@PROFDOCDIGITALLIBRARIES
Solution Manual
Data and Analytics in Accounting: An Integrated Approach 1e Ann C.
Dzuranin, Guido Geerts, Margarita Lenk
PR
O
FD
O
C
CHAPTER 1
DATA AND ANALYTICS IN THE ACCOUNTING
PROFESSION
Learning Objectives:
LO 1.1: Summarize how advances in data and technology are impacting accounting professionals.
LO 1.2: Describe the stages of the data analysis process.
LO 1.3: Identify the skills necessary to perform data analysis.
LO 1.4: Explain how to apply a data analytics mindset during the data analysis process.
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ANSWERS TO MULTIPLE CHOICE QUESTIONS
LO 1.2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
1. A Leverage Technology to Develop and Enhance Functional Competencies
LO 1.1, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
7. D
2. C LO 1.2, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
LO 1.1, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
8. C
3. C LO 1.2, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
LO 1.2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
9. A
4. B
PR
LO 1.3, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
LO 1 2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
10.D
5. B LO 1.3, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
LO 1.2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
11.B
6. C
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LO 1.3, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
14.A
LO 1.4, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
12.A
LO 1.4, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
15.B
LO 1.4, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
13.D
LO 1.4, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
ANSWERS TO REVIEW QUESTIONS
PR
1. Both the CPA exam and the CMA exam have added data analytic content to their exams. This is in
response to what new professionals need to know as they enter the accounting profession. The CPA
Exam Evolution is a strong indication of how the accounting profession is changing. The new CPA exam
will have more technology and data analytics questions in the Core exam, as well as the Discipline
exams.
O
LO 1.1, BT: K, Difficulty: Easy, TOT: 6 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
2.
FD
Changes Accounting Practice Area
1. Ability to use entire data sets to identify ANS: a. Auditing, c. Managerial accounting
exceptions, anomalies, and outliers
2. Automation of manual processes ANS: a., b., c., d. (All areas)
3. Automation of journal entries ANS: b. Financial accounting
O
4. Risk identification ANS:. a. Auditing, c. Managerial accounting
5. Forecasting ANS: b. Financial accounting, c. Managerial
accounting
C
6. Compliance reporting ANS: d. Tax accounting
LO 1.1, BT: C, Difficulty: Medium, TOT: 8 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
3. Data are raw facts and figures. Technology helps covert that data into information. Information is the
knowledge gained from analyzing the data.
LO 1.1, BT: C, Difficulty: Medium, TOT: 6 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
4.
Purpose Method
1. Understanding what is happening currently ANS: a. Descriptive
and what has happened in the past.
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2. Understanding what should happen to meet ANS: d. Prescriptive
our goals and objectives.
3. Understanding what might happen in the ANS: c. Prescriptive
future.
4. Understanding why something happened. ANS: b. Diagnostic
LO 1.2, BT: C, Difficulty: Medium, TOT: 6 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
5. The first step is to identify the motivation for the analysis. The motivation for a project is the why the
analysis is being performed. It is important to understand the reason for the analysis before beginning
the analysis.
The second step is to set an objective. In other words, “What is the goal of the analysis?” This step will
help articulate the goal and specific questions that will be analyzed.
PR
The third step is to develop a strategy. In this step, we determine the data and analysis methods
necessary to achieve the project’s goal.
LO 1.2, BT: K, Difficulty: Easy, TOT: 8 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
O
6. Extracting is the process in which data is retrieved from a source. This could involve downloading an
Excel file or extracting data from a database or a data warehouse.
Transforming the data occurs when data is cleaned, restructured, and/or integrated prior to using it for
FD
analysis.
Loading data is the process of importing transformed data into the software used to perform analyses.
LO 1.2, BT: K, Difficulty: Easy, TOT: 8 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
O
7.
Example Data Analysis Process Stage
C
1. Develop a model to calculate contribution ANS: b. Analyze
margin.
2. Get data from a database. ANS: b. Analyze
3. Upload data into analysis software. ANS:b. Analyze
4. Determine the objective of the analysis. ANS: a. Plan
5. Create a forecast of net income. ANS: b. Analyze
6. Identify the data needed for analysis. ANS: a. Plan
7. Identify relationships within the data. ANS: b. Analyze
8. Create a visualization to show the results of ANS: c. Report
the analyses.
9. Identify sales patterns. ANS: b. Analyze
LO 1.2, BT: C, Difficulty: Medium, TOT: 12 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
1-4
Solution Manual
Data and Analytics in Accounting: An Integrated Approach 1e Ann C.
Dzuranin, Guido Geerts, Margarita Lenk
PR
O
FD
O
C
CHAPTER 1
DATA AND ANALYTICS IN THE ACCOUNTING
PROFESSION
Learning Objectives:
LO 1.1: Summarize how advances in data and technology are impacting accounting professionals.
