ACCOUNTING & AUDITING WITH EXCEL2011

ACCOUNTING & AUDITING WITH EXCEL

PRESENTER: KOLONEIZEE HORATIUS PORTE, BBA

FOR STAFFS AT PARKER & ASSOCIATES, INC.

81 Sekou ToureMamba Point, Monrovia

TA B L E O F C O N T E N T S

I. Methodology

II. Objective of the Training Program

III. Overview of Excel

Inserting Formula

Copying, Cutting and Pasting of Formula

Auto Filling of Formulas

Relative and Absolute Cell Referencing

Other aspects of Excel3/24/2015 4:21 PM Parker&Associates, Inc 2

TA B L E O F C O N T E N T S

IV. Analytical Procedures (SAS 56/AU 329)

Analytical Tests

Horizontal Analysis

Vertical Analysis

Trend Analysis

Performance Measures

Ratios and Formula Evaluation

Stratification

Sampling

3/24/2015 4:21 PM Parker&Associates, Inc 3

M E T H O D O L O G Y

A brief overview of Microsoft Excel and its basic functions and features

Practical exercises to see the impact or importance of Excel features in Accounting & Auditing.


O B J E C T I V E• To be able to work with basic features in Excel

efficiently and effectively for Accounting andAuditing purposes.

* Our case study will be West Electronicsengagement workbook/spreadsheet.


O V E R V I E W O F E XC E L

INSERTING OF FORMULATo insert a formula in Excel, follow the following steps:

- Select the cell in which you want to insertthe formula

- Begin by typing the “Equal sign” (=)- Type/select your cell references, eg D10- Press Enter or click on a different cell.

Note: In order to get an answer/good result make sure there arefigures in the cell references you type /selected. Also remember toclose a parenthesis if you begin with one.

Example: =B10+D10, =(B10-C10), =(D25*C13) & =B10/D10


• COPYING, CUTTING & PASTING OF FORMULASTo Copy:- Select the formula cell by clicking on it;- Go to Edit Menu and click “Copy”; for shortcut use the Ctr+C for

copying formula;- Select the cell to wish you want to paste and go to Edit Menu and

click Paste or shortcut use the Ctrl+V for pasting and press Enter.

To Cut:- Select the formula cell by clicking on it;- Go to Edit Menu and click “Cut”; for shortcut use the Ctr+X for

cutting formula;- Select the cell to wish you want to paste and go to Edit Menu and

click Paste or shortcut use the Ctrl+V for pasting and press Enter.

NOTE: There is a difference between “Copy” and “Cut”. Copy isduplicating formulas while Cut is moving formula from one cell toanother without the original remaining.


A U T O F I L L I N G

• To Auto-fill:

- Select the formula cell of which you want to auto-fill byclicking on it;

- Move your curser to the lower right corner of yourselector;

- The curser turns into a small black cross “+”, click anddrag to the position you want to auto fill

- Press Enter when you are through.

Note: The selector is the black rectangle on theworksheet in Excel.


R E L AT I V E A N D A B S O LU T E C E L L R E F E R E N C I N G

RELATIVE CELL REFERENCING

In Excel, a relative cell reference identifies the location of acell or group of cells. Cell references are used in formulas,functions, charts, and other Excel commands. By default, aspreadsheet cell reference is relative. What this means is thatas a formula or function is copied and pasted to other cells,the cell references in the formula or function change to reflectthe function's new location. A relative cell reference consistsof the column letter and row number that intersect at thecell's location.

• An example of a relative cell reference would be C4, G15, orZ2345.

Note: When listing a cell reference - either relative orabsolute, the column letter is always listed first.


• ABSOLUTE CELL REFERENCING:

In Excel, an absolute cell reference identifies the locationof a cell or group of cells. An absolute cell referenceconsists of the column letter and row number surroundedby dollar signs ( $ ). An absolute cell reference is usedwhen you want a cell reference to stay fixed on a specificcell. An absolute cell reference does not change when aformula is copied and pasted to other cells.• An example of an absolute cell reference would be

$C$4, $G$15, or $A$345.

