Data Analytics Techniques & Tools Flashcards

An auditor applies Benford's Law to a vendor invoice population. Which first digit should appear most frequently in a naturally occurring dataset?

Answer: 1

Benford's Law predicts the digit 1 appears as the leading digit about 30.1% of the time.

Which population is LEAST suitable for Benford's Law first-digit testing?

Answer: Assigned employee ID numbers

Assigned or sequential identifiers are not naturally occurring magnitudes, so Benford's distribution does not apply.

A gap test on sequentially numbered sales invoices is primarily designed to detect what?

Answer: Missing or unrecorded documents

Gap testing identifies breaks in a numeric sequence that may indicate missing, voided, or unrecorded documents.

Before analyzing a client-provided GL extract, an auditor compares the total debits and record count to the client's trial balance. What is this procedure called?

Answer: Data reconciliation to verify completeness

Reconciling control totals and record counts to an independent source confirms the extract is complete and accurate.

Which join type returns all records from the vendor master file plus matching records from the payments file, leaving unmatched vendors with blank payment fields?

Answer: Left outer join

A left outer join keeps every record from the left (primary) table and only matching records from the right table.

An auditor uses fuzzy matching between the employee master file and vendor master file. What risk is this test most likely addressing?

Answer: Fictitious vendors linked to employees

Fuzzy matching of names, addresses, or bank accounts can reveal employees who set up shell vendors.

In data analytics, what does a z-score of 3.5 for a transaction amount indicate?

Answer: The amount is 3.5 standard deviations from the mean

A z-score measures how many standard deviations a value lies from the population mean, so 3.5 flags a potential outlier.