Big data refer to prodigious data. This is data that has been collected over time. It is mostly done by data mining companies that collected enormous information online. Data analytics is the process of interpreting and understanding data through scientific means. This is done to specifically understand the inclination of data in a particular direction which might be a decline or an increase. When we consider big data and data analytics and try to engage with accounting, it has tremendous positive and negative impacts.
The data dominates the issuing of loans. This is because individuals’ information is assessed before any loan can be remitted. It is mostly done through examination and analyzing data that they feed the Internet. Report about their current and previous finance history is examined through the help of accountants, and the right decision is met. This is through diagnostic analysis, which tries to understand why the person needs a loan and what is its purpose. Without the help of accountants, this might be impossible.
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Big data add so much strain to accountants. This is because it is thriving very fast technology continues to grow. They do not have a chance to swing on their arm chairs. Their services are needed daily. This is because businesses need their assistant so that they are able to grow financially. It is easier to predict with within the next few years; big data will have grown to a huge amount. Although accountants are working and will have to toil for more hours, their continued efforts will be of great value in the business world. This is an added advantage to the business organizations.
Through data analytics, accountants can understand customers buying tactics. This is promising through the data analysis that makes it possible to how the clients do their buying, how they advise others and most of the platforms the user manipulate to engage with organizations. Through the assistance of the descriptive analytics, financial institutions are able to know which products are mostly bought. They then go ahead to determine why customers make such decisions and what will happen soon together with what the institution should do to so that to attract more customers and sell more.
Data analytics will require the most specialized knowledge. This is due to the growth of big data. Whenever there are advancements in technology, more information is added to the universe. With this information, more insight will be needed to interpret the date efficiently without errors, which might stain the process and lead to poor analysis. This means that accountants require more advanced education, and they will need to be more professional in their devoted tasks.
Big data and data analytics helps in the taxation. This is because the taxation organizations for the help of accountants will be able to use the already harvested data to know if they should increase or reduce the taxes. All this is done computationally. This saves the institution a lot of time from going through the manual way.
Through data analytics, companies are able to take complete advantage in their business realm. This is done by amortizing insight from the accountants after they have scientifically analyzed and presented data in graphs and pie charts. This is because they can now be capable to have a real picture of their operation and the customers’ desires. They are also able to know the needs that have been left unanswered, invent new machineries or brand their products to cover the market well and attain a greater market share.
Big data might lead to the misuse of information in data analytics. This can happen due to the fact that as data increases, there is a positive correlation on complexity. This means that more knowledge and time will be needed if the data is to produce valuable information. Accountants get access to all types of information from the customers. They can be possible mishandle the privacy policies on their data. If there is a misuse of data, then it posits that the results will be negative, and it will be of no purpose and business organizations will not benefit from it. Accountants will need to learn new ways that will make them more professional in the way they handle data.
Accountants are inventing cheap and efficient ways to gather and use data. They are installing cameras in offices so that they can monitor behavior and after their observations, they are able to do their analysis. This has been made possible by the availability of computers and other useful gadgets, which are being sold on low prices due to the advancement of technology. By devising these new ways, they are able to attain quality information and use it to the best of their knowledge to revive their institutions.
Data analytics should be prioritized in all businesses. This is because without the use of the accountants’ knowledge, businesses will find it hard to survive or grow at all. In fact, businesses that are ignoring this sector will not be able to make to their goals since they cannot benefit from customers’ feedback based on the products and services they sell. The strategy to utilize client’s data is a necessity in any type of business. If organizations take good use of this area, then they will be in a position to benefit the most in their endeavors.
Big data is sourced from the social media sites. These are the places where most people interact with and gets to reach to the world. Most of these social media such as Facebook, Twitter, WhatsApp among others, are the platforms where business advertises their products and services and gets to reach a wider audience. In these sites, the data analytics accountants are able to get the data they need most in the analysis and giving feedback to the institutions in which they work.
Data analytics uses different methods to analyze the data. These methods a highly unique to their practice and are more professional in the application. These methods include visualization of patterns and trends, which is done after analysis and is mostly done through graphical means of data presentation. There is also the statistical analysis which deals with analyzing quantitative data and also the model fitting and building strategy. With these strategies, the accountants are able to appropriately handle customers’ information and utilize it scientifically.
Big data is important in various ways. It is used in detecting any cases of lying in the business realm. It is also used by business in foreseeing the risks and it in turn help them in making sound decisions on how to counteract the risks and operate in ways that will maximize the profits. By doing this, the business can work in ways that are less risky and prevent circumstances that might cause the business to collapse. This is a very crucial purpose of using the data.
