Below is a conversation between Mitch and AJ, the audit junior.
AJ: Hi Mitch, how is it going?
MB: Good, I was relaxing until you came along.
AJ: Fran asked me to do some analysis of Hillsburg’s inventory, so I prepared some information for her. Could you please take a look?
MB: Sure. Oh wow! Lots of numbers here.

AJ: Yes, I pulled together the year-end inventory balances for items that Fran was interested in and wanted to look at. I also included Hillsburg’s loss provision for those items.
MB: Great! But I get dizzy looking at all these numbers. Let’s hope that Fran can make sense out of this information.
AJ: What do you mean?
MB: Well, maybe you could have presented this information in a different way. Have you heard of data visualization? Excel has some simple features—sparklines and icon sets—that you can use to help see the trends in the data. I found some cool videos that show you how to use those functions. Why don’t you give it a try and see what you come up with.
AJ: Ok, I think I can do that.

REQUIRED

1. Discuss and explain the advantages and benefits of data visualization versus numerical presentation of data for risk assessment procedures.

2. Discuss the common types of data visualizations and how they can be used for risk assessment procedures.

3. Access the two videos Mitch mentioned (the links are below) and perform the analysis of inventory using sparklines and icon sets.www.journalofaccountancy.com/videos/excel  -sparklines-how to.htmlwww.journalofaccountancy.com/videos  /microsoft-excel-icon-sets-how-to.html

4. What do you see in the data? What further inquiries would you make to follow up on your analysis?

Transcribed Image Text:

Year 2020 2019 2018 2017 2016 2015 Power Tools 1 734 059 1 780 343 1 093 043 9 039 485 3 940 009 2 893 405 Loss 43 351 44 509 27 326 225 987 98 500 72 335 Inventory Type (Year-End Balances in $) Loss 13 272 Lands. Equipment 1 209 343 11 033 6 706 10 779 9 787 9 773 Hand Tools 473 985 394 039 239 485 384 953 349 538 349 032 3 425 322 2 343 535 2 342 564 2 346 542 6 543 234 Loss 41 118 116 461 79 680 79 647 79 782 222 470 Electrical Equipment 2 342 523 2 343 253 3 435 332 2 346 545 6 445 434 2 365 435 Loss 67 933 67 954 99 625 68 050 186 918 68 598