Note: An easy way to add the dollar signs to a cellreference is to click on a cell reference and then press theF4 key on the keyboard.


O T H E R A S P E C T S O F E X C E L

• Linking

• Charts

• Formatting of Cells

• Etc…..


Analytical Procedures (SAS 56/AU329)

SAS 56 provides guides on the use of analytical procedures and requires the use of analytical procedures in the planning and overall review stages of all audits. Analytical procedures are used:

• To assist the auditor in planning the nature, timing, and extent of other auditing procedures.


• As a substantive test to obtain evidentialmatter about particular assertions related toaccount balances or classes of transactions.

• As an overall review of the financialinformation in the final review stage of theaudit.

• To detect potential financial misstatements.


A N A LY T I C A L T E S T S

Analytical tests are evaluations of financial informationmade by a study of possible relationships among bothfinancial and nonfinancial data. They are used to assesswhether account balances appear reasonable and areused in accordance with SAS 56. We will explore thefollowing types of analytical tests:

- Horizontal Analysis- Vertical Analysis- Trend Analysis- Performance Measures- Ratios and Formula Evaluation- Stratification


H o r i z o n t a l A n a l y s i sHorizontal Analysis computes the increase anddecrease in a given balance, normally financialstatement items, over two or more periods.

Open Excel spreadsheet (absolute_relative.xls)for example.

NOTE: Relative Cell reference is

use in Horizontal Analysis.

In this example we want to write a formula once in

Cell E10 and fill the formula down to get a better

sense of this issue.

Example

CY PY Inc (dec)

Cash $56,000 $57,988

Accounts Receivable $122,000 $115,964

Prepaid expenses $13,522 $14,500

Inventory $521,332 $592,481

Investments $19,451 $21,558

Deposits $2,511 $2,511

Intangible $74,153 $74,103

Goodwill $83,941 $83,281

Automobiles $58,771 $68,114

Improvements $26,571 $26,714

Leasehold $74,221 $74,183

Furniture, fixtures $84,211 $84,333

Computers $141,283 $158,741

Land $125,114 $125,114

Total $1,403,081 $1,499,585


V E R T I C A L A N A LY S I SVertical Analysis examines the elements of a financialstatement for a single period whereby each balance sheetasset is shown as a percentage of the total assets and everyincome statement items shown as a percentage of the net

sales, etc.Open Excel spreadsheet (absolute_relative.xls) and click the secondworksheet for example.

NOTE: Relative & Absolute Cell reference are

use in Vertical Analysis.

In this example we want to write a formula once in

Cell D10 and fill the formula down to have it

work.

CY % of Total

Cash $56,000

Accounts Receivable $122,000

Prepaid expenses $13,522

Inventory $521,332

Total $712,854


T R E N D A N A LY S I STrend Analysis is comparing any of the analytical tests (e.g.horizontal, vertical, ratios, etc.) or other financial oroperational data over two or more periods. Please note thatthe use of Trend Analysis is practically a given in doing anyaudit work, as fraud and errors tend to create variances overtime which would go undetected if only the single year wasbeing analyzed.

When considering Trend Analysis, there are two primarysources of data: balances and transactions. If performingTrend Analysis on transaction, first the transaction data mustbe aggregated to create summary balances. Then thesummary balances can be presented in a table or graphicallyvia line chart. We will walk through this process by using aPivotTable to convert transactions into balances, and then usea PivotChart to graph those balances.


P I V O T TA B L EA PivotTable is a data summarization tool found in datavisualization programs such as spreadsheets or businessintelligence software. Among other functions, pivot-tabletools can automatically sort, count, total or give theaverage of the data stored in one table or spreadsheet. Itdisplays the results in a second table (called a "pivottable") showing the summarized data.

Pivot tables are also useful for quickly creatingunweighted cross tabulations. The user sets up andchanges the summary's structure by dragging anddropping fields graphically. This "rotation" or pivoting ofthe summary table gives the concept its name.


