‫محاولة تلخيص المنهج لاليساي‬

FAR

1- Limitation of Balance Sheet

A- Balance sheet show financial position for the company at point in time that may vary few
days later
B- Recording of fixed assets at historical costs
C- preparation require human judgment
D- B.S omits many items that have value like intellectual capital

2- Limitation of income statement

A- Not all items reported in income statement some items reported at OCI
B- I.S Report accrual basis so I.S may show money in the company but actually no
C- preparation require human judgment

3- Limitation of Retained Earnings Statement

A- Reports at accrual basis of accounting

B- prepare depends on specific point in time that numbers may vary few days later

4- Limitation of statement of cash flow

A- Cash Flow statement not sufficient for forecasting profitability of the firm because it includes
only cash items
B- it is not represent the true liquid position of the firm
C- information can be manipulated by management of the firm

5- Five steps for recognize revenue

A- Identify the contract with the customer

B- Identify the Performance obligation in the contract
C- Determine the transaction price
D- Allocate transaction price to performance obligation in the contract
E- Recognize revenue when performance obligation is satisfied.

6- Condition for classification of lease as a finance lease for the lessee

A- the lease transfers the ownership of the leased asset to the lessee at the end of the contract
B- the lease include an option of purchase the assets at the end of the lease
C- the lease is more than 75% of the lease life
D- the present value of the sum of the lease payments and any guarantee more than 90% of the
fair value of leased assets.
E- the leased assets has no alternative use.
 7- difinition of integrated reporting, integrated thinking and integrated report.

A- Integrated reporting is a process depends on integrated thinking that result in periodic

integrated report
B- integrated thinking is a process of decision making, management and reporting it is based on
connectivity among organization factors that affect value creation over time.
C- The product of integrated reporting and integrated thinking is integrated report that
communicate how strategy, performance, and governance lead to value creation over short,
medium and long term and provide financial providers information about how the entity create
value over time.

8- six capitals.

A- Financial capital is the liquid capital available

B- Manufacturing capital is physical capital available for production of goods or provide service
C- intellectual capital intangible knowledge of organization (software-patent-copyrights-license)
D- human capital employees competencies, abilities and experience
E- social and relationship capital relationship of the company with environment it operates
F- natural capital renewable and nonrenewable environmental resources(land-water-
ecosystem)

9- guidance principles for integerated report

A- strategic focus and future orientation

B- connectivity of information
C- stakeholder relationship
D- materiality
E- conciseness
F- reliability and completeness
G- consistency and comparability.

10- content elements of integrated report

A- organizational overview and external environment

B- governance
C- business model
D- risk and opportunities
E- strategy and resource allocation
F- performance
G- outlook
H- basic of preparation and presentation
I- general reporting guidance.
 11- challenges of adoption of integrated reporting

A- Materiality
B- Data quality
C- assurance
D- lack of standards
E- tone at the top
The benefits of IR include
a) Linking financial and nonfinancial information, which provides more clarity about
the value-creation process
b) Better decision making and resource allocation- improve governance-better internal control

COST

12- cost classifications

A- Non-controllable cost that cost that a particular manager does not have authority to change
B- Committed cost arise from holding property, plant and equipment like insurance real estate
tax lease payments and depreciation they are long term and cannot be reduced by lowering
short term production
C- discretionary cost represent uncertainty in the degree of causation between level of output
and the quantity of resources consumed costs that outlay periodic annually like advertising R&D
maintenance cost.
D- Sunk cost that costs that already paid or committed to incur.
E- Relevant cost future cost that vary with action taken

13- steps in ABC system

A- Activity analysis (unit level-batch level-product sustaining-facility sustaining activity)

B- Assign resource drivers to resource costs
C- Allocate resource costs to activity cost pools
D- Allocate activity cost pools to final cost object

14- Advantages and disadvantages of ABC

Advantages
A- Better decision making
B- Analysis provide information to value and non-value adding activities that produce efficiency
C- Improve scheduling production through analysis and now that best way to produce(moving
components-waiting for the next operation step-inspecting output-storing inventory)
D- the most benefit when company produce wide variety of products and high fixed cost

Disadvantages
A- Increase time and efforts to make accounting system that capture resources cost, drivers and
cost pools
B- Initial cost are high
C- No advantage if company produce one product
D- May not conform with GAAP

15- Life cycle costing

Stages research and development-introduction-growth-maturity-decline

upstream cost (R&D-product design) downstream cost(manufacturing-marketing and
distribution-customer service)

16- advantages and disadvantages of absorption and variable costing

Advantage of variable costing

A- change in operating income with sales clear than absorption
B- By not including fixed costs in the calculation of cost to produce, companies are able to make
better and more informed decisions about profitability and product mix
C- Variance analysis of fixed overhead costs is less confusing than it is with absorption costing.
D- It is easier to determine and forecast the contribution to fixed costs made by a division or
product, which can help determine whether the product or division should be discontinued
Disadvantages of variable costing
A- it is not acceptable for external financial reporting under generally accepted accounting
principles. Variable costing is also not acceptable for income tax reporting.
B- Because only variable manufacturing costs are charged to inventory, variable costing requires
separating all manufacturing overhead costs into their fixed and variable components, and the
distinction between fixed and variable components may be arbitrary
C- To prepare an income statement based on variable costing, it is also necessary to separate
the selling and administrative costs into their fixed and variable components, and that may be
arbitrary
D- Fixed costs may be important in decision making
Advantages of absorption costing
A- Absorption costing provides matching of costs and benefits
B- complies with GAAP
C- complies with tax
Disadvantages of absorption costing
A- Because of the way that fixed costs are allocated to units under absorption costing, managers
have an opportunity to manipulate reported operating income by overproducing in order to
keep some of the fixed costs on the balance sheet in inventory. Thus, the effect of this
manipulation is to move operating income from a future period to the current period. It also
creates a buildup of inventories that is not consistent with a profitable operation.
B- When the number of units sold is greater than the number of units produced, inventory
decreases. Operating income under absorption costing will be lower than it would be under
variable costing, because some prior period fixed manufacturing costs will be expensed under
absorption costing along with the current period’s fixed manufacturing costs.
 17- Advantages of JIT
Lean manufacturing expands the concept of JIT

A- less money invested in idle assets-reduction of storage space-lower inventory taxes-pilferage

and obsolescence risk
B- reaction of global competition and rapid technological progress that make shorter product
life cycle and greater consumer demand
C- prevent quality problems so zero machine breakdown so zero defects is ultimate goal
D- lean manufacturing (value-value stream-flow and pull- empowerment-perfection)
E- inventory level minimized counting, handling and storing viewed as non-value added
F- decrease number of supplier and increase number of deliveries depend on reliable vendors
G- eliminate certain internal control and manufacturing lead time is reduced
H- production setup cost and time per lot reduced but total setup cost not changed

18- Benefits of material requirement planning MRP

A- Reduce idle time because of efficient planning for production

B- lower setup costs
C- lower inventory carrying cost
D- Increased flexibility in response to market change

19- Advantages and disadvantages of ERP system

Advantages
A- supply chain management system that integrates all parts from supplier to final customer
B- lower inventory costs
C- reduce labor cost and greater productivity
D- enhanced decision making
E- elimination of data redundancy and centralization of data and data integrity
F- avoidance of costs for other means for IT
G- increased customer satisfaction
H- more rapid and flexible response to changes
I- standardization of decision making process

