccountingjfunctionjisjonejofjbeingjanjinformationjprovider.j Tojthejextentjthatjdatajisjavailabl
ejtojaddressjaccountingjquestions,jbejtheyjtax,jmanagerial,jauditjorjfinancialjquestions.jWithjsuchj
richjavailablejdata,jandjsoftwarejtoolsjtojpreparejandjanalyzejthejdata,jdatajanalyticsjwilljcontinue
jtojbejanjimportantjtooljforjaccountantsjtojuse.
2. Datajanalyticsjisjdefinedjasjthejprocessjofjevaluatingjdatajwithjthejpurposejofjdrawingjconclusi
onsjtojaddressjbusinessjquestions.jIndeed,jeffectivejDatajAnalyticsjprovidesjajwayjtojsearchjthr
oughjlargejstructuredjandjunstructuredjdatajtojidentifyjunknownjpatternsjorjrelationships.
Ajuniversityjmightjlearnjfromjthejanalyzingjthejdemographicsjofjitsjcurrentjsetjofjstudentsjinjorde
rjtojattractjitsjfuturejstudentjrecruits.jDidjtheyjcomejfromjcitiesjorjhighjschoolsjthatjwerejclosejby?
jWerejtheirjparentsjalumnijofjthejuniversity?jDidjtheyjscorejhighjonjcertainjpartsjofjthejACT?jWer
ejthosejofferedjajscholarshipjmorejlikelyjtojattend,jetc.?jWasjsocialjmediajeffectivejinjattractingjn
ew,jpotentiallyjstrongerjstudents?jByjanalyzingjthisjtypejofjdata,jpreviouslyjunknownjpatternsjwil
ljemergejthatjwilljmakejrecruitingjstudentsjmorejeffective.
3. Therejarejmanyjpotentialjanswers.j Forjexample,jMonsantojmayjusejmathematicaljandjstatistical
jmodelsjtojplotjoutjthejbestjtimesjtojplantjbothjmalejandjfemalejplantsjandjwherejtojplantjthemjt
ojmaximizejyield.j(https://www.cio.com/article/3221621/analytics/6-data-janalytics-success-
stories-an-inside-look.html#tk.cio_rs)
4. Therejarejmanyjpotentialjanswers.jDatajanalyticsjgivesjbothjinternaljandjexternaljauditorsjadditi
onaljtoolsjtojexaminejeveryjaccountingjtransactionjandjassessjforjcompliancejwithjGAAP.jThejaud
itjprocessjisjchangingjfromjajtraditionaljprocessjtowardjajmorejautomatedjone,jwhichjwilljallowja
uditjprofessionalsjtojfocusjmorejonjthejlogicjandjrationalejbehindjdatajqueriesjandjlessjonjthejgat
heringjofjthejactualjdata.jNojlongerjwilljtheyjbejsimplyjcheckingjforjerrors,jmaterialjmisstatement
s,jfraud,jandjriskjinjfinancialjstatementsjorjmerelyjbejreportingjtheirjfindingsjatjthejendjofjthejeng
agement.jInstead,jauditjprofessionalsjwilljnowjbejcollectingjand
3
, Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
analyzingjthejcompany’sjdatajsimilarjtojthejwayjajbusinessjanalystjwouldjhelpjmanagementjmake
jbetterjbusinessjdecisions.j Injthisjway,jdatajanalyticsjoffersjvaluejtojthejauditjfunction.
5. Therejarejmanyjpotentialjanswers.jForjexample,jdatajanalyticsjassociatedjwithjfinancialjreporti
ngjmayjhelpjaccountantsjdeterminejifjanyjofjtheirjinventoryjobsolete?jItjmayjalsojhelpjthejcomp
anyjbenchmarkjonjthejfinancialjstatementsjandjfinancialjreportingjofjotherjsimilarjcompaniesja
ndjunderstandjtheirjaccountingjpracticesjtojhelpjinferjtheirjown.
6. Managementjaccountantsjaddressjthejinformationjneedsjofjmanagement.j Theyjwilljoftenjseejw
hatjquestionsjmanagementjhas,jfindjapplicablejdatajtojaddressjthosejquestions,jconductjanalysi
sjofjthejdata,jandjreportjthejresultsjtojmanagementjtojhelpjthemjmakejdata-
drivenjdecisions.j ThisjisjconsistentjwithjthejdatajanalyticsjprocessjandjthejIMPACTjmodel.
7. ThejIMPACTjcyclejsuggestsjanjorderjofj1)jIdentifyingjthejQuestions;j2)jMasteringjthejData;j3)jPerf
ormingjthejtestjplan;j4)jAddressingjandjrefiningjresults;j5)jCommunicatingjinsightsjandj6)jTrackin
gjoutcomes.jThejcyclejstartsjwithjajquestionjandjthenjidentifyingjdatajandjtestjplanjthatjmightjadd
ressjthatjquestion.jThejresultsjofjthejdatajanalysisjarejcommunicatedjandjtrackedjwhichjmayjlead
jtojadditional,jpossiblyjmorejrefinedjquestionsjthatjthenjrestartjthejcycle.