CONVERTING TRANSACTIONS TO BALANCES WITH PIVOTTABLES

Exercise 1

Open Excel Workbook named trendanalysis.xlsx.In this exercise we want to convert thetransactions into balances using PivotTable.

Our objective is to perform a Trend Analysis andexplore the sales of each item over time. Inorder to create that analysis, we need tocombine all sales amounts groups by Month byItemID.


CONVERTING TRANSACTIONS TO BALANCES WITH PIVOTTABLES CONT.

Exercise 2: Adding Multiple Fields

In a PivotTable, we can drag multiple field itemsinto the row and column zones. For example ifwe wanted to modify our PivotTable to showsales by month across both Customers andItems, we can simply add CustomerID into theColumn zone.



Exercise 3: Remove a Field

You can always remove a field from a PivotTable, simply byclicking and dragging the field items out of the PivotTable areaor by un-checking the field box. For example, lets now removethe ItemID field from the column zone,

Exercise 4: Filtering of Data in PivotTableData can easily be filtered in PivotTable reports. It is done bysimply clicking on any of the field item (drop down) filtercontrols, and check the boxes for the items you wish to showin the PT and after making your selection and clicking the OKbutton, the PT only includes the checked items.



Exercise 5: Refreshing the PivotTableWhen the underlying data in the PivotTable is change,that is making changes to the original document fromwhich the table was made whether by entering databetween the existing ones or by adding addition data atend, refreshing the table will update the table with allnew data enter within the data range. This is done byfollowing the following steps:PivotTable>Options>Refresh

Refreshing data entered outside the data range can bedone using the following steps:PivotTable>Options>Change Data Source



Exercise 6: Double-clicking with PivotTableThe are several places you can double-click in a PivotTable. Ifyou double-click on any number, Excel will “drill down” andcreate a new worksheet with all the transactions that supportthe double-clicked number. If you double-click on any row orcolumn field group, Excel will toggle between Show Detail andHide Detail.

•Drill Down: means to access data or information organized inhierarchical form by starting from general information andmoving through increasingly detailed data.

•Toggle: means a key or command that switches back andforth between computer operations each time it is used.



Exercise 7: Sorting PivotTable Reports

You can control the sort order of a PT report. The A>Zbutton sorts the PivotTable using the data that exists rightnow. Future data refreshes may not be sorted. A betterapproach is to define the sort order within the PivotTable.To define the sort order for example,

- Use the CustomerID combo box and select MORE SORTOPTIONS

- In our case, we want to show the customer with mostsale on top, so we choose to sort the PT Descending bySum of Amount.



Exercise 8: Formatting Number

To format numbers in a PivotTable, you will want todefine the formatting at the PivotTable level, not at theworksheet cell level. In other words, do not highlight cellsand apply number formatting within the worksheets, asyou normally would. You will want to define theformatting within the PivotTable, so that future refresheswill retain the formatting. To format the number, simplydouble-click the data field item, in our case “Sum ofAmount”, to bring up the Field Properties dialog box. Clickon the NUMBER FORMAT BUTTON, it will brings up theFormat Cells dialog, select the desired format and clickOK to apply the format to the PivotTable.



Exercise 9: Page Fields

Page Fields can be thought of as “global filters”. Anyfield item placed in the Page Fields area will filterdata. For example, we want to be able to filter thesales data by item. We simply drag the ItemID fieldin to the Page Fields area.

The PivotTable shows data for all ItemIDs. However,interacting with the page fields control allows us tofilter the report to display only transaction we wantto see.


P E R F O R M A N C E M E A S U R E SPerformance measures help identify and quantify critical metrics and successfactors that can be tracked over time, and can contain both financial andnonfinancial data. For example, the below list represents a sampling ofperformance measures that could be used for accounts payable processing:

• Number of invoices processed.

• Number of invoices per vendor.

• Number of open invoices at period end.

• Top X vendor purchases (e.g. Top 10 vendor purchases).

