cpe article excel in the workplace

Today’sCPA July/August 2015 45

and raw data manipulation tools. These skills, while not unique or exhaustive, were collected from discussions with various practicing professionals across many areas of accounting whose jobs demand these skills to successfully complete their responsibilities.

Improving Excel skills requires a level of curiosity and willingness to learn. To sacrifice time to complete a particular task and instead focus on skill development, you should strive to find those skills that are applicable to a variety of tasks. With this in mind, the five skills we have selected can be utilized by auditors, tax professionals, managers and individual practitioners. Additionally, these skills are adaptable and cover a variety of tasks, including tax preparation, budgeting and reporting, among others. However, before we walk through each of these Excel skills, something needs to be said about the necessary proficiency in Excel core competencies.

Excel Core CompetenciesThe following core competencies are not particular Excel skills, but

rather speak to the common-sense use of the application that makes it a viable tool in the workplace. They also serve as reliable internal controls. By incorporating these competencies into the original creation of a spreadsheet, future use by anyone will be seamless.

Presentation is the most basic of competencies, but is often underutilized because it takes time and does not necessarily resolve the task at hand. However, spreadsheets that are hard to follow and lead to re-creation of prior work (and frustration) are the opposite of efficient. Proper presentation begins with a header section that includes the name of the creator, the date of creation and a purpose statement of the workbook. The workbook should then include separate data and analysis sections, which provide a critical internal control and ensure solutions are easily identified. The data section includes the raw inputs that may vary by job or by day, while the analysis section flows from the inputs and provides a solution to support a decision. Only the inputs in the data section should be changed in order to review possible alternative solutions.

Figure 1 illustrates a proper heading that can be included on the front page of a workbook or presented on the same page with the data and analysis sections. These sections do not take long to create and provide a good audit trail when spreadsheets are shared within an organization. Proper presentation also includes the use of basic tools such as borders, fonts and text formatting. Cell highlighting and conditional formatting (under Styles in the Home ribbon) help as visual aids that direct readers to the proper cells of the workbook.

Closely related to presentation is proper workbook use. A common mistake promoting inefficiency is the use of separate Excel files as opposed

CPE ARTICLE

By J. Owen Brown, CPA, Ph.D., and Bradley Lail, CPA, Ph.D.

Every CPA recognizes the continuing need to enhance his/her technical skills, especially those related to Excel. In fact, the American Institute of CPAs (AICPA) believes that anyone entering the accounting profession, regardless of his/her specific career path or the accounting services he/she performs, must be able to leverage technology and develop the necessary skills to use these tools effectively.1

Excel in the Workplace: Core Competencies and Practical Applications for CPAs

Curriculum: Other - Specialized Knowledge and Applications

Level: Basic

Designed For: Accounting and finance professionals in public practice and industry

Objectives: To highlight Excel core competencies that are necessary for spreadsheet proficiency and demonstrate five advanced skills that enhance these competencies

Key Topics: Dynamic spreadsheet solutions, pivot tables, reference functions, keyboard hotkeys, logic functions and raw data manipulation tools

Prerequisites: None

Advanced Preparation: None

The challenge is finding time to acquire these skills while performing the everyday job. And while opportunities exist everywhere to learn Excel, deciding which skills are the most critical to improve Excel efficiency is not easy.

In this article, we highlight some Excel musts, or core competencies, that are necessary for spreadsheet proficiency. We then demonstrate the following five advanced skills that enhance these competencies and are necessary for Excel mastery: pivot tables, reference functions, keyboard hotkeys, logic functions

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46 Today’sCPA

to a multi-tab workbook. While separate files can be linked together, data values do not automatically update between files if both are not open. A multi-tab workbook allows formulas to link between tabs and makes sharing files much easier. To best utilize a multi-tab workbook, renaming the tabs with clear labels, inserting blank tabs to separate collections of tabs with similar tasks and coloring tabs (by right-clicking on the tab and selecting the desired color) are all helpful. When a workbook grows beyond 10 or more tabs, the use of a table of contents tab comprised of links/buttons and “home” buttons (i.e., inserting shapes and assigning hyperlinks) on each subsequent tab is beneficial to navigate through a workbook.