Disadvantages
A- losses from unsuccessful implementation
B- purchasing hardware-software-service
C- data conversion from old system to new system is difficult
D- training
E- customization is difficult
F- software maintenance and upgrades-salaries of implementation employees

20- Steps in implementing ERP system

First step do strategic planning and organize a project team
Second step choose ERP software and consulting firm
Third step pre-implementation (reengineering-customization software)
Forth step implementation (going live)
Last step training during and after implementation and monitoring
challenges ERP it cost millions and poor implementation may cause project to fail

21- Advantages and Disadvantages of outsourcing

Advantage
A- reliable service
B- avoidance of obsolescence risk
C- access to technology
D- risk sharing

Disadvantages
A- dependence on outside party
B- loss of control over necessary functions
C- quality of service
D- security issues
E- language barriers

22- Steps in theory of constrains TOC

system to improve human thinking about problems

A- Identify the constrain

B- Determine the most profitable product mix given the constrain
C- Maximize the flow through the constrain
D- Increase capacity at the constrain (short term)
E- Redesign the manufacturing process (long term)

23- Steps in capacity expansion

A- the firm must identify their size, type, vertical integration and competitor response
B- forecast demand, input cost and technological development
C- analysis of competitor to determine when each will expand
D- using information the company predict capacity
E- testing of inconsistencies

24- Steps in value chain analysis

value chain is how costs and customer values accumulated along chain of activities
value adding activities adds value to the customer
non-value adding activities does not add value to product or customer
Primary activities (R&D-production design-manufacturing-marketing and distribution-
customer service)
supportive activities (HR-inventory management-plant maintenance-IT-contract management)

Value chain analysis strategic analysis tool allows firm focus on activities that are consistent
with overall strategy
A- identify the firm value creating activities
B- determine how each value creating activity can produce competitive advantage
(cost reduction-differentiation-)
C- identify the way in which value adding activities provide value to customer
D- identify activities that candidate for cost reduction
E- identify value adding way in which activities that adds value can be linked
f- management accountant collaborate with engineering, production marketing, distribution and
customer service to identify strengths, weaknesses, opportunities, and threats in the value chain
analysis results

25- Steps in benchmarking

is ongoing processes contains qualitative and quantitative measurement of the
difference between the company performance and best in the world and they not
need to be competitor

A- select and prioritize benchmarking (determine the reason for existence and understand
critical success factors)
B- organize benchmarking team
C- the team investigate and document internal processes(development of measures for internal
processes)
D- researching and identifying best in class performance(difficult step)
E- identifying performance gaps
F- process improvement find and implement way to improve performance
the firm can identify strengths and weaknesses through benchmarking

26- Cost of Quality

Conformance costs
A- prevention cost try to prevent defective products (preventive maintenance-employee
training-review of equipment design-evaluation of supplier-quality training to employee
B- appraisal cost include activities that statistical quality program (inspection-testing)

Nonconformance costs
A- internal failure costs occur when defective products are detected before shipment
(scrap-rework-tooling changes-downtime-redesign-re-inspecting-retesting-expediting of
operation after delays-lost learning opportunities-correcting problems)
 B- External failure costs lost profit and costs after the customer receive the product
(customer service complains-rejection-returns-repairs-warranty obligations-product liability
claims-customer losses)

BUDGET

27- Benefits and limitations of regression analysis

Benefits
A- A given data set generates specific results. The results can be used to draw conclusions and
make predictions.
B- Regression analysis is an important tool for drawing insights, making recommendations, and
decision-making.
Limitations
A- To use regression analysis, historical data are required. If historical data are not available,
regression analysis cannot be used.
B- Even when historical data are available, the use of historical data is questionable for making
predictions if a significant change has taken place in the conditions surrounding that data
C- The usefulness of the data generated by regression analysis depends on the choice of
independent variable(s). If the choice of independent variable(s) is inappropriate, the results can
be misleading
D- The statistical relationships that can be developed using regression analysis may be valid only
for the range of data in the sample.

28- Benefits and limitations of learning curve

Benefits
A- Learning curves can be used in the development of production and labor budgets when
changes such as new products are planned.
B-In calculating the cost of a contract, learning curve analysis can ensure that the cost estimates
are accurate over the life of the contract, leading to better, more competitive bidding on
projects.
C- Make or buy decisions
D- Recognizing that higher costs will occur in the early phase of the product life cycle allows
more effective evaluation of managers.
E-learning causes standard costs to decrease over time.
Limitations
A- Learning curve analysis is appropriate only for labor-intensive operations involving repetitive
tasks
B- The learning rate is assumed to be constant. In real life, the decline in labor time might not be
constant
C- may not be able to accurately forecast the amount of improvement that may result from
learning that will take place.
D- The company may or may not be able to actually realize efficiencies from learning.
 29- Steps in strategic management process
strategic management is the set of overall objectives for entity and guides the process
through achieving those objectives (upper management responsibility)
strategic planning is the design and implementation of specific steps and processes to
reach overall objectives the both closely linked

A- BOD determine mission and vision statement

B- Organization perform situational analysis SWOT (strengths-weaknesses-opportunities-
threats)
C- base on situational analysis management describes strategies how the mission will be
achieved
D- strategic plans are implemented through implementation of each component plants
E- strategic control and feedback to detect problems and take corrective actions

30- Porter`s five competitive forces

model developed for analysis of competition that include five forces

A- rivalry among existing firms(stage of industry life cycle-fixed cost high-capacity expansion)
B- threats of entry market
C- threat of substitutes(substitute relative price-customer intent-cost of switching)
D- threat of buyer`s bargaining power
E- threat of supplier bargaining power

31- General strategic models (competitive analysis strategies)

Broad competitive scope

A- cost leadership lower cost broad competitive scope
B- differentiation unique product through broad competitive scope

Narrow competitive scope

A- cost focus lower cost though narrow competitive scope(regional-smaller market)
B- focused differentiation unique product narrow scope(regional-smaller market)

Operational strategies

A- Cost strategy low-cost producer company and undifferentiated

B- quality strategy seek to high product or process quality
C- delivery strategy product delivered rapidly and on time
D- flexible strategy can move from product line to another product line
E- service strategy provide good service after sale of the product
 32- Growth-share matrix

Dogs (low relative market share-low market growth rate) net cash flow modest

Question mark (low relative market share-high growth rate) poor cash and need more
investment to increase relative market share
Cash cows (high relative market share-low growth rate) strong competition and cash generator
Stars (high relative market share-high growth rate) strong competition in high growth markets
net cash flow is modest because it require more expenses for R&D

Strategy for investment portfolio

Hold strategy for strong cash cows

build strategy question mark to be star
harvest strategy weak cash cows and possible question mark and dogs
divest strategy used for investment that reduce profitability of the company

33- Characteristics that define successful budgeting processes

A- Involving top management

B- Encouraging a participative or bottom-up approach which allows employees throughout the
organization to have input on the budget-setting process
C- Promoting coordination between functional areas of the organization
D- Providing communication and feedback throughout the process
E- Using different budgets for planning than for performance evaluations to help alleviate some
of the behavioral issues with the budgeting process
F- Using budgeting to motivate employees
G- Setting clear goals and expectations at the beginning of a process