• Percentage of adjustments to invoices processed.

• Number of hours overtime worked by staff

The Excel calculations for these performance measures can be performedusing worksheet functions like Sum(), Subtotal(), Count(), and others. We willcompute several of the above performance measures and demonstrate theapplicable Excel formulas.


P E R F O R M A N C E M E A S U R E S C O N T.

NUMBER OF INVOICES PROCESSEDThis type of analysis can be performed via several techniques: the Count()function, the Subtotal() function, PivotTables, and the subtotals menu item,just to name a few. The Count() function and the Subtotal() function will bepresented.

Exercise: To follow along, open the exercise workbook called “count.xls”. If ourunderlying data contains one invoice per row like in this one, our task ofcounting the number of invoices is simple because counting the number ofinvoices is the same as counting the number of cells with numbers. Theeasiest approach in this case is the Count() function, which counts thenumber the cells with numbers (ignores blank cells and cells with text). TheCount() function has the following syntax:

= Count(range)

Where

•Range is the range to count (includes number, excludes blank cells and textCells3/24/2015 4:21 PM Parker&Associates, Inc 28


SUBTOTAL FUNCTIONPurpose: The purpose of the subtotal function is to provide the user theability to efficiently and easily set up formulas that subtotal ranges of data,while automatically excluding any other subtotals in the range.

Useful When: The subtotal function is useful when inserting subtotals in themiddle of the data. For example, balance sheets, income statements, cashflow statements, or any other financial or operational statements that requiresubtotaled data.

Details: The Subtotal() functions is similar to the Sum() function, with thedistinction that the Subtotal() function excludes any other Subtotal()functions in the range. By contrast, the Sum() function will include all data inthe sum range, including other Sum() functions. The Subtotal() function willadd all data in the sum range except values provided by Subtotal() functions:



SUBTOTAL FUNCTION Cont.The syntax for the Subtotal() function is

=SUBTOTAL(function_num, range)

Where

•Function_num indicates the mathematical function to use.

•Range is the range to subtotal

The first argument of the Subtotal() function is function_num, and may be anew concept. Microsoft wanted to make the Subtotal() function very useful, itwanted to enable the Subtotal() function to add values of the range, as wellas do other types of math, for example, compute the average of the range orcompute the minimum value of the range. Microsoft needed a way to allowthe user to tell the Subtotal() function which math to use. It provided us withthe function_num argument. Microsoft then assigned some arbitrary codes(numbers) to the various math functions, which we use as the first argument.So, when we want the Subtotal() function to add the values in the range, weuse 9 as the first argument or if we want the Subtotal() function to take theaverage of the range, we use 1 for the first argument.3/24/2015 4:21 PM Parker&Associates, Inc 30


SUBTOTAL FUNCTION Cont.Here is a table of the main function_nums:

To practice the Subtotal() function, pleasesee the subtotal.xls workbook.

In this example the formula to use in D41 is=SUBTOTAL(9,D31:40)

Where

•9 is the function _num for sum.

•D31:D40 is the range to subtotal

By altering the first function argument, we cantell the Subtotal() function what type of math to apply to the range. By setting the firstargument to 2, we tell function to count the number of values in the range. Theformula is: =SUBTOTAL(2,range).

Count() and Subtotal() can quickly be used to compute the number of invoicesprocessed. If we want to compute the number of invoices processed by vendor, bymonth, etc.. It is probably quickest to use a PivotTable.

Function_Num Function

1 AVERAGE

2 COUNT

3 COUNTA

4 MAX

5 MIN

6 PRODUCT

7 STDEV

8 STDEVP

9 SUM

10 VAR

11 VARP



NUMBER OF INVOICES PER VENDORTo count the number of invoices per vendor, we will create a new PivotTableby dragging the VendorID field into the Row region and the InvoiceID into theData region. Then, we instruct Excel to count the number of invoice. Bydefault, Excel sums numerical data placed into the Data region. The way totell Excel to change the math is to open the field properties dialog box for thedata field item (in this case InvoiceID), and then change the function fromSum to Count. To open the field properties dialog box:

-Either right-click any number in the Total column and select Value FieldSettings, or double-click on the InvoiceID field label (Sum of InvoiceID).