Workbook use also includes proper protections at the file and cell levels. When a well-designed Excel workbook must be shared across employees, protecting particular worksheets and/or particular cells restricts users to only alter various key inputs to reach alternative solutions. An entire Excel file can be password-protected within the File menu under Protect Workbook or under Changes in the Review ribbon. Other protection options include restricting access (read versus write) and protecting particular sheets or cells via a password.

The final core competency alludes to the most common misuse of Excel: treating a workbook as a one-off solution. All too often spreadsheets are used more as a word processing tool and less as a data analysis tool. Excel can serve as a quick calculator, but a majority of our tasks are recurring, which necessitates a dynamic spreadsheet that can be used routinely to provide the needed solution. Dynamic spreadsheet solutions require separate data and analysis sections (as previously discussed) and the proper use of formulas that incorporate relative, permanent and/or mixed cell references (using the F4 key to toggle quickly between reference types). Such referencing allows

for the proper copying/dragging of formulas to relate to the correct rows and columns. The use of check figures, zero-balance tests and expected ranges, combined with conditional cell formatting, help indicate when solutions provided could be inaccurate.

Having discussed the proficiency needed in Excel core competencies, we now turn to five important Excel skills and applications that can enhance your ability to summarize data, analyze outcomes and communicate results.

Excel Skill #1: Pivot TablesWhile often perceived as an advanced Excel topic, pivot tables are easy to

develop when needing to analyze a set of data with many rows and columns. Figure 2 presents the typical output of a pivot table illustrating industry revenues and assets grouped by region. Pivot tables help answer questions quickly, such as:

What is the total revenue for each region (by month and year)?Which customer has purchased the most items?What is the average cost of each raw material by vendor for each of the

last three years?Where do the percentages of our taxable revenues originate by

business unit?Pivot tables do not require the use of formulas and can be easily refreshed

as the contents of the data change. The cells within pivot tables can also be manipulated in terms of fonts, borders, etc., like all other cells in Excel. We cannot cover all pivot table options, so our focus is on the basic functionality and recommend practicing additional options on a set of data. We also created an accompanying video at https://www.youtube.com/watch?v=XzZX5Tcq7fE&feature=youtube to demonstrate the figures and specific skills covered in this section.

Pivot tables are best utilized with large amounts of data with many records and variables. To create a table, first highlight the data and then select Pivot Table under the Insert ribbon. You will then be prompted to select the location of the table output. As shown in Figure 3, a sidebar then appears that shows the pivot table fields representing the columns in the data set (so ensure that all columns of your data are properly labeled). The flexibility of the pivot table is demonstrated by how easily you can drag these fields to either the ROW, COLUMN, VALUES or FILTERS box at the bottom of the sidebar. The ROW and COLUMN options allow you to group by particular fields that are non-numeric, while numerical fields are used in the VALUES box. Dragging multiple fields within the rows allows you to create subtotals while the columns allow you to calculate values in a two-dimensional setting.

The VALUES box allows you to apply a variety of functions (sum, count, maximum, minimum, average, etc.) by selecting the Value Field Settings option from the small drop-down arrow on any field included in the VALUES box. The “Show Values As” tab in the settings also allows you to calculate percentages of rows and columns instead of displaying particular calculations. Dragging a particular field into the VALUES box twice will also allow you to perform multiple calculations on the same field.