34- Reduce the incidence and effect of budgetary slack

A- Using budgets for planning, but not for evaluation

B- Giving rewards for accurate, as well as high budgets
C- Using additional measures for evaluation in addition to budget success
D- Having managers learn more about subordinates’ day-to-day work
E- Using external benchmark performance measures

35- Problems in implementation of balance scorecard

(financial-customer satisfaction-internal business processes-learning and growth)

A- using many measures confuse with important KPIs

B- failing to evaluate personnel on nonfinancial measures
C- not understanding subjective measures
D- trying to achieve all improvements at all areas at the same time
 36- Roles of the budget

Budget is a written plan for the future that try to evaluate assumptions and objectives
identified in the budgeting process
A- budget as a planning tool
B- budget as a control tool(cost help control cost by setting cost guidance
manager will refuse to incur not important cost if he know it will be compared to budget
C- budget as a motivational tool(budget help employee to do good job if they help for preparing
the budget
D- budget as a communication tool(help to tell employees what goal firm need to achieve)
E- budget promotes goal congruence(every one working for the same goal)

37- Advantages and disadvantages of top-down and bottom-up budgeting process

Advantages of top down

A- ensure consistency across all area
B- less complex-less time-less money for preparation
C- reduce probability of budgetary slack
Disadvantages of top down
A- may not promote commitment
B- less acceptance among employees

Advantages of bottom up
A- acceptance at all level
B- make employees link performance with reward or penalties
C- provide more information for budgeting through participation
Disadvantages
A- high cost-more time-more complex
B- employees may work for their interest of their divisions
C- creation of budgetary slacks

38- Criticism of budgeting process

A- lower level manager think that top management cut costs and increase targets
B- budget usually build for year, quarter or monthly so need to wait to make correction
C- some manager wait until the end of the period to compare budget to actual results
D- some manager refuse revision of the budget
 VARIANCE

39- Benefits and limitations of flexible budget

Benefits
A- As a planning tool, the flexible budget allows management to estimate income at more than
one level of output.
B- As an evaluation tool, actual results are compared with standard costs for actual output. This
provides for a fairer comparison and allows for variance computations to better assess
performance.
C- Make better use of historical budget information to improve future planning
D- As an evaluation tool, comparing actual results to the flexible budget will not hide poor
performance.
Limitations
A- Flexible budgeting needs to be used with a standard costing system. The two go together,
and one is meaningless without the other
B- If sales decline below the planned level, the decline does need to be addressed and a flexible
budget will not be useful for pinpointing a decline in sales below what was planned
C- we must wait until actual results appear to prepare flexible budget
D- it need more time for preparation

40- Types of responsibility centers

Cost center is responsible for cost only (maintenance department) Cost and revenue measure with
Revenue center is responsible for revenue only (sales department) variance and nonfinancial measures
Profit center is responsible for cost and revenue (retail store department responsible for cost
and revenue)
Investment center responsible for revenue expense and invested capital(branch office)

41- Return on investment ROI

ROI is the relationship between income and investment in assets to generate income

ROI =

Benefits of ROI
A- improve projects through analyzing data collected and know how to improve project
B- secure funding through forecasting of positive ROI about money will invest
C- comparative analysis compare between alternative investment to determine the best
D- discontinue ineffective product or operation that non-value added
Limitation of ROI
A- investment center reject projects with ROI more than the center but lower than the
investment center.
B- ROI measures return as a percentage rather than as a monetary amount.
 42- Residual income
is a variation of ROI that measure performance in dollar amount than percentage

RI = income of business unit - (assets of business unit x required rate of return)

Benefits
A- When RI is used in preference to ROI, a project that would be beneficial to the company is
more likely to be selected
B- promote goal congruence
Limitations
A- RI is often used together with another evaluation measure to make best evaluation
B- It is difficult to compare the performance of units of different sizes
C- RI has the same issues as ROI with respect to distortion caused by the accounting policies
selected by the company.

43- Factors affecting comparability of performance measures

A- Accounting policies-different in tax system-availability of resources

in multinational companies affect by the following
tariffs – import quotas – inflation risk – exchange rate risk – political risk.

44- Transfer pricing

is the amount charged by one segment to another for goods or services provided

Methods used
A- variable costing used variable cost as a transfer price if there is unused capacity
Advantages used excess capacity motivate buyer`s division to solve excess capacity problem
Dis advantages no incentive for the seller for production and reduction of costs

B- Full (absorption) costing charge full cost for the buying department
Advantages insure that selling will not incur loss and providing more incentive for buyer to
purchase internally not from market
Disadvantages no motivation for seller to control production cost

C- Market price use market price as a transfer price used when the company operates at full
capacity
Advantages it is useful when the company operates at full capacity-goal congruence
Disadvantages it is not beneficial when the company has excess capacity and if the company use
price lower than market it may motivate both divisions

D- Negotiation price the best and it is the price accepted by two divisions used in most freely
divisions
Advantages it is best when no market price exist
promote goal congruence
accepted by both parties
 45- Factors affecting the choice of transfer pricing poicy

A- Goal congruence factor

B- segment performance factor the seller should recover all cost + opportunity cost and should
not lose money for selling internally because this will effect performance measure
C- negotiation factor
D- capacity factors if division have capacity it can give another if not have he must not give
E- tax factor

INTERNAL CONTROL

46- Corporate governance

Corporate governance includes all the means by which businesses are directed and controlled,
including the rules, regulations, processes, customs, policies, procedures, institutions and laws
that affect the way the business is administered.

Benefits of good governance

A- Promoting appropriate ethics and values within the organization
B- Ensuring effective organizational performance, management, and accountability
C- Communicating risk and control information to appropriate areas of the organization
D- Coordinating the activities of and communicating information between and among the board,
external and internal auditors, and management

47- Responsibilities of the Board of Directors

A-Selecting and overseeing management

B- oversight activities and set in the corporate bylaws.
C- strategic planning, including setting corporate strategy, overall direction, and vision
D- ensure that the corporation operating in compliance with all applicable laws and regulations
E- They must be willing to ask the tough questions and to question management’s activities

48- Responsibilities of the Audit Committee

A- The audit committee is responsible for selecting and nominating the external auditor,
approving audit fees, supervising the external auditor, overseeing auditor qualifications and
independence, discussing with the auditors matters required under generally accepted auditing
standards, and reviewing the audit scope, plan, and results
B- prepare an audit committee report as required by the SEC
C- The audit committee is to review the annual and quarterly financial statements and the
MD&A (Management Discussion and Analysis) in the company’s annual report filed with the SEC
and discuss them with management and the independent auditors
D- The audit committee is to review with the independent auditor any audit problems
E- They oversee the internal audit function and monitor internal control systems for compliance
with legal and regulatory requirements.

