978-0134474021 Chapter 16 Solutions Manual Part 2

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b. Print out a report that shows sales by month for each salesperson.

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Step 2: Then click on the salesperson entry and move it from the “Row Labels” window

Step 3: Highlight all the cells in the PivotTable and format them to display currency with

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c. Assume that Brown and David are in sales group 1 and the other three

salespeople are in sales group 2. Print out a report that shows monthly sales for

each group.

Step 1: To separate the sales people into groups, click on the sales person row in the

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Step 2: Right click the two highlighted cells and select “Group”. They will now have a

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Step 3: You can collapse and display the groups by clicking on the button to the left of

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16.10 Excel Problem Objective: How to do what-if analysis with graphs.

a. Read the article “Tweaking the Numbers,” by Theo Callahan in the June 2001

issue of the Journal of Accountancy (either the print edition, likely available at

your school’s library, or access the Journal of Accountancy archives at

www.aicpa.org). Follow the instructions in the article to create a spreadsheet

with graphs that do what-if analysis.

Most of the steps in the article can be done as indicated. One difference is finding the

If the developer tab is not available, follow these steps (for Excel 2007):

1. Click the Microsoft Office Button (in far upper left corner – see prior

2. Click Excel Options

3. In the “Popular” category, under “Top options for working with Excel” select

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The Developer tab normally appears to the right of

the View tab

The Microsoft Office Button is in the far upper left

Click on “Design Mode” to toggle

Click on Insert to add spin buttons

and other Active X controls

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On the Developer tab you then click insert and select the “spin box” option from the list of

choices of Active X controls. Then position your cursor in the cell where you want to insert a

b. Now create a spreadsheet to do graphical what-if analysis for the “cash gap.”

Cash gap represents the number of days between when a company has to pay its

suppliers and when it gets paid by its customers. Thus, Cash gap = Inventory

days on hand + Receivables collection period – Accounts payable period.

The “cash gap” formula indicates how much of a cushion a company has, given a set

of assumptions about inventory, receivables, and payables. If the projected cash gap is

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The purpose of your spreadsheet is to display visually what happens to cash gap

when you “tweak” policies concerning inventory, receivables, and payables.

Thus, you will create a spreadsheet that looks like Figure 16-11

c. Set the three spin buttons to have the following values:

Spin button for

Inventory

Spin button for

Receivables

Spin button for

Payables

Linked cell C2 C3 C4

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d. The article “Analyzing Liquidity: Using the Cash Conversion Cycle” by C. S. Cagle,

S. N. Campbell, and K. T. Jones in the Journal of Accountancy (May 2013), pp. 44-48

calls the “Cash Gap” the “Currency Conversion Cycle” and explains that bigger

values are bad because they indicate less liquidity (because cash needed to pay

suppliers is tied up in receivables and inventory). Indeed, the “cash gap” can even be

negative for companies, like Dell, that collect payment from customers in advance and

stretch out payments to suppliers as long as possible. Given that background, collect

the information from annual reports needed to calculate the “cash gap” for at least 3

years for Dell and 3 or more other companies. Enter that data in a spreadsheet and

create a graph that you think best highlights the trend in cash gap across the different

companies.

16.11 Answer all of the following multiple-choice problems:

1. The theory underlying the Balanced Scorecard is that improvements in the _____

section will lead to improvements in the _____ section leading to improvements in

the _____ section, ultimately creating better results in the financial section.

a. customer, learning & innovation, internal

b. learning & innovation, internal, customer

c. internal, customer, learning & innovation

2. Journal entries made by either the treasurer or controller should be subject to input

edit and processing controls. A data entry application control that is designed to

ensure that the total debits in a journal entry equal the total credits is called a

__________.

a. Sign check

b. Equality check

c. Reasonableness check

d. Zero-balance check

3. Violating which of the following principles of graph design would result in distorting

the magnitude of a trend in sales?

a. Displaying trend data in chronological sequence from left-to-right on the

x-axis

b. Starting the y-axis at zero

c. Neither of the above

d. Both of the above

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4. Fraudulent financial reporting is a concern in the GL/reporting cycle. The best

control to deal with that potential problem is

a. Proper segregation of duties

b. Processing integrity controls such as validity checks

c. An independent audit of all adjusting entries

d. Requiring mandatory vacations for all managers

e. Prenumbering of all documents

5. Creation and review of an audit trail is a detective control that can enable

organizations to find and correct problems arising from

a. Inaccurate updating of the general ledger

b. Unauthorized adjusting entries

c. Both a and b

d. Neither a nor b

6. An adjusting entry to record bad debt expense is an example of a(n)

a. Accrual

b. Deferral

c. Estimate

d. Revaluation

e. Correction

7. Which of the following XBRL components contains information about which items

should be summed to create a category total (e.g., which items comprise current

liabilities)?

a. Instance document

b. Style sheet

c. Taxonomy

d. Linkbase

e. Schema

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8. Which of the following XBRL components can, if used too much, limit the potential

benefits of comparability across organizations?

a. Presentation linkbases

b. Taxonomy extensions

c. Style sheets

d. Schemas

9. Which section of the Balanced Scorecard would benefit most from collecting data

from external parties, rather than relying on internally-generated data?

a. Financial

b. Customer

c. Internal Operations

d. Innovation and Learning

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SUGGESTED ANSWERS TO THE CASES

Case 16-1 Exploring XBRL Tools

Each year companies release new software tools designed to simplify the process of

interacting with XBRL. Obtain a free trial (demo) version of two of the following tools and

write a brief report comparing them:

Potential tools (your professor may suggest others):

Altova—available at http://www.altova.com/solutions/xbrl.html

MapForce—available at http://www.altova.com/xml_tools.html

Various free tools from XBRL US—available at https://xbrl.us

CalcBench spreadsheet tool—available at http://www.calcbench.com

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Case 16-3 Visualization tools for Big Data

Traditional graphs (bar charts, line graphs, pie charts) help decision makers see patterns

and relationships in data contained in typical spreadsheets. However, more advanced

virtualization techniques are required to understand Big Data. These tools can help

auditors make sense of the increasing amount of data, beyond just the traditional financial

statements, available from their clients. Visit one of the following sites (or others

recommended by your professor), watch the demo and, if available, download and use a

trial version of the software. Write a review of the demo(s) you view and the trial version of

any product(s) you test.

Virtualization tools:

Tableau—available from www.tableausoftware.com (if you click on learning you can

choose between an “on-demand” product demo or you can schedule a “live” demo).

Spotfire—available from Spotfire.tibco.com (a number of demos are available to

view, and you can download a trial version.

Grading suggestion: grade on thoroughness, completeness, and use of screenshots. Can

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