The FILTERS box is a display setting that allows you to only display data in the pivot table for particular non-numeric fields (for example, to filter by “Year” as shown in Figure 3). You can further modify what is shown by using the dropdown menus for each field heading within the pivot table. Filters can be applied by non-numeric fields (Label Filters) or numeric fields (Value Filters), as well as sorts by all label fields selected. The data contained in a pivot table can then be referenced by formulas external to the pivot table using the GetPivotData function (allows the function to adjust as the

Figure 1: Header

CPE ARTICLE continued from previous page


location of cell values change within the table) or standard functions. One caution with the use of pivot tables is that the table will not automatically update as the raw data changes or if the raw data expands beyond the initial data selected; however, the option to update the data in both cases is located in the Data section under the Analyze ribbon for pivot tables. The Analyze and Design ribbons provide many other pivot table options (when the active cell is located within the pivot table) or by right-clicking within the pivot table. Once a user is willing to attempt and understand the power of pivot tables, the ability to analyze data quickly and accurately using a variety of options becomes much easier.

Excel Skill #2: Reference FunctionsMore tools related to handling large sets of data include advanced

functions like the VLOOKUP and HLOOKUP. The “V” corresponds to a vertical search for a particular value and “H” for horizontal. Given that a majority of data sets move vertically, we will focus on VLOOKUPs, but the functionality of the HLOOKUP is similar. The purpose of this tool is to find particular transactions, records or other values in a large data set. While a sort could be applied to the data to locate a particular record, utilizing the VLOOKUP formula allows the user to request any needed field from a particular record or easily change the lookup value.

Figure 4 provides an expanded look into how this function could be used when trying to locate the amount owed for a particular vendor from an accounts payable subsidiary ledger. The first input in the function is the value you want to look up (Vendor ID), which should be a unique identifier in the data set. You can either specify the particular vendor number or, using a more dynamic approach, input the value in a cell and refer to this cell in the formula, which can then be copied/dragged for many inputs (while using the appropriate F4 cell referencing).

Next is the table_array to indicate the location of the raw data. While this reference formula can be a powerful tool, the data must be set up correctly for the formula to work properly. In particular, the first column of the table array must contain the value being looked up (in this example, Vendor ID), and the column must be sorted in ascending order. The table_array should be formatted as a permanent cell reference. Lastly, the col_index_num specifies which column contains the value that you want returned. In this example, because the amount owed is in the fifth column of the output (using the location of the lookup value, Vendor ID, as the first column), the number “5” is inputted. A series of values can be returned in separate cells by simply changing the column number containing the desired data. In summary, executing a successful VLOOKUP requires the following three steps:

Figure 2: Pivot Table Output

Figure 3: Pivot Table Field Options


48 Today’sCPA


1. Input the function (“=VLOOKUP”) and select the unique identifier that will serve as the lookup value;

2. Highlight the table array containing the raw data – this must include the unique identifier in the first column sorted in ascending order;

3. Indicate which column in the table array contains the value that you want returned.

A final comment regarding VLOOKUPs is how to capture a particular record when the record identifier repeats in the data set. For example, if the above-subsidiary ledger contained transactions by month, there could be multiple occurrences of a particular vendor number. In this situation, the vendor number and month should be combined and added to the data set using the CONCATENATE function (which connects text strings). The VLOOKUP could then reference the combined value to lookup data. For the function to perform effectively, each record identifier should only occur once in the data set; otherwise, the VLOOKUP will reference the first instance of the repeating identifier from the data set.

Excel Skill #3: HotkeysMany users of Word or Excel are familiar with basic keyboard

commands (i.e., hotkeys) such as Ctrl+C to copy, Ctrl+V to paste and

Ctrl+Z to undo actions. To most efficiently use Excel, a user should know how to apply a variety of approaches to get the task done. Just like clicking on the buttons and drop-down boxes in the ribbons or the right-click commands with the mouse, many Excel users are unaware that hotkeys can be utilized for most of the same commands. While a hotkey will not execute a task more quickly, the cumulative and combined effects of using the mouse and keyboard will improve efficiency. Accounting students at our university are required to take timed Excel exams creating a schedule without the use of a mouse. Results have shown that Excel proficiency and efficiency increase when students are able to use a combination of the mouse and hotkeys.

