Importance of Excel in Substantive Testing and Data Analysis

QUESTION 1
The substantive tests of account balances done in lab-62 attested to excel’s quick and accurate
execution of given commands. The data is massive but the total receipt amount in column E676
of $ 799178.393 is accurate beyond a reasonable doubt, and so is the total number of buckets in
column L16.
In the lab-62 substantive lab test, there was a possibility of using other software successfully and
even achieve the same results. You would, however, need to use the same computer because
Excel is domesticated in individual computers. The only recourse available to you when you
want to access the same documents in Excel in real-time is to email them to and fro. If the files
are massive, such an activity would likely cause confusion, Workzone(2017).Excel is designed
to work on individual computers and remains an essential versatile tool which businesses use to
visualize data, organize, manage and forecast.
There are a number of alternatives to Excel. In a sense they could be better than Excel because
they have the advantage of being cloud-based, which means that you can access your documents
from any part of the world. Among excel alternatives are Google Sheets, Apache Open Office,
Excel Online, Zoho Sheets and libre office.
Excel facilitates and enriches the work of the auditors in testing the financial records of an entity.
The purpose of auditors’ examination is to determine the integrity of the financial statements of
an entity, Accounting for Tax (2018). Financial records are checked for their accuracy,
completeness, and validity. Substantive testing is the procedure which auditors use to carry out
this exercise, and it focuses on financial statements and their supporting documents. The aim of
the auditors in doing so is to find error whose presence would compromise the integrity of an
entity’s financial statements.
Excel comes as a useful handy tool to accountants to carry out substantive tests. Knowledge of
Excel is a skill which is very essential to accountants, Clarity (2013). Excel is an excellent tool
which most firms use to carry out qualitative analysis and interpretation of huge masses of data.
The results are always fantastic and any financial records which have been subjected to Excel
pass accuracy tests and their reliability is beyond reproach.
Auditor’s tests focus mainly on the final output- the balances-when a financial term ends. The
audit team recommends adjustments to the financial records so that when the financial
statements are finally released to the consumers they are fair, true and accurate, Accounting
Simplified (2017). The consumers of the financial statements are the keen stakeholders who
include the entity’s management, shareholders, creditors, and even the general public.
To the shareholders financial statements serve as instruments which help them gauge the
profitability of their stake in a company. They analyze their stock using various ratio evaluation
tools which include price, efficiency, profitability, liquidity, and debt, Chron (2019).

Unknown even to the entity, other interested parties could be watching the company’s
performance with lots of interest. Some are the entrepreneurs who are scouting for positive
indications to woo them to invest in the company’s stocks. These signals come from financial
statements, and one main indicator they focus on is profitability. Potential investors dread a
company whose profits keep fluctuating because of its riskiness.
From the foregoing, the importance of true, fair and accurate financial statements cannot be
gainsaid. It has been realized that financial statements play a very critical role in the life cycle of
a business and, therefore, competent agencies globally have established guidelines to standardize
their preparation. It is, therefore, a challenge to the accountants to stick to the rules to ensure that
their financial reports do not misstate facts and are error free, Accounting Tools (2019).
QUESTION 2
Data in Excel is most of the time raw and it needs to be analysis and organization. Pivot tables
play a crucial role in this endeavor, The All-In-One SEO( 2019). With pivot tables it is perfectly
possible to do the following on your Excel data:
 Analyze
 Summarize
 Present
 Explore
Step1
For you to analyze your data you must avoid highlighting the entire spreadsheet. You can create
a pivot table by selecting those columns only with important information. For instance, if you
want to analyze your total sales it would not be necessary to highlight columns which indicate
invoice numbers dates and even names of customers, they are not relevant to the task.
Step 2
After highlighting the relevant cells with the data which need analyzing, go to the “Data tab” and
then select “pivot table” under “Analysis” section
Step 3
A pivot table will open by default, and since you had already highlighted that particular
information on the spreadsheet, you will find the “select a table or range” option automatically
marked.
Step 4