8. Datajanalysisjisjmostjeffectivejwhenjajquestionjisjidentifiedjthatjneedsjtojbejaddressed.jThatjwil
ljfocusjthejanalysisjonjwhichjdatajandjwhichjtestjmethodjmightjbejmostjeffectivejinjaddressingj
orjansweringjthejquestion.
9. Masteringjthejdatajrequiresjonejtojknowjwhatjdatajisjavailablejandjwhetherjitjmightjbejablejtojhel
pjaddressjthejbusinessjproblem.jWejneedjtojknowjeverythingjaboutjthejdata,jincludingjhowjtojacc
essjit,jitsjavailability,jhowjreliablejitjisj(ifjtherejarejerrors),jandjwhatjtimejperiodsjitjcoversjtojmakej
surejitjcoincidesjwithjthejtimingjofjourjbusinessjproblem,jetc.
10. Facebookjusesjlinkjpredictionjtojpredictjajrelationshipjbetweenjtwojpeoplejwhenjitjsuggestsjpeo
plejthatjonejlikelyjknowsjduejtojsimilarjotherjfriends,jextendedjfamily,jhighjschools,jcollegejorjwor
kjlocations,jetc.
11. Whilejsamplingjisjuseful,jitjisjstilljjustjthat,jsampling.jByjlookingjatjalljofjthejtransactionsjandjtestin
gjthemjinjajwayjthatjwilljhighlightjthejonesjthatjarejthejbiggestjdollarjitems,jorjarejmostjunusual,jt
hatjwilljallowjauditorsjtojfocusjonjspecificjitemsjthatjmightjbejofjmaterialjsignificance.
12. Therejarejseveraljcorrectjanswers.jOnejdatajapproachjmightjbejregressionjanalysisjwhere,jgivenjaj
balancejofjtotaljaccountsjreceivablejheldjbyjajfirm,jhowjlongjitjhasjbeenjoutstanding,jifjtheyjhavejp
aidjdebtsjinjthejpastjalljwilljhelpjpredictjthejappropriatejleveljofjallowancejforjdoubtfuljaccountsjfo
rjbadjdebts.
13. ThejDebt-to-
IncomejratiojmightjsuggestjtojLendingClubjthatjthejpersonjaskingjforjthejloanjwasjsimplyjaskingjf
orjtoojbigjofjajloanjandjtheyjwouldjhavejlittlejabilityjtojrepayjit.jThejlowerjthejcreditjscore,jthejless
jlikelyjthejpotentialjborrowerjwouldjbejablejtojrepayjthejloan.
14. TherejarejmanyjotherjpotentialjpredictorsjofjwhetherjthejLendingClubjwouldjpayjajloan.jHerejarej
ajfewjpossibilities:jWhatjotherjdebtjdojtheyjhave?jHowjmuchjisjtheirjdisposablejincome?jDo
4
SOLUTION MANUAL FORj j
DatajAnalyticsjforjAccounting,j3rdjEditionjRichardsonjChapterj
1-9
SolutionsjManualj–jChapterj1
SolutionsjtojMultiplejChoicejQuestions
1. (LOj1-1)jBigjDatajisjoftenjdescribedjbyjthejfourjVs,jor
a. volume,jvelocity,jveracity,jandjvariability.
b. volume,jvelocity,jveracity,jandjvariety.
c. volume,jvolatility,jveracity,jandjvariability.
d. variability,jvelocity,jveracity,jandjvariety.
Answer:jb
2. LOj1-
4)jWhichjdatajapproachjattemptsjtojassignjeachjunitjinjajpopulationjintojajsmalljsetjofjclassesj(orjg
roups)jwherejthejunitjbestjfits?
a. Regression
b. Similarityjmatching
c. Co-occurrencejgrouping
d. Classification
Answer:jd
3. (LOj1-
4)jWhichjdatajapproachjattemptsjtojidentifyjsimilarjindividualsjbasedjonjdatajknownjaboutjthem
?
a. Classification
b. Regression
c. Similarityjmatching
d. Datajreduction
Answer:jc
4. (LOj1-4)jWhichjdatajapproachjattemptsjtojpredictjconnectionsjbetweenjtwojdatajitems?
a. Profiling
b. Classification
c. Linkjprediction
d. Regression
1
, Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
Answer:jc
5. (LOj1-
6)jWhichjofjthesejtermsjisjdefinedjasjbeingjajcentraljrepositoryjofjdescriptionsjforjalljofjthejdatajattri
butesjofjthejdataset?