We present a number of frequently used shortcut keys applicable to Excel in Figure 5. Applying the hotkeys comes down to taking the time to remember them after determining which ones are most applicable to your daily tasks. Another way to understand how hotkeys can be applied is by simply pressing the ALT key. This causes Excel to display the subsequent keys above the ribbon that will open menus and/or activate particular ribbons. From there, options can be selected with subsequent key choices. Again, remembering key combinations quickly will lead to particular underlining, sorting, page layouts, etc., that may be used regularly.

Excel Skill #4: Logic FunctionsWe next consider a group of logic functions based upon the basic IF

statement and then expand to more advanced uses of the IF statement. Logic functions are applicable to many circumstances and often require the use of embedded functions (or functions within functions). The use of embedded functions, not unique to just logic functions, expands upon the dynamic use of a spreadsheet and improves data analysis.

The basic IF statement has three key parts: the criteria statement, such as a mathematical comparison of two values (e.g., “if C2 > C3”), the consequence if the criteria statement is true and the consequence if the criteria statement is false. These are great for internal controls such as returning a value of “NO” if total debits do not equal total credits. You can raise the complexity of the IF statement by introducing AND or OR functions in the criteria. The AND statement will return a true consequence if both criterion are true, while the OR statement returns a true consequence if either criterion is true. For example, you may want an indicator variable equal to 1 if the year of the transaction equals the current year and the dollar amount exceeds $1,000. A filter could then be applied on the indicator variable to identify the material transactions. You can also embed additional IF statements within the first IF statement’s true and false consequences. Using the previous example, if the transaction was less

Figure 5: Common Shortcut Keys

Hot Key Excel Action

Ctrl+c copy

Ctrl+x cut

Ctrl+v paste

Ctrl+z undo

Ctrl+PgUp switch worksheet tabs, left-to-right

Ctrl+PgDn switch worksheet tabs, right-to-left

Ctrl+Arrow move in the selected direction to the next blank cell

Ctrl+Shift+Arrow select all cells in a given range

Ctrl+s save your Excel workbook

Ctrl+Shift+Plus insert (cell, column, or row)

Ctrl+Minus delete (cell, column, or row)

Figure 4: Vlookup Syntax


than $1,000, a second IF statement can be utilized if the criteria statement is false. This embedded statement could change the indicator variable of a value of 2 if the transaction is still greater than $500. Figure 6 presents the related syntax for these two IF statements.

Relying on the premise of returning a true value to a criteria statement, the IF statement could be modified to a SUMIF function. The syntax for SUMIF is similar to the traditional IF statement, but it allows you to sum a range of cells if they meet particular criteria. Instead of using indicator variables and filters to sum transactions, a SUMIF function will do this for a range of cells. Figure 7 demonstrates this process, using the SUMIF command to sum the invoice amounts owed for a series of vendors based on vendor name.

The steps for the SUMIF command are as follows:1. Specify the range of cells that contain the criteria for which you are

looking (the column of Vendor Names);2. Reference the summation criteria (i.e., the Vendor Name where you are

collecting the sums); and 3. Specify the cell range that you want to sum if the criteria is met (Invoice

Amounts).

A careful use of permanent and relative cell references allows the formula to easily be copied/dragged down to each vendor name. The same procedures can be performed to calculate the average size of a transaction by changing the function to AVERAGEIF. Lastly, you can count the number of transactions for a particular vendor by using COUNTIF. An example of the COUNTIF syntax for “Aetna Inc” is also shown in Figure 7; the only difference in syntax for this statement is there is no sum or average range. Pivot tables can perform many of these same computations; it really depends upon the circumstances as to which tool is the best option.