-Select Count instead of Sum and click OK. The resulting PivotTable will countthe number of records (Invoices) per VendorID, thus providing the number ofinvoices per vendor as requested.

To follow this exercise, open the exercise workbook called ptcount.xls.



TOP X VENDOR PURCGASES WITH AUTOFILTERThere are several techniques for pulling Top X of any data set, for example,Top 10 vendor purchases. We will look at a simple feature called AutoFilter.

Purpose: The purpose of the AutoFilter menu item is to facilitate filtering datafrom a data table. This command will create combo boxes that allow the userto specify the filter criteria.

Useful When: The AutoFilter is useful when trying to analyze raw data. It is aneasy item to set up, and will allow you to sift through large amounts of dataquickly.

Detail: The AutoFilter menu item instructs Excel to set up combo boxes (or“drop downs”) on each column header in a data table. The user can thensimply click a combo box to filter. Each of the unique values that exist in thedata for that particular column will be presented as a choice in the dropdown. Once the user selects criteria from the drop down, Excel shows onlythose rows that satisfy the criteria. That is , Excel only displays rows wherethe data in the row matches the value selected in the combo box. In addition,custom filter definitions can be created, and you can filter on multiplecolumns.3/24/2015 4:21 PM Parker&Associates, Inc 33


TOP X VENDOR PURCGASES WITH AUTOFILTERIn order to follow, open exercise work book called topx.xls.

To turn on AutoFilter, select any cell with the range of data and then:

Click: Home>Sort & Filter>Filter, or Data>Filter.

As you can see, Excel provides drop down controls for the columns. We can interact with thesecontrols and apply a filter.

In our case, we want to see only those transactions where VendorID is 1001. So we would select1001 from the VendorID drop down. Once applied, Excel shows only those rows meeting thecriteria.



TOP X VENDOR PURCGASES WITH AUTOFILTERYou may also gave noticed that the filter controls (drop downs) includeadditional filter types that we can play with. One in particular enables us tofilter for the Top X values of a column. To apply a Top X filter, simply followingthis:

-From the filter control drop down, select Number Filters > Top 10.

There are some options in the Top 10 AutoFilter dialog box, including theability to identify how many Top items to show. Once you click OK, the list isfiltered to include only the items selected.

NOTE: In an AutoFiltered list, the Subtotal() function only includes those rowsthat are visible. This is unlike the Sum() function, which includes all rows infiltered data, whether hidden or visible.


R AT I O S & F O R M U L A E V A L U AT I O NRatio analysis is typically performed by comparing financial statementbalances with other financial statement balances. A list of common ratio testsinclude the following:

Working Capitol Current Assets- Current Liabilites

Working Capitol Index Current Year WC – Prior Year WC

Current Ratio Current Assets/Current Liabilites

Inventory Turnover COGS/((Beginning Inventory+Ending Inventory)/2)

Debt To Equity Total Debt/Total Stockholders’ Equity

Operating Cash Flow Cash Flow from Operations/Current Liabilities

Cash Flow Interest Coverage (Cash Flow from Operations+Interest+Taxes Paid)/Interest Paid

Cash Flow to Capital Expenses Cash Flow from Operations/Capital Expenses

Cash Flow to Debt Cash Flow from Operations/Total Debt

Obsolete Inventory Ratio Obsolete Inventory/Ending Inventory

Sales Growth Index Current Year sales/Prior Year Sales

Gross Profit Sales – COGS

Gross Margin (Sales – COGS)/Sales

Gross Margin Index Current Year Gross Margin/Prior Year Gross Margin

Stock Sale Ending Inventory/Sales

Return on Equity Net Income/((Begin. Stockholders’ Equity/Ending Stockholders Equity)/2)


R AT I O S & F O R M U L A E V A L U AT I O N

Computing ratios with an electronic worksheet is straightforward. Simple ratios, suchas Working Capital and Current Ratio, we are easy to enter accurately into Excel. Someof the more complex ratios like Inventory Turnover, however, can present a challenge.