a. BigjData
b. Datajwarehouse
c. Datajdictionary
d. DatajAnalytics
Answer:jc
6. (LOj1-5)jWhichjskillsjwerejnotjemphasizedjthatjanalytic-mindedjaccountantsjshouldjhave?
a. Developedjanjanalyticsjmindset
b. Datajscrubbingjandjdatajpreparation
c. Classificationjofjtestjapproaches
d. Statisticaljdatajanalysisjcompetency
Answer:jc
7. (LOj1-5)jInjwhichjareasjwerejskillsjnotjemphasizedjforjanalytic-mindedjaccountants?
a. Datajquality
b. Descriptivejdatajanalysis
c. Datajvisualizationjandjdatajreporting
d. Datajandjsystemsjanalysisjandjdesign
Answer:jd
8. (LOj1-4)jThejIMPACTjcyclejincludesjalljexceptjthejfollowingjsteps:
a. performjtestjplan.
b. visualizejthejdata.
c. masterjthejdata.
d. trackjoutcomes.
Answer:jb
9. (LOj1-4)jThejIMPACTjcyclejspecificallyjincludesjalljexceptjthejfollowingjsteps:
a. datajpreparation.
b. communicatejinsights.
c. addressjandjrefinejresults.
d. performjtestjplan.
2
, Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
Answer:ja
10. LOj1-
1)jByjthejyearj2024,jthejvolumejofjdatajcreated,jcaptured,jcopied,jandjconsumedjworldwidej
willjbej149j .
a. zettabytes
b. petabytes
c. exabytes
d. yottabytes
Answer:ja
SolutionsjtojDiscussionjandjAnalysisjQuestions
1. Thejaccountingjfunctionjisjonejofjbeingjanjinformationjprovider.j Tojthejextentjthatjdatajisjavailabl
ejtojaddressjaccountingjquestions,jbejtheyjtax,jmanagerial,jauditjorjfinancialjquestions.jWithjsuchj
richjavailablejdata,jandjsoftwarejtoolsjtojpreparejandjanalyzejthejdata,jdatajanalyticsjwilljcontinue
jtojbejanjimportantjtooljforjaccountantsjtojuse.
2. Datajanalyticsjisjdefinedjasjthejprocessjofjevaluatingjdatajwithjthejpurposejofjdrawingjconclusi
onsjtojaddressjbusinessjquestions.jIndeed,jeffectivejDatajAnalyticsjprovidesjajwayjtojsearchjthr
oughjlargejstructuredjandjunstructuredjdatajtojidentifyjunknownjpatternsjorjrelationships.
Ajuniversityjmightjlearnjfromjthejanalyzingjthejdemographicsjofjitsjcurrentjsetjofjstudentsjinjorde
rjtojattractjitsjfuturejstudentjrecruits.jDidjtheyjcomejfromjcitiesjorjhighjschoolsjthatjwerejclosejby?
jWerejtheirjparentsjalumnijofjthejuniversity?jDidjtheyjscorejhighjonjcertainjpartsjofjthejACT?jWer
ejthosejofferedjajscholarshipjmorejlikelyjtojattend,jetc.?jWasjsocialjmediajeffectivejinjattractingjn
ew,jpotentiallyjstrongerjstudents?jByjanalyzingjthisjtypejofjdata,jpreviouslyjunknownjpatternsjwil
ljemergejthatjwilljmakejrecruitingjstudentsjmorejeffective.
3. Therejarejmanyjpotentialjanswers.j Forjexample,jMonsantojmayjusejmathematicaljandjstatistical
jmodelsjtojplotjoutjthejbestjtimesjtojplantjbothjmalejandjfemalejplantsjandjwherejtojplantjthemjt
ojmaximizejyield.j(https://www.cio.com/article/3221621/analytics/6-data-janalytics-success-
stories-an-inside-look.html#tk.cio_rs)
4. Therejarejmanyjpotentialjanswers.jDatajanalyticsjgivesjbothjinternaljandjexternaljauditorsjadditi
onaljtoolsjtojexaminejeveryjaccountingjtransactionjandjassessjforjcompliancejwithjGAAP.jThejaud
itjprocessjisjchangingjfromjajtraditionaljprocessjtowardjajmorejautomatedjone,jwhichjwilljallowja
uditjprofessionalsjtojfocusjmorejonjthejlogicjandjrationalejbehindjdatajqueriesjandjlessjonjthejgat
heringjofjthejactualjdata.jNojlongerjwilljtheyjbejsimplyjcheckingjforjerrors,jmaterialjmisstatement
s,jfraud,jandjriskjinjfinancialjstatementsjorjmerelyjbejreportingjtheirjfindingsjatjthejendjofjthejeng
agement.jInstead,jauditjprofessionalsjwilljnowjbejcollectingjand
3
, Richardson,jTeeter,jTerrellj–jDatajAnalyticsjforjAccounting,j3e
analyzingjthejcompany’sjdatajsimilarjtojthejwayjajbusinessjanalystjwouldjhelpjmanagementjmake
jbetterjbusinessjdecisions.j Injthisjway,jdatajanalyticsjoffersjvaluejtojthejauditjfunction.