49- Responsibilities of the Chief Executive Officer (CEO)

A- The responsibilities of the CEO are determined by the corporation’s board of directors. A
CEO’s responsibilities and authority can be extensive, or they can be very limited, depending on
how much authority and responsibility the board of directors delegates to the CEO
B- establish and maintaining system of internal control
C- carry out day-to-day operations
D- establish tone at the top for the company

50- Objective of internal control

Thus, internal control is a process that is carried out (effected) by an entity’s board of
directors, management, and other personnel that is designed to provide reasonable assurance
that the company’s objectives relating to operations, reporting, and compliance will be
achieved

A- Operations objectives relate to the effectiveness and efficiency of operations

B- Reporting objectives pertain to internal and external financial and non-financial reporting
C- Compliance objectives relate to the organization’s compliance with applicable laws and
regulations

51- Components of internal control

1- Control environment
A- The control environment includes the standards, processes, and structures that provide the
foundation for carrying out internal control the board of directors and senior management are
responsible for establishing the “tone at the top,”
B- a commitment to integrity and ethical values
C- board of directors demonstrates independence from management and exercises oversight
D- management establishes structures, reporting lines, and appropriate authorities and
responsibilities (The board of directors delegates authority and assigns responsibility to senior
management. Senior management delegates authority and assigns responsibility at the entity
level and to its subunits)
E- commitment to attract, develop, and retain competent individuals in alignment with
objectives
F- holds individuals accountable for their internal control responsibilities
2- Risk assessment
Risk assessment is the process of identifying, analyzing, and managing the risks that have the
potential to prevent the organization from achieving its objectives
 Three types of risk

Inherent risk It is risk that is natural, assuming no controls are in place

Detection risk is the risk that a material misstatement in an account balance or class of
transactions that could result in a material weakness for the company will not be detected
Control risk is the risk that an internal control will not prevent or detect a material
misstatement in a timely manner

Steps in risk assessment

Risk identification-Risk Analysis-Risk responses that include (acceptance-avoidance-reduction-

sharing) in assessing the risks to the achievement of its objectives, management of the
organization should consider the potential for fraud

3- Control activities
A- selects and develops control activities that contribute to reducing to acceptable levels the
identified risks
B- The control activities include a variety of controls including both manual and automated and
preventive and detective controls
Preventive controls are controls designed to avoid an unwanted event such as an error or fraud
before it occurs
Detective controls are controls designed to discover an unwanted event after it has occurred
but before the ultimate objective has occurred
C- Segregation of duties

4- Information and communication

A- obtain or generate and use relevant, quality information to support the functioning of
internal control
B- internally communicate information including objectives and responsibilities for internal
control, necessary to support the functioning of internal control
C- communicate with external parties regarding matters affecting the functioning of internal
control Relevant and timely information needs to be communicated to external parties including
shareholders, partners, owners, regulators, customers, financial analysts, and other external
parties

5- Monitoring activities
A- selects, develops, and performs ongoing evaluations, separate evaluations, or some
combination of both
B- Internal control deficiencies are evaluated and communicated for corrective action

52- Four functions should be segregated

Authorization-Recordkeeping-Custody-Reconciliation
 Notes about transaction cycles

A- Inventory Control personnel perform physical inventory counts. Accounting Department

personnel #1 reconciles physical inventory counts to inventory on hand records. Accounting
Department personnel #2 adjusts inventory on hand records to the physical inventory count and
Accounting Department personnel #3 prepares the journal entry to adjust inventory in the
general ledger to the inventory on hand records
B- Treasurer’s Office has custody of blank check stock and prepares checks for suppliers the
Treasurer’s Office also has custody of the signature stamp used on checks
C- Accounting Department personnel reconcile vendor accounts payable records to accounts
payable according to the general ledger
D- Warehouse personnel have custody of inventory until sold. Inventory is released to the
Shipping department for shipment upon receipt of authorization in the form of a packing slip
and evidence that an invoice has been prepared (or evidence of payment already received)
E- Accounting Department personnel reconcile the accounts receivable journal to accounts
receivable according to the general ledger
F- Cashier, a member of the Treasurer’s Office, receives cash payments from customers. two
Cashiers’ Department employees should receive the customer payments, create a listing of
receipts, and prepare the bank deposit
G- Accounting Department personnel reconcile cash according to the general ledger to the bank
statement
H- Record keeping: Payroll Department personnel #1 adds new employees to the payroll and
deletes terminated employees. Payroll Department personnel #2 makes changes to employee
information and deductions, calculates wages payable and paycheck deductions, and prepares
the payroll register summarizing wages and deductions to be used in compiling the journal entry
to record the payroll and to prepare payroll tax returns. The Accounting Department prepares
the journal entry
I- The Treasurer’s Office has custody of blank check stock used for payroll (if checks are used)
and supervises the preparation of the checks. If checks are not used, the Treasurer’s Office
supervises the transmission of the direct deposit amounts. If checks are used, the Treasurer’s
Office also has custody of the signature stamp used on them and the personnel in the Payroll
Department who calculate the wages and those who have authority to modify the employee
master files are different people
G- Warehouse personnel control physical access to inventory. Inventory Control personnel
perform physical inventory counts

53- Forign corrupt practice act (FCPA)

A- Anti-Bribery Provisions apply to all companies, regardless of whether they are publicly traded
or privately held.it is illegal for any company or anyone acting on behalf of a company to bribe
any foreign official to obtain or retain business
B- Internal Control Provision The fundamental premise of the internal control requirements of
the FCPA is that effective internal control acts as a deterrent to illegal payments
C- Required to maintain books, records, and accounts that accurately and fairly reflect
transactions and to develop and maintain a system of internal accounting control
D- a written code of ethics should be established and revised by internal auditor

54- Public Company Accounting Oversight Board (PCAOB) responsibility

A- Registering public accounting firms that audit public companies

B- Establishing auditing and related attestation, quality control, ethics, independence, and other
standards relating to the preparation of audit reports for securities issuers
C- Conducting inspections of registered public accounting firms, annually for firms that regularly
provide audit reports for more than 100 issuers and at least every three years for those that
regularly provide audit reports for 100 or fewer issuers.
D- Conducting investigations and disciplinary proceedings and imposing appropriate sanctions
for violations of any provision of the Sarbanes-Oxley Act

55- Sarbanes-oxley act

Section 201: Services outside the Scope and Practice of Auditors (Bookkeeping services-
Financial information systems design and implementation-Actuarial services-Internal audit)
Section 203: Audit Partner Rotation audit partner must rotate off a particular client’s audit after
five years the person who audit not all the auditing company
Section 204: Auditor Reports to Audit Committees each public accounting firm registered with
the PCAOB that performs an audit for an issuer of publicly traded securities to report the
following in a timely manner to the issuer’s audit committee
Section 302: Corporate Responsibility for Financial Reports financial report filed or submitted
to the SEC in accordance with the Securities Exchange Act of 1934 must include certifications by
the company’s principal executive officer or officers and its principal financial officer or officers.
The certification must indicate the following:
The signing officer has reviewed the report-Based on the signing officer’s knowledge, the report
does not contain any untrue material statement or omit to state any material fact that could
cause the report to be misleading-the report present fairly
The signing officers certify that they
responsible for establishing and maintaining internal controls
have evaluated the effectiveness of the company’s internal controls
Section 404: Management Assessment of Internal Control Over Financial Reporting and the
Independent Auditor’s Attestation to Management’s Assessment of Internal Control Over
Financial Reporting
require management to establish and document internal control procedures and include in the
annual report a report on internal control over financial reporting this report include
statement of management responsibility of internal control-management assessment over the
effectiveness of internal control-identification of the framework used (COSO-COCO)
Section 407: Audit committee financial expert at least one member must be financial expert.
 56- PACOB standards in auditing

A- Integrate financial statement audit with internal control over financial reporting because
internal control affect the financial statement assertion
B- the auditor should use top-down (risk based) approach begin with financial statement level
focusing in entity level controls and then significant accounts.