The challenge simply is controlling the order of operations, that is, ensuring that Excelcomputes the ratio as intended. Once we write the formula and press Enter, Excel willgive us a result. But, it can be hard for us to tell if the result is accurate. We knowExcel’s result is mechanically and mathematically accurate. But did we properly writethe formula to provide the ratio we intend? How do we know we put the parenthesisin the right places? For example, how do we know we put the parenthesis in the rightplaces? For example, how do we know that Excel is, in fact, adding beginninginventory and ending inventory, and then dividing the sum by 2 to determine theaverage? Microsoft has provided us with the ability to see how Excel computes anyformula. This Excel feature comes in handy when evaluating complex formulas andratio calculations. The feature is the “Evaluate Formula” feature, and it essentiallywalks you through each step of the formula computations.


R AT I O S & F O R M U L A E V A L U AT I O NFor example let’s open the exercise workbook ratios.xls. In this example the formula isalready given to compute the Inventory Turnover. Our duty to evaluate if Excel did thecomputation right.

The formula in C14 isC11/C12+C13/2 computes26,059.52. This number seem abit high for inventory turnover, soto see how Excel is calculating theformula, we launch the Evaluate

Formula feature by clicking: Formulas Tab > Evaluate Formula.

The Evaluate Formula dialog box will open and you will see, Excel underline the nextcomponent of the formula it will evaluate. In our case, you can will see that C11 isunderlined, this indicating that C11 will be converted into its value. Clicking theEvaluate button tells Excel to move to the next step. With the formula used, weinstructed Excel to divide the COGS by the Beg. Inventory , add the End Inventory tothe quotient and then divide by 2. With parentheses, the formula could be rewrittento instruct Excel to compute the values inside first. The parentheses instruct Excel toadd C12 and C13, divide the result by 2 to determine average inventory. Then, todivide C11 by the average inventory.

Using the Evaluate Formula feature enables us to see exactly how Excel computes all formulas,and is handy when constructing complex formulas and ratios.


S T R AT I F I C AT I O NStratifications count the number and/or dollar value of recordsof a population falling within specified intervals. Stratificationscan also provide a useful view into the largest, smallest, andaverage dollars transactions. This is useful in understanding aprocess flow over time and related financial risk.

To prepare stratification reports, several Excel techniques areavailable/ The sum can be quickly gathered with the Sumif()function. For those who prefer graphical user interfaces, WizardsExcel provides the Conditional Sum Wizard. Identifying thelargest, smallest, and average value in a range is easilyperformed with the Max(), Min(), and Average() functions,respectively.


S T R AT I F I C AT I O NExample: (SUMIF)

To follow along, we are to open workbook stratification.

In our engagement with West Electronics requires us to examine the invoicetransaction file. We would like to know the total dollar value of all “old”invoices. That is, we would like to know the dollar value of all invoices datedbefore our selected date We will use the Sumif() function to quicklyaccomplish this task.

The Sumif() function adds the cells in the range that satisfy the specifiedcriteria. The functions has the following syntax:

=SUMIF(range,criteria,sum_range)

Where

Range is the range of cells that you want evaluated by criteria.

Criteria is the criteria in the form of a number, expression, or text thatdefines which rows will be included in the sum.

Sum_range is the cells to sum when their corresponding columns in rangematch criteria.



Let us find out the sum of an invoice number. So, we need a way to tell Excel to sum allthose transactions where the Invoice# equals 21099, even if that Invoice# may appearon several rows. We will construct the Sumif() function:

=SUMIF(B22:B490,D8,E22:E490)

Where

B22:B490 is the range to compare against the criteria (Invoice#)

D8 is the criteria that must be met in order for the row to be included in the sum.

E22:E490 is the values (sum range) to sum if range meet criteria.