Excel Skill #5: Raw Data Manipulation ToolsOne of the more challenging tasks is taking data from an external

source and converting it into usable Excel data. The source of such data can be output from websites (e.g., banks), software (e.g., QuickBooks) or other various systems used by clients, customers or even systems internal to your own organization. Most often this data comes into Excel in text form and requires the use of several Excel tools and a bit of creativity to

Figure 6: Simple and Nested IF Statements

Figure 7: SUMIF and COUNTIF Statements


50 Today’sCPA

create a workable spreadsheet. We discuss a few of the tools needed to help avoid a cell-by-cell manual approach, which is time consuming and prone to errors.

The starting point for manipulating a raw data file is understanding how the source data is delimited (or separated). The standard options are typically space, tab or comma delimited, but data can actually be separated by any identifier. Alternatively, data can be separated at a fixed width; it really just depends upon the source. Then apply the following steps:

1. Highlight the columns of source data brought into Excel;2. Select Text to Columns within Data Tools under the Data ribbon,

which walks you through a three-step conversion wizard;3. Specify whether the data is delimited or fixed width in the first

step, and then provide the delimiter or widths; and4. Select the type of data in each column. If the data is cleanly

separated, this wizard often takes care of the conversion, and the data is ready to use; however, if the data needs further alteration, several text commands can help.

Additional text alteration commands that may be useful are LEFT, RIGHT, MID, TRIM and CONCATENATE. After initially converting the data, some of the fields may still have text strings that need separating. Figure 8 demonstrates how to extract the Vendor ID from the Vendor Name. If the Vendor ID has a standard size such as four digits, a LEFT function can specify the cell containing the text string and then return the leftmost four characters. (Note: to separate the Vendor ID and the Vendor Name into two columns, using the Text to Columns feature described above would be more appropriate). The RIGHT function works similarly by returning the rightmost number of characters specified. The MID function adds more complexity by allowing you to return a middle number of specified characters from a text string. The function first refers to the text string, then the beginning position where you want the returned characters, and lastly the number of characters to be returned. The TRIM function trims extra spaces within a text string except single spaces between characters. This can be a helpful function prior to using some of the previously mentioned text functions, or it can be embedded within those functions in one step. Lastly, instead of cutting text strings, you may occasionally need to combine text strings that were separated in the conversion process. CONCATENATE is a straightforward function that allows you to combine as many text strings as necessary into one.

One word of caution to make these five text functions useful across many rows or columns of data: Some consistency across data is necessary. Otherwise, modifying the functions for each data input is no different

than manually manipulating the data cell by cell. Many other text commands are also available – select the Fx button next to the formula bar and search under the Text category for other useful options.

Concluding ThoughtsIn this article, we identify a set of Excel core competencies and five key

skills that are applicable to CPAs across many areas of accounting. The five key skills and their purpose are summarized in Figure 9. Effectively leveraging this technology can increase the efficiency of task completion and enhance professional development. While the competencies and skills discussed in this article were assembled based on firsthand experience, discussions with accounting professionals and other related technology training events, we have merely scratched the surface of Excel’s potential.

We encourage interested readers to seek additional resources to further enhance their Excel skills and to develop more advanced skills, such as utilizing macros for repetitive tasks, performing regression analysis and implementing the solver add-in. Excel University at http://www.excel-university.com is one such online resource that is tailored specifically for CPAs. Additionally, TSCPA offers CPE that targets Excel skills. No matter your background or skill level, online resources and tutorials are available. n


J. Owen Brown, Ph.D., CPA

is an assistant professor in Accounting, Hankamer School of Business, Baylor University. Brown may be reached at [email protected].

Bradley Lail, Ph.D.

is assistant professor in Accounting, Hankamer School of Business, Baylor University. Lail may be reached at [email protected].