57- System and Program Development and Change Controls steps

A- Statement of Objectives a written proposal is prepared, including the need for the new
system
B- Investigation and Feasibility Study of Alternative Solutions Needs are identified and
feasibility of alternative solutions are assessed, including the availability of required technology
and resources. A cost-benefit analysis is done
C- Systems Analysis The current system is analyzed to identify its strong and weak points, and
the information needs from the new system, such as reports to be generated, database needs,
and the characteristics of its operation are determined. Inputs, processing requirements, and
output requirements should be defined and documented. All security requirements should be
identified and justified. A structured analysis process should be used
D- Conceptual Design The conceptual design is what the users are expecting the system to be.
Systems analysts work with users to create the design specifications and verify them against
user requirements. System flowcharts and report layouts are developed. The applications,
network, databases, user interfaces, and system interfaces are designed.
E- Physical Design The physical system design involves determining the workflow, what and
where programs and controls are needed, the needed hardware, backups, security measures,
and data communications. Hardware and software selection should identify mandatory and
optional requirements
F- Development and testing the design is implemented into source code Programs are coded
according to the specifications developed in the systems design and make tests
G- System Implementation and Conversion the site is prepared, equipment is acquired and
installed, and conversion procedures, including data conversion, are implemented.
Documentation is completed and users are trained
I- Operations and Maintenance

58- Threats to information security

A-Electronic eavesdropping can occur if computer users are able to observe transmissions
intended for someone else
B- computer virus is a program that alters the way another computer operates Viruses can
damage programs, delete files, or reformat the hard disk
C- A Trojan horse is different from a virus. A very important distinction between Trojan horses
and viruses is that Trojan horses do not replicate themselves
D- A worm is a program that replicates itself from system to system without the use of any host
file The difference between a worm and a virus is that the worm does not require the use of an
infected host file, while the virus does require the spreading of an infected host file

59- Cybercrime

A- Copyright infringement such as the illegal copying of copyrighted material

B- Denial of Service (DOS) attacks in which a website is accessed repeatedly so that other,
legitimate users cannot connect to it
C- Phishing, a high-tech scam that uses spam email to deceive consumers into disclosing their
credit card numbers, bank account information, Social Security numbers, passwords or other
sensitive personal information.
D- Sniffers. A sniffer is a piece of software that grabs all the traffic flowing into and out of a
computer attached to a network
E- Password crackers-Buffer overflow, which sends too much data to the buffer in a computer’s
memory, crashing it or enabling the hacker to gain control over it
F- Dumpster diving is sifting through a company’s trash
G- Social engineering involves deceiving company employees into divulging information such as
passwords, usually through a fraudulent email but it may be through something as simple as a
telephone call

60- Defense against cyber attack

A- Firewall a firewall serves as a barrier between the internal and the external networks and
prevents unauthorized access to the internal network-An organization may also use a proxy
server, which is a computer and software that creates a gateway to and from the Internet
B- anti-sniffers are available to defend against sniffers
C- The best defense against phishing and other scams is in the hands of the recipient.
Recipients need to know not to respond to any email that requests personal or financial
information and not to click on any link given in such an email that could take them to a spoofed
website-antivirus program
D- Encryption converts data into a code and then a key is required to convert the code back to
data
E- Ethical hacking

61- Business continuity planning

Business continuity planning involves defining the risks facing a company in the event of a
disaster, assessing those risks, creating procedures to mitigate those risks, regularly testing
those procedures to ensure that they work as expected, and periodically reviewing the
procedures to make sure that they are up to date
A disaster recovery plan specifies
A- Which employees will participate in disaster recovery and their responsibilities
B- What hardware, software, and facilities will be used
C- The priority of applications that should be processed
Hot site or mirror data center is a backup facility that has a computer system similar to the one
used regularly. The hot site must be fully operational and immediately available, with all
necessary telecommunications hookups for online processing. A hot site also has current, live
data being replicated to it in real time from the live site by automated data communications

cold site is a facility where space, electric power, and heating and air conditioning are available
and processing equipment can be installed, though the equipment and the necessary
telecommunications are not immediately available. If an organization uses a cold site, its
disaster recovery plan must include arrangements to quickly get computer equipment installed
and operational

Warm site is in between a hot site and a cold site. It has the computer equipment and necessary
data and communications links installed, just as a hot site does. However, it does not have live
data. If use of the warm site is required because of a disaster, current data will need to be
restored to it

62- General controls

A- Separation of duties between 1- computer operator, files, equipment, and production

program 2- programmer and system analyst
B- physical controls limit physical access and environmental damage to equipment and
documents it is divided into access controls and environmental controls
1- access controls limit access to authorized persons
guard desk-keypad-magnetic card leader-password and ID numbers-device authorization table-
system access log-encryption-callback-controlled disposal of documents-biometric(fingerprint-
voice recognition-signature)-automatic log off-security personnel
2- Environmental control cooling and heating system fire system
C- logical controls limit access to authorized person and to authorized data to perform his gob
A- authentication controls ensure that the person is the real person accessed to data the most
widely method use of ID and password single sign on successful when high level of maintenance
B- authorization control ensure that person access to data that he need and authorized to use
in his job

63- Application controls

Input controls provide reasonable assurance data submitted for processing are authorized,
accurate, and complete
A- online input controls when data are keyed are input into an input screen
preformatting input data in all necessary fields
edit field check (validity check) prevent incorrect data from entering system
limit reasonableness check appropriate range for data
check digit algorithm like sum of digit 1+3+6
prompting asking questions of the user to ensure data entry
Batch input controls are used when data are processed in batches
management release batch is not processed until management review and approve it
record count record count and match with system
Control total validation routines sum of dollar amount calculated by the user equal to system
Hash total arithmetic sum of numeric field has no meaning

Processing controls provide reasonable assurance that all data submitted for processing are
processed and only approved data are processed
validation match process identifier against master file to determine existence
completeness reject record with missing data
arithmetic controls zero balance checking usually for entries ensure debit and credit=zero
sequence check ensure data processed in logical order number
run-to-run controls check after each stage of processing when it processed in multiple stages
key integrity number that identify the process and we cannot change

Output controls provide assurance that processing are complete and accurate
complete audit trial consists of batch number-time of submission –time of completion-number
of records-total dollar in batch-number of record rejected-total dollar rejected it is submitted to
user for check and correct errors
error listing report all transaction reported by the system

Storage controls
dual write routines store data in two separate physical devices
spooling store data for temporary period for another use like print
validity check-physical control-snapshot-cloud computing

64- Computer assists audit techniques (CAATs)

Auditing around the computer is not appropriate when the system are sophisticated it is
appropriate for simple system
Auditing through the computer it is appropriate for complex systems many types
A- processing test data
B- parallel simulation
C- generalized audit software package
D- data extraction techniques
E- integrated test facility
F- program embedded audit modules
 IT

65- How accounting information system helps the company

A- An organization’s accounting information system (AIS) interacts with every process in the
value chain. The AIS adds value to the organization by providing accurate and timely information
so that all the value chain activities can be performed efficiently and effectively
B- AIS can provide other information that improves management decision-making.
C- For instance: It can store information about the results of previous decisions that can be used
in making future decisions.
C The information provided can assist management in choosing from among alternative actions.
D- A well-designed accounting information system can improve the efficiency and effectiveness
of a company’s supply chain, thus enhancing the company’s profitability

