Advances in technology and growth in the availability and accessibility of data gives business leaders visibility into every facet of their organization. Once only available to enterprise-level businesses, modern analytic tools are scalable, user-friendly, and accessible to all who have the knowledge to leverage them. And as these trends continue, financial reporting will demand more from its audits – and the accountants who conduct them.
The Proliferation of Big Data
Audits performed by accountants with a wider range of tools and skill sets will naturally be more comprehensive and provide more actionable insights into the organization. Access to more data and the technologies to process it will expand the scope of what an audit can cover – where previously, smaller samples were used and the results were extrapolated, accountants will now be able to examine the entire transaction history of their organization and search for errors or anomalies. This will then allow them to identify areas of concern and focus on items that present the highest risk. As data and the processing of it grow smarter, each new analysis will learn from the ones that preceded it, building a base of knowledge to better inform future analyses.
With big data, accountants not only have larger pools of data to work with, but also the processing power to manage larger numbers of records. Where machine learning previously used statistical analysis based on a sample of a total data set, the ability to process larger numbers of records and larger numbers of attributes per record brings increases in predictability. This allows analysts to extract and explore behavioral data throughout the day.
Unsorted data external to the accountant’s organization can also be incorporated into the analysis. Factors such as the weather, traffic conditions, economic externalities, and demographics all play a role in an organization’s performance. The ability to include these factors will validate the conclusions drawn from historical data as well as the projections made for the future.
For a master’s in accounting student, this could mean learning to analyze future employers’ transactions as they occur – almost in real-time – and identifying any concerns much more quickly than if they had waited for them to surface during a manual analysis long after the fact. Similarly, the amount of data and the speed in which it’s being processed can increase the availability and reliability of predictive analysis – using historical data to predict the impact of external factors on the organization.
Businesses need not only the conditions that will allow their accountants to experiment with the proliferation of available data, but also the talent to apply the results to real-world problems. New England College has designed its online Master of Science in Accounting program to develop the accounting leaders of tomorrow. The program arms students with the technical skills needed to collect and analyze data, as well as the business skills needed to translate it into the intelligence that will give you and your organization a competitive advantage.