Footnote

1. American Institute of CPAs (AICPA). Core Competency Framework and Educational

Competency Assessment. Available at: http://www.aicpa.org/interestareas/

accountingeducation/resources/pages/corecompetency.aspx

Figure 8: LEFT Text Function Figure 9: Excel Skills Summary

Excel Skill Purpose Excel Location/Syntax

Pivot Tables Analyze large data sets with several fields (Excel columns)

Insert Ribbon, Pivot Table

Reference Functions

Locate a specific record within a data set

=VLOOKUP (xx, xx, xx)

Hotkeys Provide shortcuts for executing an Excel task

Logic Functions

Return a value based on the parameters of the logic function

=IF (xx, xx, xx);=IF (AND(xx, xx), xx, xx)

Raw Data Tools

Manipulate raw data into a usable Excel format

Data Ribbon, Text to Columns


Excel in the Workplace: Core Competencies and Practical Applications for CPAs1 When trying to make a decision using Excel, which of the following should

be changed in order to review and compare possible alternative solutions?

A. Raw data inputs

B. Formulas

C. Analysis of the original solution

D. Spreadsheet header

2 Which of the following is not true regarding the use of multi-tab workbooks?

A. Additional tabs create a navigation problem that cannot be solved.

B. Formulas are allowed to link between tabs, making files easier to share.

C. A table of contents tab with hyperlinks and buttons can improve workbook navigation.

D. The user avoids keeping separate linked files open.

3 Using what key (or combination) will toggle between cell reference types

while in a formula?

A. Alt + 4 B. F1 C. F4 D. Ctrl + 4

4 The five Excel skills presented are meant to do which of the following?

A. Analyze a set of data with many rows and columns.

B. Enhance your ability to summarize data, analyze outcomes and communicate results.

C. Enhance spreadsheet internal controls.

D. None of the above.

5 When analyzing pivot table information, why should you be careful around

changing the raw data?

A. You will need to change the Value Field Settings.

B. The table will not automatically update.

C. You will need to use lookup and reference functions on the new data.

D. None of the above.

6 How can you make the VLOOKUP function perform effectively when the

record identifier is repeated?

A. Sort the data.

B. Perform the HLOOKUP function.

C. Change the col_index_num.

D. Use the CONCATENATE function to reference a combined value.

7 What hotkey switches between worksheet tabs left-to-right?

A. Ctrl + pgUp

B. Ctrl + pgDn

C. Ctrl + Up Arrow

D. Ctrl + Right Arrow

8 If you do not have hotkeys memorized, what is an alternative method for understanding how hotkeys are applied?

A. Press the ALT key

B. Hold down the CTRL key

C. ALT+TAB

D. ALT+F4

9 Which of the following is not a key part of an IF statement?

A. Consequence if the criteria statement is true

B. Embedded Function

C. Criteria statement

D. Consequence if the criteria statement is false

10 Which text manipulation function would most efficiently remove excess spaces between characters?

A. LEFT

B. MID

C. CONCATENATE

D. TRIM

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After completing the exam, please mail this page (photocopies accepted) along with your check to: Today’s CPA; Self-Study Exam: TSCPA CPE Foundation Inc.; 14651 Dallas Parkway, Suite 700; Dallas, Texas 75254-7408. TSBPA Registered Sponsor #260.

Answers to last issue’s self-study exam: 1. C 2. C 3. B 4. A 5. B 6. A 7. D 8. C 9. A 10. D

Today’s CPA offers the self-study exam above for readers to earn one hour of continuing professional education credit. The questions are based on technical information from the preceding article.

Mail the completed test by August 31, 2015, to TSCPA for grading.

If you score 70 or better, you will receive a certificate verifying you have earned one hour of CPE credit – granted as of the date the test arrived in the TSCPA office – in accordance with the rules of the Texas State Board of Public Accountancy (TSBPA). If you score below 70, you will receive a letter with your grade. The answers for this exam will be posted in the next issue of Today’s CPA.

To receive your CPE certificate by email, please provide a valid email address for processing.

By J. Owen Brown, CPA, Ph.D., and Bradley Lail, CPA, Ph.D. CPE QUIZ

cpe article excel in the workplace

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