Big Data and Prediction Models

TOTAL POINTS 10

1.

Question 1

Which of the following variables are included in the Modified Jones model? (check all that apply)

1 point

Cash dividends

Kittens and puppies

Cash Revenue Growth

EBITDA

Accruals

2.

Question 2

Below is selected

data for Swedish Vallhund AB. Calculate

discretionary accruals for Swedish Vallhund using this data.

Net Income (NI)Cash from Operations (CFO) Prior TANormal Accruals3000200010000-0.160

1 point

-0.060

0.260

0.100

1000.160

0.460

3.

Question 3

Which of the

following companies is the most likely suspect for managing earnings lower This Year?

CompanyYearNormal AccrualsDiscretionary AccrualsSpaniel Craig CoTwo Years Ago-0.0520.024Spaniel Craig CoLast Year-0.068-0.014Spaniel Craig CoThis Year-0.2380.139Sean Collie IncTwo Years Ago-0.082-0.013Sean Collie IncLast Year-0.020-0.053Sean Collie IncThis Year0.080-0.143Pinscher Brosnan LtdTwo Years Ago-0.0380.310Pinscher Brosnan LtdLast Year-0.0490.188Pinscher Brosnan LtdThis Year-0.0440.246

1 point

Pinscher Brosnan Ltd

Spaniel Craig Co

Sean Collie Inc

None of the companies

Both Sean Collie Inc and Pinscher Brosnan Ltd

4.

Question 4

Which of the

following actions could affect a company's amount of discretionary expenditures?

(check all that apply)

1 point

Change depreciation assumptions this period

Spend more on advertising than budgeted in the current period

Delay a planned

R&D program for the next period

Increase sales growth

during the current period

Increase the expected percentage of sales this period that will have future warranty claims

5.

Question 5

Below is selected

data for Siberian Husky ZAO. Calculate

normal R&D for Siberian Husky using this data.

Chg R&D/ Prior TAPrior Chg Revenue / Prior TAPrior Revenue/ Prior TAa (Intercept)b (Prior Chg Revenue)c (Prior Revenue)0.0100.2001.5000.10-0.05-0.02

1 point

-0.039

0.060

-0.050

1.710

0.030

6.

Question 6

Which of the

following companies is the most likely suspect for managing earnings lower This Year for "big bath" motives?

CompanyYearDiscretionary R&DDistance (R&D)YoYR&D Q1YoYR&D Q2YoYR&D Q3YoYR&D Q4Chihuahua Eccleston CoLast Year0.0520.02761.1%68.8%10.3%30.5%Chihuahua Eccleston CoThis Year-0.0300.36731.1%30.2%14.8%6.8%Tom Boxer IncLast Year0.0010.75613.0%2.0%1.1%11.1%Tom Boxer IncThis Year0.0820.93540.3%46.1%58.4%73.8%David Terrier LtdLast Year-0.1900.29418.4%38.4%44.5%31.7%David Terrier LtdThis Year0.180-0.63416.3%33.9%52.8%35.7%Mutt Smith CorpLast Year-0.019-0.0330.7%3.5%13.1%12.7%Mutt Smith CorpThis Year-0.054-0.00711.8%8.3%2.4%1.4%

1 point

Mutt Smith Corp

Tom Boxer Inc

Everyone except Mutt Smith Corp

David Terrier Ltd

Chihuahua Eccleston

Co

7.

Question 7

For which of the

following ratios would an increase in the value of the ratio lead to an increase in the Beneish M-score? (check all that apply)

1 point

Asset Quality Index (AQI)

Leverage Index (LVGI)

Total Accruals to Total Assets (TATA)

SG&A Index (SGAI)

Sales Growth Index (SGI)

8.

Question 8

Which of the

following companies are potential manipulators according to the Beneish M-Score?

(check all that apply)

CompanyM-ScoreArcanine Inc-0.51Growlithe Ltd-2.63Houndoom Co-1.42Lillipup Corp-3.19Smeargle Pty-1.98

1 point

Growlithe Ltd

Houndoom Co

Lillipup Corp

Smeargle Pty

Arcanine Inc

9.

Question 9

Who first discovered

Benford's Law?

1 point

Dan Amiram

Simon Newcomb

Ethan Rouen

Frank Benford

Zahn Bozanic

10.

Question 10

Below is data from

five companies' financial statements. Which

of the following companies are potential manipulators according to Benford's

Law? (check all that apply) (Hint: get a calculator so you can do square roots!)

CompanyNumber of Leading DigitsKolmogorov-Smirnov statisticBriard Childress Ltd2309.9%Bulldog Grant Corp1456.2%Dachshund Green Inc9113.2%Lhasa Apso Frazier Co12413.2%Mi-Ki Tice Cie14536.2%

1 point

Briard Childress Ltd

Dachshund Green Inc

Lhasa Apso Frazier Co

Bulldog Grant Corp

Mi-Ki Tice Cie