66- Elements of AIS

A- Journal are used to record accounting transactions and then posted to ledger
B- General ledger It maintains the record of all the financial transactions that have taken place
C- Trial balance The transaction details in the general ledger are compiled periodically to
produce a trial balance
D- Chart of accounts The general ledger contains a separate account for each type of
transaction. The list of general ledger accounts used by an organization
E- Master file store permanent information, such as general ledger account numbers and history
or customer account numbers and historical data for each customer transaction file used to
update master file
F- Special journals are used for specific kinds of transactions, and in a computerized system, the
journals are known as modules

67- Database

A database is a collection of related data files, combined in one location to eliminate

redundancy, that can be used by different application programs and accessed by multiple
users.
A- Relational database group of related tables when database developed
B- data hierarchy (byte-filed-record-table-file-database)
C- database key primary key distinguish one record from another not repeated
D- database cardinality one to one-one to many-many to many

68- Database management system

It is used to create the database, maintain it, safeguard the data, and make the data available
for applications and inquiries A database management system is not a database but rather a
set of separate computer programs that enables the database administrator to create, modify,
and utilize database information; it also enables applications and users to query the database
Database management systems and data base administrator perform four primary functions
A- database development when a relational database is developed, the data fields and records
to be used in the database must be structured. The database administrator uses a database
management system and a Data Definition Language (DDL) the structure include (scheme-
subschemas-record structure)
B- database maintenance A data manipulation language (DML) is used to maintain a database
and consists of “insert,” “delete,” and “update” statements (commands). As a result users need
not to know data manipulation language
C- Database interrogation (‫ )االستعالم عن البيانات‬Users can retrieve data from a database by using
a query language. Structured Query Language (SQL) is a query language, and it is also a data
definition language and a data manipulation language
D- Application development for database

69- Data warehouse, Data mart and Data Lake

Data warehouse a copy of all the historical data for the entire organization can be stored in a
single location known as a data warehouse, or an enterprise data warehouse. A data warehouse
is not used for everyday transaction processing. Managers can use business intelligence tools to
extract information from the data warehouse. Business intelligence is the use of software and
services to collect, store, and analyze data produced by a firm’s business activities
to be useful data stored in data warehouse should be
A- be free from errors
B- Be uniformly defined.
C- Cover a longer time span than the company’s transactions systems to enable historical
research
D- Allow users to write queries that can draw information from several different areas of the
database

Data mart a data mart is a subsection of a data warehouse that provides users with analytical
capabilities for a restricted set of data. A data mart can provide security for sensitive data
because it isolates the data certain people are authorized to use and prevents them from seeing
data that needs to be kept confidential. Three types of data mart
dependent depend on data warehouse
independent data mart is created without the use of a data warehouse through a bottom-up
approach. The data for just one data mart for a single business function is uploaded,
transformed, and then loaded directly into the data mart
hybrid consists of dependent and independent

Data lake consists of unstructured data that captured by the system. Use NOSQL to analyze data
 70- Enterprise performance management EPM

Enterprise Performance Management (EPM), also known as Corporate Performance

Management (CPM) or Business Performance Management (BPM), is a method of monitoring
and managing the performance of an organization in reaching its performance goals. It aids in
the process of linking strategies to plans and execution
-reports comparing actual performance to goals
- reports on attainment of KPIs by department
-balanced scorecards, strategy maps, and other management tools
-creating and revising forecasts and performing modeling
- Generating dashboards presenting current information customized to the needs of individual
users

71- Data Governance

governance is responsibility of BOD

A- Corporate governance includes all the means by which businesses are directed and
controlled, including the rules, regulations, processes, customs, policies, procedures,
institutions, and laws that affect the way the business is administered. Corporate governance
spells out the rules and procedures to be followed in making decisions for the corporation

B- Data governance is similar, but it is specific to data and information technology. Data
governance encompasses the practices, procedures, processes, methods, technologies, and
activities that deal with the overall management of the data assets and data flows within
organization data governance include
Data availability-data usability-data integration-data security-data integrity-system availability-
system maintenance-compliance with regulations-roles and responsibility-data flow

Benefits of IT governance framework and control

A- identify specific roles need to be met

B- providing benchmark
C- provider higher likelihood for effective governance and control
D- compliance may be easier to achieve

72- Components of governance system according to COBIT

A- Processes
B- Organizational structure
C- principle polices and framework
D- information
E- culture ethics and behavior
F- people skills and competences
G- services infrastructure and applications
 73- Data life cycle

The period from creating data through it become out of date

A- Data capture through (acquisition-data entry-signal reception)
B- Data qualifying assessing completeness and quality of data consists of
data maintenance processing of data before deriving any value
data synthesis creating new values for use
C- data usage the application of the data to tasks, whether used in support of the organization
to make business decisions
D- data analytics process of analyzing data to obtain meaningful information
E- data publication is used for external financial reporting
F- data archival remove data from environment
G- data purging remove every copy of data

74- Record retention policy

Every organization should have a documented records management policy that establishes
how records are to be maintained, identified, retrieved, preserved, and when and how they
are to be destroyed
Factors to be considered in developing a records management policy include:
A- Federal, state, and local document retention requirements
B- Requirements of the Sarbanes-Oxley Act of 2002
C- Records of records
benefits of record retention policy
A- Locating documents that are needed is easier and more efficient
B- the probability of the organization’s compliance with all federal, state, and local regulations
C- Records will be adequately protected, and their accessibility will be maintained
D- Records that are no longer needed or that are no longer of value will be destroyed at the
appropriate time.

75- Business process analysis

is used to analyze a business process to determine the specific way the process is presently
being accomplished from beginning to end
Steps
A- determine the process to be analyzed
B- collect data about the process need to analyze it
C- map and visualize the process
D- analyze the process
E- determine potential improvement not include implementation
 76- Robotic process automation

A type of artificial intelligence is not the same thing as the use of industrial robots. Robotic
process automation software automates repetitive tasks by interacting with other IT
applications to execute business processes that would otherwise require a human. RPA
software can communicate with other systems to perform a vast number of repetitive jobs,
and it can operate around the clock with no human errors RPA software cannot replace an
employee, but it can increase the employee’s productivity The RPA software is not part of the
organization’s IT infrastructure. Instead, it interacts with the IT infrastructure, so no change is
needed to the existing IT systems. Thus, RPA allows the organization to automate what would
otherwise be a manual process without changing the existing systems
Benefits of RPA
A- Developing a process in RPA software does not require coding knowledge
B- It enables employees to be more productive because they can focus on more advanced and
engaging tasks
C- Once an RPA process has been set up, the process can be completed much more rapidly
D- cost saving
E- Robots follow rules consistently, do not need to sleep, do not take vacations, do not get sick
Limitation of RPA
A- Robots are not infallible. Like any machine, their reliability is not 100%
B- Robots cannot replicate human reasoning
C- Robots have no “common sense.” If a flaw in the instructions creates an error

77- Artificial intelligence AI

Is a field in computer science dedicated to creating intelligent machines, especially computers,

which can simulate human intelligence processes Artificial intelligence is categorized as either
weak AI, also called narrow AI, or strong AI, also called artificial general intelligence (AGI).
Weak AI is an AI system that can simulate human cognitive functions but although it appears to
think, it is not actually conscious. A weak AI system is designed to perform a specific task,
“trained” to act on the rules programmed into it, and it cannot go beyond those rules.
Strong AI is equal to human intelligence and exists only in theory. A strong AI system would be
able to reason, make judgments, learn, plan, solve problems, communicate, create and build its
own knowledge base, and program itself. A strong AI system would be able to find a solution for
an unfamiliar task without human intervention
Machine vision includes cameras, image sensors, and image processing software. It can
automate industrial processes such as quality inspections by enabling robots to “see” their
surroundings
Machine learning is another aspect of artificial intelligence being used in the accounting area. In
machine learning, computers can learn by using algorithms to interpret data in order to predict
outcomes and learn from successes and failures
it is used for (checking expenses reports-analyze invoices-bank reconciliation-risk assessment-
data analytics)
 78- Cloud computing

