Why the power of data is in the analysis Journal of Accounta

Why the power of data is in the analysis

Journal of Accountancy Discussions” – a link to a journal will be provided through Moodle the expectation is to write a 12-15 sentence on your thoughts. Does it apply to your current work situation, have you had experience or examples, do you agree or disagree with the article. THEN provide feedback/comment to at least 2 student. This is all done on-line. Please post your initial response by Thursday of the week due and student comments by Sunday. Remember this is graded please correct grammar, write in complete sentences, and provide detailed information.

https://www.journalofaccountancy.com/news/2016/may/power-of-data-and-analytics-201614427.html

Here are four ways finance can help improve an organization’s approach to harnessing its data:

1. Determine the best metrics to track. Organizations shouldn’t embark on a data-analysis initiative because others are doing the same. They should develop goals for how the data will be used, and those goals should be small at first. The RGRTA has streamlined maintenance costs by installing sensors in its fleet of about 350 buses. An alert is sent when a bus is due for preventive maintenance. The system “triggers us to say, ‘OK, bus 919 needs to come in for service tonight,’ ” Adair said.

Cammarata is focusing first on improving the company’s month-end close. That involves not only looking at structured data from the company’s ERP system but also talking with other departments. “System data doesn’t really tell a story; it doesn’t tell you why,” she said. “We had to go looking for context.”

2. Make sure the data are “clean.” Even data that come from sophisticated software might have flaws. Adair recommended making sure the information received is accurate and relevant. “You’ve got to make sure that data going in is scrubbed and clean,” he said. “You can very easily make bad decisions if you’ve got bad data.”

“You can’t follow data blindly,” Eric Hansen, CPA, CGMA, partner and COO at BKD LLP in Springfield, Mo., said in an interview. “You need to take the data, validate it, and use good intuition from a savvy and experienced business perspective to come up with good answers.”

3. Use the full functionality of available tools. Insight is sometimes a few keystrokes away but right under the nose of an organization. Why? Because not every employee takes the time to learn about software, the same way many consumers use only a fraction of the features on smartphones. “That’s one place where accountants could get more data to analyze, by looking at what systems are in place, then using them to their full potential to collect data,” Cammarata said. “Most of us don’t even scratch the surface.”

4. Don’t be scared by the term Big Data. For small or midsize entities, Big Data can sound daunting, Cammarata said. “You don’t need a lot of data, or a data center, to do data analytics,” she said. “We all have access to data, and data analysis can improve decision-making.” Data analysis has been in practice for many years, she said, well before companies were able to store and collect massive amounts of information.

Editor’s note: Adair and Hansen were among the panelists in the discussion “Technology, Data Analytics, and the Professional Accountant” on Sunday at the AICPA spring Council meeting in New Orleans.

Solution

Data Analysis-Its also known as data analytics. It is the process of transforming the gathered data into useful information in a manner for the organization. Analysis is done as it helps in decision making, but what if its big. Mounds of data needed to be arranged and gathered in the database. But Finance helps a lot and acts as a catalysts I would say and is important to analyse data in a better way. According the \"Journal of Accountancy\" -

i) Determine the best metrics to tracks- Here measures are taken for the assessment example - the RGRTA installed the sensors in buses which helped in order to get the details as data.

ii) Make sure the data is clean- data needed to be surely cleaned as it may have flaws as well and cant be followed easily. Validated data only give the right information.

iii) Use full functionality of the available tools- accountants easily learn the software which will help to analyze the data in better way.

iv) Dont be scared by the term Big data- Big mounds of data are being stored from the beginning so no worries, data will be stored as easily collected massive amount of information and retrieved as well.