Category Archives: Data Analysis

Excel 2016 – Chronicles Vol. II

For many people saying thank you carries more weight then a big celebration of accomplishment or award. It’s the little things that matter.  Excel 2016 has many of those little things.  Slight differences which go unnoticed by most but add tremendous value.  One of the little things added to Excel 2016 is ability to add to completely independent windows.  In  the past windows could be created but they both were controlled by the same ribbon.  This limited the flexibility in both windows.  For example you always had to keep in mind which window was active to preform operations.  The small change into two completely independent windows makes it easier to work with multiple monitor setups.  Here’s a quick run through on how to create windows in Excel 2016.

1.Under the Ribbon click View

Excel 2016 Ribbon

2.Under View select New Window

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3. Two independent windows appear. Notice two separate Ribbons.

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It is important to note that even though the same Excel workbook is separated in two windows communication between them still exists. This is a small change in the users eyes but a powerful one.

 

Cutting Audit Sampling Risk Down to Size: Automating the Sampling Process

Every Accountant professional at some point must take a sample. Sampling is defined as “the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class” according to Audit Sampling guideline AU Section 350. Essentially sampling is the process of examining a small portion of a client’s records to make a judgment on the credibility of the whole. One of the risks associated with this process is selecting a sample which is not an accurate representative of the whole. Samples which are done manually may seem random but fail to meet this rigorous standard. Think about it, random means lack of pattern. As humans we tend to stick to patterns and routines. An auditor may pick all even number selections or every third in an effort at randomness. In this situation the likelihood that gross errors in a client’s books will be missed are exponentially increased. Sadly, many audits rely on manual selections from an Excel spreadsheet. For example, let’s say an audit is needed on accounts payable transactions. The typical audit would involve selecting a sample number of vouchers and back track to the supporting documentation such as invoices and purchase orders. Using the automated Excel technique highlighted below can minimize sampling risk and increase productivity.

 

Using Excel a tool can be developed to automatically apply red highlights random general entries. In order to have Excel automatically select random journal entries, we first need to organize our spreadsheet into two tables like the one below. The first table will contain our journal entries and the second will help us select random entries.

Master List

 

Add Conditional Formatting

 Journal List

1. Highlight the list of journal entry id numbers

Conditional Format Menu

  1. Under the Home menu click conditional formatting > Highlight Cells Rules > More Rules

 

Edit Format Rule Menu

 

  1. Select the formatting Rule type titled “Format only cells that contain”
  2. Change logical condition to “equal to”
  3. Enter J3 cell address in the last box
  4. Click Ok

 

Note: This will check to see if any of the journal ids in column B match journal ids in Column J

 

Edit Format Rules

  1. Click on Conditional Formatting the Manage Rules

 Edit Rule Manager

 

 

  1. Click on New Rule
  2. Follow steps 3 and 4 entering cells J4, J5, J6, J7 in the subsequent conditional format rules

Sample Generator 7

10. An inventory of all conditional format rules should look like the picture above

11. Click Ok

 

 

Add Random Calculation Formula

Sample Generator 812. Enter the following formula in cell A3 =RandBetween(1,10)

 

Note: The RandBetween formula is called a volatile function. This means the result constantly changes. This particular formula will give a random result between 1 and 10. Press F9 to see the result change.

Sample Generator 9

 

13. Copy the RandBetween function into the cells A4 through A12


Add Vlookup Formula

Sample Generator 10

14. In cell J2 type in =Vlookup(I3,$A:$B,2,false)

15. Copy this formula from J4 through J7

The Result

Sample Generator 12

16. Red highlights will be applied to the journal entries which appear with a selection number  between 1 – 5

17. Press F9 to select another random sample

Note: In some instances a cell in the Selected Journal Entry column may appear with #N/A. This means the selected sample number has not been found. Press F9 again to get another sample.

 

Bigger and Better

 

What if you’re working with more journal entries and need a larger sample. How can this approach be adjusted to accommodate? In order to apply this technique to a sample size of 25 we would need to make three adjustments to our spreadsheet:

1. Add more journal entries to the Journal Entry Master List

2. Revisit steps 2 – 8 for conditional formatting and enter cells J8 to J28. This will give the ability to select 20 more samples.

3. Change the RandBetween formula that appears in each cell in column A from RandBetween(1,10) to RandBetween(1,25).

4. Extend the helper table which contains the columns titled Selected Samples and Selected Journal Entry 20 more rows. The column titled Selected Samples should go from 1 to 25. Copy the vlookup formula down 20 rows.

 

This combination of tools is one of many techniques which can be used to simplify and reduce risks in the auditing process. To view a demonstration of this tool in action visit

youtu.be/zXqd-T_14fE.

Subtotal Function

If you’ve been in any of our classes you know we love to share shortcuts.  The shortcuts can be keyboard shortcuts or anything that will help our attendees do things quicker.  Here we talk about the subtotal function (not to be confused with subtotal tool).  This function will help quickly aggregate only visible rows if some rows are hidden.

Never Update the Pivot Table Source Range Again

Pivot tables are one of the most helpful tools in Microsoft Excel.  I literally use it everyday for the various projects I work on.  One of the crucial steps when working with a Pivot Table is to update your source range.  Updating a source range is needed when new data is added.  This is an easy step to forget when you are working on multiple time sensitive projects.  There are two ways to get around this issue.  The first technique is to transform the source range into a table.  A table is a way to tag a group of cells in Excel.  To change a group of rows and columns to a table do the following:

Range

 

Range2

1. Click Insert

2. Click Table

Select Table Range3. Specify the data range of the table

4. Click Ok

Range to Table

5. The source range has been transformed into an official Excel table

The next step would be to create a pivot table and specify the table range.  Excel will automatically recognize that this is a special “table”.  Now any additional rows or columns  you add to the table will be automatically carried to the pivot table.  All you have to do is refresh the pivot table.  Tables are handy tools which have other benefits as well.  We will share another approach on how to automatically update a source range in our upcoming class. Register here.