5. Therejarejmanyjpotentialjanswers.jForjexample,jdatajanalyticsjassociatedjwithjfinancialjreporti
ngjmayjhelpjaccountantsjdeterminejifjanyjofjtheirjinventoryjobsolete?jItjmayjalsojhelpjthejcomp
anyjbenchmarkjonjthejfinancialjstatementsjandjfinancialjreportingjofjotherjsimilarjcompaniesja
ndjunderstandjtheirjaccountingjpracticesjtojhelpjinferjtheirjown.
6. Managementjaccountantsjaddressjthejinformationjneedsjofjmanagement.j Theyjwilljoftenjseejw
hatjquestionsjmanagementjhas,jfindjapplicablejdatajtojaddressjthosejquestions,jconductjanalysi
sjofjthejdata,jandjreportjthejresultsjtojmanagementjtojhelpjthemjmakejdata-
drivenjdecisions.j ThisjisjconsistentjwithjthejdatajanalyticsjprocessjandjthejIMPACTjmodel.
7. ThejIMPACTjcyclejsuggestsjanjorderjofj1)jIdentifyingjthejQuestions;j2)jMasteringjthejData;j3)jPerf
ormingjthejtestjplan;j4)jAddressingjandjrefiningjresults;j5)jCommunicatingjinsightsjandj6)jTrackin
gjoutcomes.jThejcyclejstartsjwithjajquestionjandjthenjidentifyingjdatajandjtestjplanjthatjmightjadd
ressjthatjquestion.jThejresultsjofjthejdatajanalysisjarejcommunicatedjandjtrackedjwhichjmayjlead
jtojadditional,jpossiblyjmorejrefinedjquestionsjthatjthenjrestartjthejcycle.
8. Datajanalysisjisjmostjeffectivejwhenjajquestionjisjidentifiedjthatjneedsjtojbejaddressed.jThatjwil
ljfocusjthejanalysisjonjwhichjdatajandjwhichjtestjmethodjmightjbejmostjeffectivejinjaddressingj
orjansweringjthejquestion.
9. Masteringjthejdatajrequiresjonejtojknowjwhatjdatajisjavailablejandjwhetherjitjmightjbejablejtojhel
pjaddressjthejbusinessjproblem.jWejneedjtojknowjeverythingjaboutjthejdata,jincludingjhowjtojacc
essjit,jitsjavailability,jhowjreliablejitjisj(ifjtherejarejerrors),jandjwhatjtimejperiodsjitjcoversjtojmakej
surejitjcoincidesjwithjthejtimingjofjourjbusinessjproblem,jetc.
10. Facebookjusesjlinkjpredictionjtojpredictjajrelationshipjbetweenjtwojpeoplejwhenjitjsuggestsjpeo
plejthatjonejlikelyjknowsjduejtojsimilarjotherjfriends,jextendedjfamily,jhighjschools,jcollegejorjwor
kjlocations,jetc.
11. Whilejsamplingjisjuseful,jitjisjstilljjustjthat,jsampling.jByjlookingjatjalljofjthejtransactionsjandjtestin
gjthemjinjajwayjthatjwilljhighlightjthejonesjthatjarejthejbiggestjdollarjitems,jorjarejmostjunusual,jt
hatjwilljallowjauditorsjtojfocusjonjspecificjitemsjthatjmightjbejofjmaterialjsignificance.
12. Therejarejseveraljcorrectjanswers.jOnejdatajapproachjmightjbejregressionjanalysisjwhere,jgivenjaj
balancejofjtotaljaccountsjreceivablejheldjbyjajfirm,jhowjlongjitjhasjbeenjoutstanding,jifjtheyjhavejp
aidjdebtsjinjthejpastjalljwilljhelpjpredictjthejappropriatejleveljofjallowancejforjdoubtfuljaccountsjfo
rjbadjdebts.
13. ThejDebt-to-
IncomejratiojmightjsuggestjtojLendingClubjthatjthejpersonjaskingjforjthejloanjwasjsimplyjaskingjf
orjtoojbigjofjajloanjandjtheyjwouldjhavejlittlejabilityjtojrepayjit.jThejlowerjthejcreditjscore,jthejless
jlikelyjthejpotentialjborrowerjwouldjbejablejtojrepayjthejloan.
14. TherejarejmanyjotherjpotentialjpredictorsjofjwhetherjthejLendingClubjwouldjpayjajloan.jHerejarej
ajfewjpossibilities:jWhatjotherjdebtjdojtheyjhave?jHowjmuchjisjtheirjdisposablejincome?jDo
4
