The impact of big data on accounting is as follows:
1. Business Decision Making
With the introduction of automation in the accounting industry, accountants have been detached from repetitive accounting tasks and have taken on the role of business consultants. They are responsible for crafting financing plans for their clients, providing valuable insights.
Big data is also a trusted business advisor. Accountants can utilize big data to help businesses make informed financial decisions based on relevant data sets and also create/form long-term financial strategies.
2. Audit
Audit is an extremely important part of the accounting profession and plays a role in analyzing company assets. However, in the modern world, traditional auditing methods output results that do not match the valuable insights that companies expect.
Big data, combined with data analytics, is changing the process of auditing. The audit process is gradually shifting from sample-based testing to data-driven, population-level audits that encompass all key areas of the organization. Big data provides auditors with structured data in reality. As a result, auditors are able to explore more areas and identify outliers faster.
3. Risk Management
The success of an accounting firm depends on identifying and correcting financial risks. With the help of big data and predictive analytics, certified public accountants (CPAs) are able to anticipate future risks and advise clients on necessary initiatives.
With the processing of big data, CPAs are also able to identify potential fraud. This process does not require human intervention or the use of algorithms on large data sets.
4. Performance
Business performance depends on a variety of parameters such as employees, core processes and budget management. With big data with advanced analytics, business performance can be tracked by identifying new performance indicators (KPIs).
In addition, large data sets also help in recognizing where the market is going and staying ahead of the competition. Using a combination of big data and advanced analytics helps to identify and analyze customer patterns to refine the customer experience.
5. Insights
Data visualization is the process of transforming data into a more perceptible form. By leveraging big data in conjunction with data visualization, it is possible to provide accounting professionals with accounting data that is more visible.