On-demand network access to a shared pool of configurable computing resources (e.g.,

networks, servers, storage, applications, and services)
Software as a Service (SaaS) capability provided to the consumer is to use the provider’s
applications running on a cloud infrastructure. The applications are accessible from various
client devices through either a thin client interface, such as a web browser (e.g., web-based
email), or a program interface. The consumer does not manage or control the underlying cloud
infrastructure including network, servers, operating systems, storage, or even individual
application capabilities, with the possible exception of limited user-specific application
configuration settings
Platform as a Service (PaaS) The capability provided to the consumer is to deploy onto the
cloud infrastructure consumer- created or acquired applications created using programming
languages, libraries, services, and tools supported by the provider. The consumer does not
manage or control the underlying cloud infrastructure including network, servers, operating
systems, or storage, but has control over the deployed applications and possibly configuration
settings for the application-hosting environment If a company uses Platform as a Service, the
company deploys its own applications to the cloud using the cloud provider’s operating systems
Infrastructure as a Service (IaaS) The capability provided to the consumer is to provision
processing, storage, networks, and other fundamental computing resources where the
consumer is able to deploy and run arbitrary software, which can include operating systems and
applications. The consumer does not manage or control the underlying cloud infrastructure but
has control over operating systems, storage, and deployed applications and possibly limited
control of select networking components

Benefits of cloud computing

A- Users pay for only what they use
B- decrease its investment in its own hardware and software
C- The provider keeps the software updated
D- Applications and data resident in the cloud can be accessed from anywhere
E- Technology available in the cloud can be leveraged in responding to new and existing
requirements for external compliance reporting
F- particular for small to medium-sized entities that may not be able to afford backup systems
Limitation of cloud computing
A- Reliability of the Internet is a concern. If the Internet goes down, operations stop
B- Loss of control over data and processing introduces security concerns
C- The quality of the service given by the provider needs to be monitored
D- language barrier problems
E- The ability to customize cloud solutions is limited
F- Expected cost savings may not materialize
 79- Block chain and smart contracts

Block chain is innovative technology that has potential to change accounting and it is a type of
digital database or leger that provides proof of who owns what at any moment in time because
each transaction added to ledger. It contains the history of every transaction when a change in
ownership occurs a new block is linked to the original chain to form new chain
crypto currency is a digital asset designed to be a medium of exchange using cryptography or
encryption to secure the transaction bit coin is a form of crypto currency
consensus mechanism is a cryptographic process that take control of the ledger from one party
and allows it to examined and maintained by multiple independent entities no centralized
organization control the chain
Miners authenticate the transaction by approve what the current block chain should be
distributed ledger the ledger is a type of distributed ledger that is encrypted public and shared
widely for anyone to view every transaction make the ledger grow larger there is no central
administrator
Nonce - The nonce in a block is a random string of numbers that is appended to the transaction
information in the block before the block is hashed
Hash, hashing – Hashing is taking an input string of any length and giving it an output of a fixed
length using a hashing algorithm
Nodes are computers on a peer-to-peer network. Nodes keep the network running by
participating in the relay of information

Smart contracts are computerized transaction protocols that execute the term of the contract
and it is a collection of data and codes that is deployed using cryptographically signed
transaction on block chain network
Benefits of smart contracts
A- Smart contracts can self-execute
B- The decentralized, distributed ledger on the block chain prevents modifications not
authorized or agreed to by the parties
C- Smart contracts can enhance market activity and efficiency by facilitating trade execution
D- Automation reduces transaction times and manual processes
E- Smart contracts can perform prompt regulatory reporting
Limitation of smart contracts
A- smart contract could introduce operational, technical, and cyber security risk
B- A smart contract may be subject to fraud and manipulation
 80- Data analytics

Data analytics is the process of gathering and analyzing data in a way that produces
meaningful information that can be used to aid in decision-making.
Types of data analytics
Descriptive analysis report past performance. Descriptive analytics are the simplest type of data
analytics, and they answer the question, “What happened”?
Diagnostic analysis is used with descriptive analytics to answer the question, “Why did it
happen”? The historical data is mined to understand the past performance and to look for the
reasons behind success or failure
Predictive analytics answer the question, “What is likely to happen”? Historical data is
combined with other data using rules and algorithms. Large quantities of data are processed to
identify patterns and relationships between and among known random variables or data sets.
Those patterns and relationships are then used to make predictions about what is likely to occur
in the future
Prescriptive analytics answer the question “What needs to happen?” by charting the best
course of action based on an objective interpretation of the data. Prescriptive analytics make
use of structured and unstructured data and apply rules to predict what will happen and to help
management decide how best to take advantage of the predicted events to create added value.
Prescriptive analytics are the type of analytics likely to yield the most impact for an organization,
but they are also the most complex type of analytics. If sales of a particular product have
declined, prescriptive analytics could help management develop plans to reverse the decline

81- Business intelligence

Business intelligence is the combination of architectures, analytical and other tools,

databases, applications, and methodologies that enable interactive access—sometimes in real
time—to data such as sales revenue, costs, income, and product data. Business intelligence
provides historical, current, and predicted values for internal, structured data regarding
products and segments. Further, business intelligence gives managers and analysts the ability
to conduct analysis to be used to make more informed strategic decisions and thus optimize
performance. The business intelligence process involves the transformation of data into
information, then to knowledge, then to insight, then to strategic decisions, and finally to
action
Data is fact but data alone is not information.
Information is data that has been analyzed and organized
knowledge understands of something
Insight is deep and understanding of complex situation
Components of business intelligence
data warehouse-data analytics-business performance management-dashboard
 82- Big data

Refers to vast datasets that are too large to be analyzed using standard software tools
Big Data can be broken down into three categories:
Structured data is in an organized format that enables it to be input into a relational database
management system and analyzed
Unstructured data has no defined format or structure. It is typically free-form and text-heavy,
making in-depth analysis difficult
Semi-structured data has some format or structure but does not follow a defined model it is
data that contain structured and unstructured data
Big Data is characterized by four attributes, known as the four V’s:

Volume: refers to the amount of data that exists

Velocity: refers to the speed at which data is generated and changed it also refers to speed of
analysis of data
Variety: refers to the diverse forms of data that organizations create and collect
Veracity: is the accuracy of data t can be trusted for decision making Poor-quality data leads to
inaccurate analysis and results, commonly referred to as “garbage in, garbage out.”

83- Data science

Data science is a field of study and analysis that uses algorithms and processes to extract
hidden knowledge and insights from data. The objective of data science is to use structured,
unstructured, and semi-structured data to extract information that can be used to develop
knowledge and insights for forecasting and strategic decision making The difference between
data analytics and data science is in their goals The goal of data analytics is to provide
information about issues that the analyst or manager either knows or knows he or she does
not know (that is, “known unknowns”). On the other hand, the goal of data science is to
provide actionable insights into issues where the analyst or manager does not know what he
or she does not know (that is, “unknown unknowns”). Data and data science capabilities are
strategic assets to an organization, but they are complementary assets.