In the example, above, we told Excel to include those rows where Invoice# equaled21099. since we wanted to include those rows that equaled a value (value in D8,21099, the criteria (second function argument) was expressed simply as the cellreference D8. The more difficult case is telling Excel to include values where the rangeis greater than, or less than (instead of equal to), the criteria.



In order to use greater than or less than logic, we will need to modify thesecond argument of the Sumif() function. The modification is adding the < forless than, or > for greater than, or <= for less than or equal to, or >= forgreater than or equal to. However, base on the way Excel formula syntaxworks, we cannot simply enter the second argument as <D8, or >D8. We haveto use a special syntax, which is the concatenation syntax, as follows: “<“&D8or “>”&D8.

To demonstrate this, let consider the next step in our engagement, which is toget the total for all invoices dated before January 1, 2006. The formula towrite in E17 is

=SUMIF(D22:D490,“<”&D17,E22:E490)

Where

• D22:D490 is the range to evaluate, the Invoice Date column

• “<”&D17 is the criteria, less than the date in D17

• E22:E490 is the range of values to sum if the invoice date meets thecriteria


S T R AT I F I C AT I O NCONDITIONAL SUM WIZARD

Sometimes, it would be useful to be able to specify two or more criteria witha Sumif() function. However, one limitation of the Sumif() function is that itonly accepts a single column in its criteria argument. The Condition SumWizard allows us to specify multiple columns of criteria.

In our engagement with West Electronics, we need to determine the total ofinvoices that are dated before January 1, 2006, and that are greater than$5000. Therefore, we are going to use Conditional Sum Wizard to execute thisexercise.

The Conditional Sum Wizard Add-In is not installed by default, we mustmanually install it. To do so, simply open the Add-In dialog box by clicking the

Office Button>Excel Options>Add-Ins>Manage Excel Add-Ins>Go.


S T R AT I F I C AT I O NLARGEST, SMALLEST, AND AVERAGE

Excel provides three easy functions to compute the largest valuein a range, the mallest value in a range, and the average value ofthe range. They are Max(), Min(), and Average() respectively.

The syntax for these functions are as followed:

=MAX(range), where range is the range in which to find themaximum value.

=MIN(range), where range is the range in which to find theminimum value.

=AVERAGE(range), where range is the range you like to average.


S A M P L I N GSampling is concerned with the selection of a subset ofindividuals/data from within a population to estimate characteristics ofthe whole population.Example 1[Periodic Sampling) (refer to exercise workbook calledsampling.xls)In our audit of West Electronics, we need the client to pull every 20th

employee file. In order to use sampling tools, we need to ensure thatthe Analysis ToolPak is installed. To install this Add-In:-Click the Office Bottom>Excel Options>Add-Ins>Manage Add-Ins>Go.-Check the Analysis ToolPak box and click OK.

Now that the Analysis ToolPak has been installed, we have access toExcel’s built-in sampling feature. To open the Sampling dialog box:-Click Data Tab>Data Analysis-Selecting Sampling form the Data Analysis dialog box and click OK


S A M P L I N G-Sampling dialog box will open.

-Enter the Input range, that is the range of cellsthat contain data to pick a sample from.

-Select the Sampling Method, in this case wewant a Periodic sampling and include the Xth

number, in our case the 20th of EmployeeID.

-Select the Output Options, that is where wewant the result to appear. In our case, we wouldlike for the result to be side the original data.

-Click OK.


S A M P L I N G-Exercise 2 [Random Sampling]

We are to perform a random sampling of a listchecks cut for the year on every 10th item in thelisting. We will for the same step of the periodicsampling.



THE END Hope you had a better time learning about new

features in excel that will assist you in accounting and auditing in excel. Go now and

impact it into your daily life at home or work.

Thanks for your attention!!!!

(YOU DON’T ALWAYS HAVE TO BE THE BEST, BUT YOU ALWAYS NEED TO DO YOU BEST]

K. HORATIUS PORTE, BBA

ACCOUNTING & AUDITING WITH EXCEL2011

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