ADA - Audit Data Analytics Descriptive Analytical Techniques Questions and Answers

Question 1

An auditor is analyzing a large dataset of journal entries to identify unusual patterns.
Which of the following is a classic descriptive analytical technique used to detect anomalies by examining the frequency distribution of leading digits in numerical data?

Accepted Answer

Benford's Law

Answer

Regression Analysis

Answer

Clustering Analysis

Answer

Time Series Forecasting

Question 2

During the risk assessment phase of an audit, an auditor calculates the mean, median, standard deviation, and range for employee travel and expense claims. These calculations are examples of which type of descriptive analytical technique?

Accepted Answer

Statistical Summaries

Answer

Trend Analysis

Answer

Data Profiling

Answer

Segmentation

Question 3

Which of the following questions is best answered using descriptive analytical techniques?

Accepted Answer

What is the total amount of accounts receivable over 90 days past due?

Answer

Why did sales in the Northeast region decline last quarter?

Answer

What is the probability of a specific customer defaulting on their loan next year?

Answer

What is the optimal level of inventory to minimize holding costs?

Question 4

An auditor is conducting a review of a company's procurement process. They use data analytics to examine all purchase transactions for the past year and generate a report that groups purchases by vendor, highlighting the total amount spent per vendor. This process is an example of:

Accepted Answer

Data Aggregation and Summarization

Answer

Predictive Modeling

Answer

Diagnostic Analysis

Answer

Prescriptive Analytics

Question 5

When performing descriptive analytics, an auditor might use measures of central tendency and measures of dispersion. Which of the following are both measures of dispersion?

Accepted Answer

Range and Standard Deviation

Answer

Mean and Median

Answer

Mode and Variance

Answer

Mean and Standard Deviation

Question 6

An audit team is analyzing quarterly revenue figures for the past five years to identify any unusual fluctuations or patterns. They plot the revenue for each quarter on a line chart to visualize the changes over time. This technique is best described as:

Accepted Answer

Trend Analysis

Answer

Anomaly Detection

Answer

Regression Analysis

Answer

Correlation Analysis