LO 1.2: Describe the stages of the data analysis process.
LO 1.3: Identify the skills necessary to perform data analysis.
LO 1.4: Explain how to apply a data analytics mindset during the data analysis process.
1-1
,@PROFDOCDIGITALLIBRARIES
ANSWERS TO MULTIPLE CHOICE QUESTIONS
LO 1.2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
1. A Leverage Technology to Develop and Enhance Functional Competencies
LO 1.1, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
7. D
2. C LO 1.2, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
LO 1.1, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
8. C
3. C LO 1.2, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
LO 1.2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
9. A
4. B
PR
LO 1.3, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
LO 1 2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
10.D
5. B LO 1.3, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
LO 1.2, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
Leverage Technology to Develop and Enhance Functional Competencies
11.B
6. C
O
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O
C
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LO 1.3, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
14.A
LO 1.4, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
12.A
LO 1.4, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
15.B
LO 1.4, BT: C, Difficulty: Medium, TOT: 3 min, AACSB: Analytic, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
13.D
LO 1.4, BT: K, Difficulty: Easy, TOT: 2 min, AACSB: Knowledge, AICPA FC:
Leverage Technology to Develop and Enhance Functional Competencies
ANSWERS TO REVIEW QUESTIONS
PR
1. Both the CPA exam and the CMA exam have added data analytic content to their exams. This is in
response to what new professionals need to know as they enter the accounting profession. The CPA
Exam Evolution is a strong indication of how the accounting profession is changing. The new CPA exam
will have more technology and data analytics questions in the Core exam, as well as the Discipline
exams.
O
LO 1.1, BT: K, Difficulty: Easy, TOT: 6 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
2.
FD
Changes Accounting Practice Area
1. Ability to use entire data sets to identify ANS: a. Auditing, c. Managerial accounting
exceptions, anomalies, and outliers
2. Automation of manual processes ANS: a., b., c., d. (All areas)
3. Automation of journal entries ANS: b. Financial accounting
O
4. Risk identification ANS:. a. Auditing, c. Managerial accounting
5. Forecasting ANS: b. Financial accounting, c. Managerial
accounting
C
6. Compliance reporting ANS: d. Tax accounting
LO 1.1, BT: C, Difficulty: Medium, TOT: 8 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
3. Data are raw facts and figures. Technology helps covert that data into information. Information is the
knowledge gained from analyzing the data.
LO 1.1, BT: C, Difficulty: Medium, TOT: 6 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
4.
Purpose Method
1. Understanding what is happening currently ANS: a. Descriptive
and what has happened in the past.
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, @PROFDOCDIGITALLIBRARIES
2. Understanding what should happen to meet ANS: d. Prescriptive
our goals and objectives.
3. Understanding what might happen in the ANS: c. Prescriptive
future.
4. Understanding why something happened. ANS: b. Diagnostic
LO 1.2, BT: C, Difficulty: Medium, TOT: 6 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
5. The first step is to identify the motivation for the analysis. The motivation for a project is the why the
analysis is being performed. It is important to understand the reason for the analysis before beginning
the analysis.
The second step is to set an objective. In other words, “What is the goal of the analysis?” This step will
help articulate the goal and specific questions that will be analyzed.
PR
The third step is to develop a strategy. In this step, we determine the data and analysis methods
necessary to achieve the project’s goal.
LO 1.2, BT: K, Difficulty: Easy, TOT: 8 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
O
6. Extracting is the process in which data is retrieved from a source. This could involve downloading an
Excel file or extracting data from a database or a data warehouse.
Transforming the data occurs when data is cleaned, restructured, and/or integrated prior to using it for
FD
analysis.
Loading data is the process of importing transformed data into the software used to perform analyses.
LO 1.2, BT: K, Difficulty: Easy, TOT: 8 min, AACSB: Knowledge, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
O
7.
Example Data Analysis Process Stage
C
1. Develop a model to calculate contribution ANS: b. Analyze
margin.
2. Get data from a database. ANS: b. Analyze
3. Upload data into analysis software. ANS:b. Analyze
4. Determine the objective of the analysis. ANS: a. Plan
5. Create a forecast of net income. ANS: b. Analyze
6. Identify the data needed for analysis. ANS: a. Plan
7. Identify relationships within the data. ANS: b. Analyze
8. Create a visualization to show the results of ANS: c. Report
the analyses.
9. Identify sales patterns. ANS: b. Analyze
LO 1.2, BT: C, Difficulty: Medium, TOT: 12 min, AACSB: Analytic, AICPA FC: Leverage Technology to Develop and Enhance Functional Competencies
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