Big data is vital for better management in an organization. This is because the data reveals very important patterns in an institution (Appelbaum et al., 2017). This information is in turn used to the advantage of the business. It portrays where most of the finance in an institution goes to and how it can better be handled so that the institution will benefit the bests in the business world. For example, it shows the trend on profit and loses together with the commodities that are preferred more by consumers. With this, it propels the business into functioning in its best capacity.
Analysis of big data helps in detecting cases on fraud in an organization. This is propagated by the fact that the accountants can trace any missing information or any amount of money that is important for the business. This make the analysis of data to be very critical if the business is to yield profits. The accounting books will show all the cash sales and the recorded amount of money in total. When the accountants do the analysis, they can detect if the data that has been entered is truthful or not. This will finally impact the growth of the business.
Big data is important in that it assist in calculating the business risks. This is because it shows all the trend in the business operation. When the data is analysis properly, it can show the future expectation in the business and instigate more planning to counteract the risks that have been evidenced by the research. If the risks are recalculated early enough, it means that the business will know where it stands and how its operations are being affected by the business world.
Big data analysis can impact the generation of coupons to customers. This is because the data can clearly show how various customers interact with the business (Richins et al., 2017). It can show trends in how often the customer buy and how much money they spend during a certain period. With this information, the institution can accurately determine the right customer who will be given a shopping coupon. For example, this can be done if the business is promoting its customers so that to encourage them not to quit.
Through data analysis, the business can determine the major causes of defects and failures. This is made possible through the data analysis by the competent accountants. They can know how consumers influence one another and which platforms they use together with what makes them to spread any negative information against the institution’s will. This is mostly done after data mining because the accountants have all the information about customers. If the business is able to know the major causes of its failure which is mostly linked with the risk, then it will be better equipped with the knowledge on how to improve.
Businesses which do not consider big data and data analytics will fail in the future. This is because all the decisions in an institution should be data driven rather than decisions being done from consulting few individuals who very basic accounting knowledge. With the current generation, people are shifting from traditional methods of accounting to more current and professional means. For example, there are certain tools for data analysis that organizations must use that are more digital and they perform with minimum errors, that is if there are errors, and are fast.
Big data has a major impact on accounting. This is because the data is gradually being integrated in the accounting paradigm. For example, in the video and audio accounting frameworks. This shows that the data is important and that it should be prioritized because the accountants have proved that it is essential in their operations. We have even seen organizations installing cameras in the offices so that they can well monitor peoples’ behavior and gather important information that will help the business to thrive well.
Big data analysis has an impact in the managerial accounting. This has been shown by the fact that the professional managers are gradually changing the way they make the information valuable. This is through insightful decision making and making use of the benchmark metrics that will transform the accounting platforms (Richardson & Shan, 2019). When these changes are incorporated into accounting, it means that the businesses will profit more and accurate decisions made will affect the institutions operations positively and impact more growth.
Data analysis methods vary depending on the organizations’ needs. This is based on the notion that organizations are not alike and by this, it means that they will not data in similar ways. These methods include; analyzing the data statistically, model fitting and building and the visualization of patterns and trends of the data. An institution chooses the method that will make them realize the best of the data that they want to analyze (Richardson & Shan, 2019). For example, pattern and trend visualization can help a business in determining their impact in the total market share.
Big data analysis has an impact in auditing. This has been shown by auditors managing their clients using the database-to-database systems that are based on the new technology. This was not the case during the traditional ways of maximizing the benefits of consumers’ data. This big step by the auditor manager will transform the business world (Salijeni et al., 2019). They have shown how profiting the big data can be, only if the data is used and handled well be professional accountants. This is a huge progress that must be noticed and accredited.
Big data analysis has also changed the accounting standards. This is because in this era, most people feed their information online using the Internet, from asking various sensitive questions to uploading their photos to medias such as Facebook among others. With this, the accountants handle very sensitive information from their client. This information need to be used in discrete and the privacy protected in all means viable (Trom & Cronje, 2019). This makes the accountants to label the data in ways that will not show that the information is from a certain customer. For example, this is done by using numerical numbers when representing a certain class of information. Alphabets are also used.
Data analysis is done using different methods of analysis. These includes; descriptive analysis, predictive analysis, diagnostic analysis and prescriptive analysis. Descriptive analysis goes by what the name means. It refers to the classification of data in various classes or categories. For example, the analyzing total profits in sales within an organization and also the revenue. The predictive analysis is done after diagnostic analysis and it entails prediction the future trends in the business based on certain areas such as taxes among others. For example, forecasting that the business will experience more sales based on the current data analysis.
In conclusions, big data and data analytics in accounting should be always prioritized. This is because it majors the big effect when a business is to undergo any improvement and experience growth. Although big data is important, it can also lead to the downfall of an institution. This can happen if organization is not making use of the data and basing its decision on the data. Advance tools must be used which some businesses that are in the infancy stage might not be able to buy. This is a great disadvantage to institutions that sell their products online.
References
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