Challenges of data analytics

A- The growth of data and especially of unstructured data
B- The need to generate insights in a timely manner for the data to be useful
C- Recruiting and retaining Big Data talent

84- Data mining

is the use of statistical techniques to search large data sets to extract and analyze data to
discover previously unknown, useful patterns, trends, and relationships within the data that
go beyond simple analysis and that can be used to make decisions it is science and art
Generalization of patterns is the ability to predict or assign a label to a “new” observation based
on a model built from experience
Classification – Any data analysis involves classification, such as whether a customer will
purchase or not purchase. Data mining is used when the classification of the data is not known.
Similar data where the classification is known is used to develop rules, and then those rules are
applied to the data with the unknown classification to predict what the classification is or will
be.
Association rules or affinity analysis, are used to find patterns of association between items in
large databases
Online recommendation systems – In contrast to association rules, which generate rules that
apply to an entire population, online recommendation systems use collaborative filtering
Data reduction – Data reduction is the process of consolidating a large number of records into a
smaller set
Clustering – Clustering is discovering groups in data sets that have similar characteristics
without using known structures
Dimension reduction entails reducing the number of variables in the data before using it for
data mining
Data exploration is used to understand the data and detect unusual values
Visualization, or visual discovery, consists of creating graphics such as histograms and boxplots
for numerical data to visualize the distribution of the variables and to detect outliers116 in order
to gain insights to support better decisions.
Supervised learning algorithms are used in classification and prediction. To “train” the
algorithm, it is necessary to have a dataset in which the value of the outcome to be predicted is
already known the dataset with the known outcome is called the training data. Data for which
the outcome is already known but is initially hidden (called the validation data) simple linear
regression is supervised learning algorithm
Unsupervised learning algorithms are used when there is no outcome variable to predict or
classify. Association rules, dimension reduction, and clustering are unsupervised learning
methods
neural networks are systems that can recognize patterns in data and use the patterns to make
predictions using new data
steps in data mining

A- Understand the purpose of the project

B- Select the dataset to be used.
C- Exploring, cleaning (cleansing), and preprocessing the data.
D- Data reduction: reduce the data dimension if needed
E- Determine the data mining task. Determining the task includes classification, prediction,
clustering, and other activities.
F- Partition the data into parts
G- Select the data mining techniques to use
H- Use algorithms to perform the task
I- Interpret the results of the algorithm
J- Deploy the model

Challenges of Data Mining

A- poor quality of data
B- data exist in multiple location
C- biases
D- data security-ethical issues
E- unstructured data

85- Time series analysis

A time series looks at relationships between the passage of time as the independent variable
and another variable as the dependent variable A time series can be descriptive or predictive.

Trend Pattern in Time Series Analysis

A gradual shifting to a higher or lower level. If a long-term trend exists, short-term fluctuations
may take place within that trend; however, the long-term trend will be apparent
Cyclical Pattern in Time Series Analysis
Any recurring fluctuation that lasts longer than one year is attributable to the cyclical
component of the time series. A cyclical component in sales data is usually due to the cyclical
nature of the economy.
Seasonal Pattern in Time Series Analysis
a time series can fluctuate within a year due to seasonality in the business
Irregular Pattern in a Time Series
time series may vary randomly, not repeating itself in any regular pattern
Benefits of time series
A- the ability to expect coming activities
B- analyze current activities against past to determine trend shifting
Limitations
A- the results could be misleading
B- assume that variables not change in the future
C- data used may be less reliable

86- Benefits and limitation of sensitivity analysis

Benefits
A- Sensitivity analysis can identify the most critical variables, that is, the variables that are most
likely to affect the result if they are inaccurate
B- Simulation is flexible and can be used for a wide variety of problems
C- Both sensitivity analysis and simulation analysis can be used for “what-if” situations
D- Both sensitivity analysis and simulation analysis are easily understood.
Limitations
A- The variables used in a sensitivity analysis are likely to be interrelated.
B- The results of sensitivity analysis or simulation analysis can be ambiguous
C- there is no guarantee it will be the best estimation
D- The results will be only as accurate as the model that is used.

87- Benefits and limitations of big data and data analytics

Benefits
A- The process of cleaning the data preparatory to processing it can detect errors, duplicate
information, and missing values
B- The results of data analytics done correctly can lead to improved sales revenues and profits
C- It can help to reduce fraud losses by recognizing potentially fraudulent transactions
D- The use of data analytics can vastly improve forecasting
Limitations
A- Big Data is used in data analytics to find correlations between variables. However, correlation
does not prove causation
B- if the wrong questions are asked of the data, the answer will be meaningless
C- Failure to take into consideration all relevant variables can lead to inaccurate predictions
D- In addition to the cost of the data analytics tools themselves
E- Selection of the right data analytics tools can be difficult
F- data may contain useless information

88- Data visualization

is the visual representation of information. It is used for better understanding data and
predictions from data in the data mining process, visualization is primarily used in exploration
and cleansing of the data in the preprocessing step of data mining and in the reduction of the
data dimensions step of the process.

Benefits
A- Data visualization can make data more understandable
B- It can promote quick presentation of large amounts of data
C- Visualization can illustrate relationships between data items and events,
D- Visualization can be used in data mining to help the data analyst determine which variables
to include and which may not be necessary
E- Visualization can enable identification of trends and better interpretation of the data

Limitations
A- Data that would be meaningful may be excluded in choosing the data to use in the
visualization, leading to biased results.
B- The information presented in the visualization may be oversimplified
C- The potential exists for misrepresentation or distortion of the data either accidentally or
deliberately through choices made in the way it is presented
 Types of visualization tools

Variables
Scatter plot can be used to show all the values for a dataset, typically when there are two
variables, and illustrate the relationship between the variables. A scatter plot shows the
intersection of the two variables. One variable may be independent and the other value
dependent, or both variables may be independent
a bubble chart can be used to illustrate relationships between variables, but a bubble chart
replaces data points with bubbles that vary in size according to the size of the values they
depict, thus adding the relative sizes of the values plotted as an additional dimension to the
chart.

Summarized Statistics
Dot Plot provides information in the form of dots. A dot plot can be used to visualize
summarized data points for each category on the x-axis.
Bar Chart is useful for comparing a statistic across groups it works well for depicting data that
can be easily categorized
Pie charts are primarily for showing proportions. A pie chart is in the form of a circle that
portrays one value for each category, marked as pieces of a pie
Line Chart can be used to visualize several observations for each category, using one line for
each series of observations. A line chart can also work well to depict change over time, such as
in a time series

Entire distribution
a histogram shows the frequencies of a variable using a series of vertical bars. The values of the
variable may occur over time, or they may be as of a moment in time. A histogram looks like a
bar graph. However, it is different from a bar graph. A bar graph relates two variables to one
another, whereas a histogram communicates only one variable, and a histogram is used to
depict the frequency distribution of that variable. To construct a histogram, the range of values
of the variable must be first divided into intervals
boxplot is another type of chart that can be used to display the full distribution of a variable

90- Best practice for visualization

A- does not skip values

B- does not overload tool with many information
C- limit the number of color used
D- ensure the design understandable for the user
E- ask others for feadback