Introduction to Data Analytics for Accounting 1st Edition by Vernon Richardson Solution manual

3. (LO 1-3) Accountants understand the tradeoffs between relevant data and
reliable data (such as that data which might exhibit more representational
faithfulness).
Richardson, Terrell, Teeter – Introduction to Data Analytics for Accounting, 1 st Edition 
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Accountants also understand the tradeoffs between unstructured and structured
data, data internal or external to the company, and even the potential cost of
acquiring and processing the data as compared to the potential value provided
by use of the data.
4. (LO 1-3) Mastering the data includes accessing, cleaning, and transforming the
data needed to prepare the data for analysis.
5. (LO 1-3) Data analytics might be viewed as successively peeling the layer of an
onion. By peeling the first layer of the onion, you now are able to see the next
layer and evaluate it and remove it to get to the third layer, etc. Often times, the
AMPS model must be performed multiple times, refining the question (Ask the
Question), possibly considering different types of data (Master the Data),
performing additional analysis (Perform the Analysis) and retelling the story in
each iteration (Sharing the Story) before the issue/problem/challenge can be
finally addressed with some confidence.
6. (LO 1-3) Descriptive analysis reports what happened. Generally, evaluating the
revenues and earnings performance starts with descriptive analysis and
continues with diagnostic analysis to understand “Why it happened”.
Brief Exercises
1. (LO1-1, LO1-2): Match the data analytics term to its data analytics definition:
Data Analytics Term  Data Analytics Definition
Bloom’s Taxonomy An explanation of hierarchical forms of
thinking and learning skills in education
data analytics  The process of evaluating data with the
purpose of drawing conclusions to
address all types of questions, including
accounting questions.
dynamic  Characterized by constant update,
change, or activity.
information overload  Access or exposure to too much
information to be able to process.
static  Characterized by the lack of constant
update, change, or activity.
Richardson, Terrell, Teeter – Introduction to Data Analytics for Accounting, 1 st Edition 
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2. (LO1-3): Match the components of the AMPS model to data analytics tasks.
Data Analytics Task  AMPS Model Component (i.e., Ask the
Question, Master the Data, Perform the
Analysis, Share the Story)
Dashboard providing daily sales in the
Pacific Northwest.
Share the Story
Checking the data for errors and missing
data items before the data is analyzed.
Master the Data
Vendor trying to decide which product
they should sell at Walmart.
Ask the Question
Using a histogram to evaluate whether
journal entries were entered by an
unauthorized employee.
Perform the Analysis
Deciding the best way to communicate
the data analysis findings to
management.
Share the Story
3. (LO1-3): Match the components of the AMPS model to data analytics tasks.
Data Analytics Task  AMPS Model Component (i.e., Ask the
Question, Master the Data, Perform the
Analysis, Share the Story)
Deciding which question to ask that might
help management best assess strategy.
Ask the Question
Running a regression analysis to evaluate
the impact of advertising.
Perform the Analysis
Extracting data from the financial
reporting system and prep for use in a
pivot table.
Master the Data
Publishing financial statements store-by-
store.
Share the Story
Analyzing how profits will change if
gasoline prices go up in the coming year.
Perform the Analysis
Problems
Richardson, Terrell, Teeter – Introduction to Data Analytics for Accounting, 1 st Edition – Chapter 1
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1. (LO1-2): Match the components of the AMPS model to data analytics tasks.
Component of Bloom’s
Taxonomy
Bloom’s Taxonomy
Component (Remember,
Understand, Apply,
Analyze, Evaluate, Create)
Who has the
advantage in this
component? (Human
or Machine)
Judging the value of
information or ideas.
Evaluate  Human
Recognizing and recalling
facts.
Remember  Machine
Combining parts to make a
new whole.
Create  Human
Applying the facts, rules,
concepts and ideas.
Apply  Machine
Breaking down information
into component parts.
Analyze  Human
Comprehending what the