Analytics mindset case studies – TechWear

Part I: Background: TechWear is a privately owned business that began operations in March 2015. Its sole business is the manufacture and sale of upper-end, high-tech sportswear. It only sells to large distribution ou ...

Part I: Background: TechWear is a privately owned business that began operations in March 2015. Its sole business is the manufacture and sale of upper-end, high-tech sportswear. It only sells to large distribution outlets. Its primary product is a line of lightweight exercise clothes that contain a new, longrange RFID chip that captures the following information about the user based on personal data (age, weight, etc.) entered by the user: ► Heart rate ► Perspiration rate ► Calories burned ► Exercise efficiency (percent of capacity) The chip is able to continuously send this information to a host device as far away as 15 miles. The clothes are also GPS enabled and able to track routes, distances and elevations. Management prides itself on being on the cutting edge. The company expects to conduct an IPO within a year or two. TechWear recently retained your firm as its auditors, largely because of your commitment to conduct a highly efficient, technology-enabled audit. Data You are first responsible for performing a risk assessment of TechWear related to its order-tocash function. Therefore, you know that your focus needs to be on sales and cash transactions. Your first task is to acquire the data for these transactions. You work with TechWear’s IT group to gain access to its sales and cash receipts data for its start-up period of operations, March through December 2015. You have been provided with an Excel file with this data (Analytics_mindset_case_studies_Techwear_P1.xls) so you can begin your analysis. The data file includes the following fields: ► Type: this is the type of transaction, which is either a sale (Sales) or a cash receipt (CashReceipt). ► TransactionNumber: this is the transaction number (beginning with 1001). ► AppliedToTransaction Number: this is the sales transaction number to which a cash receipt is applied. ► CustNum: this is a unique customer number used to identify each customer. Analytics mindset case studies – TechWear 1 © 2016 Ernst & Young Foundation (US). All Rights Reserved. SCORE No. 02315-161US► CustName: this is the customer’s name. ► TransactionDate: this is the date of the sale or cash receipt. ► Amount: this is the amount of the sale or cash receipt. Cash receipts will show a negative amount. ► InvoiceDate: this is the date the sale was invoiced (billed). ► ShipDate: this is the date the goods were shipped. Required Become familiar with your data file. Make certain that your data is complete and accurate before performing any analysis. Complete the following using Excel: 1. You’ve been told that the accounts receivable balance on the general ledger at December 31, 2015, is $684,491.19. You also know that as a start-up company, the beginning accounts receivable balance is zero. You are also told that there are no returns or write-offs in 2015. Verify this balance. 2. You’ve also been told that TechWear only conducts business with the following 15 approved customers. Validate that there are no other customer names and that no customer names are misspelled. – Bigmart – Cool Threads – Corner Runner – Cross Country Mart – Family Fit – Fit N Fun – Goodway – Neighborhood Athletic Supply – Northern Lites Analytics mindset case studies – TechWear 2 © 2016 Ernst & Young Foundation (US). All Rights Reserved. SCORE No. 02315-161US– Runner's Market – Southeast Regional – Southern Runners – Super Runners Mark – Urban Runner – ValueChoice