What it takes to become a more valuable accountant
As an accounting practitioner, it’s very likely that you’ve heard these expressions around the office…
What do the numbers tell us?
Let’s dig into the data!
Can we analyze this in real-time?
The industry is buzzing with discussions around big data, data analytics, and even data science. For this reason, data analytics provides a large opportunity to become a more valuable accountant.
What is data analytics?
According to Accounting Today, “data analytics is the science of drawing insights, or conclusions, from raw information sources”.
Types of data analytics
To elaborate on the aforementioned definition, The Journal of Accountancy has divided data analytics into four different types.
- Descriptive analytics: Provides insight based on past information. What is happening?
- Diagnostic analytics: Examines the cause of the past results. Why did it happen?
- Predictive analytics: Assists in understanding the future and provides foresight by identifying patterns in historical data. What will happen? When and why?
- Prescriptive analytics: Assists in identifying the best option to choose to achieve the desired outcome through optimization techniques and machine learning. What should we do?
How does data analytics apply to accountants?
Accountants use all of the different types of data analytics to help businesses uncover valuable insights within their financials, identify process improvements that can increase efficiency, and better manage risk. Below are a few examples sourced from a blog featured by goingconcern:
- Auditors, both those working internally and externally, can shift from a sample-based model to employ continuous monitoring where larger data sets are analyzed and verified. This results in less margin of error and more precise recommendations.
- Tax accountants use data science to quickly analyze complex taxation questions related to investment scenarios. This means that investment decisions can be expedited, which allows companies to respond to opportunities faster.
- Accountants who assist, or act as, investment advisors use big data to find behavioral patterns in consumers and the market. These patterns can help businesses build analytic models that help identify investment opportunities and generate higher profit margins.
Tools and next steps
With the right tools, accounting firms have the capability of leveraging big data. Caseware Analytics offers easy to use data analysis tools that simplify the audit and analysis process, giving you access to the information needed to make better decisions so you can become a more valuable accountant. Learn more about the solution today.