Contemporary Technologies & Data Analytics

Question 1

What is Data?

Answer 1

Data is raw material to be organised for subsequent analysis and relates to facts, events and transactions (eg. Numbers, letters, symbols), that has been recorded but not yet processed into a form suitable for use. Data can be quantitative or qualitative.

Question 2

What is Data Processing?

Answer 2

Data processing is the conversion of data into information. The conversion process can be manual or automated, and transforms data into information by bringing related pieces of data together, summarising data, tabulation and diagrammatic techniques, statistical analysis, financial analysis.

Question 3

What is Information?

Answer 3

Information is data that has been processed in such a way that is meaningful to the user. Information can be quantitative, qualitative, financial and non-financial.

Question 4

What is Primary Data?

Answer 4

Primary data is obtained directly from first-hand sources by means of surveys, observation and experimentation. It has been previously published and is derived from a new or original study and collected at source. It is any data which is solely used for the purposes for which it was originally collected.

Question 5

What is Secondary Data?

Answer 5

Secondary data has previously been collected or researched. Sources include the internet, libraries, company reports, newspapers, governments. It allows the researcher to see other opinions in their area of study, but care must be taken to ensure the data is reliable and accurate. Secondary data is collected for other purposes but can also be used for the purpose at hand.

Question 6

What is Nominal Data?

Answer 6

Nominal data is used for naming or labelling variables without any quantitative value. There is usually no intrinsic ordering to nominal data, eg. Blood type, gender, eye colour. Nominal data can only be classified.

Question 7

What is Ordinal Data?

Answer 7

Ordinal data is a data type with a set or scale to it. However, it does not have a standard scale on which the difference in variables is measured, eg. Happiness levels, customer satisfaction leves, Likert scale. Ordinal data can be classified and ordered.

Question 8

What is Discrete Data?

Answer 8

Discrete data is non-continuous. It can only take certain values, eg. Number of students taking AC205. Discrete data is counted.

Question 9

What is Continuous Data?

Answer 9

Continuous data is unbroken data that has no gaps. Continuous data can take on any value (within a range), eg. Time or distance. Continuous data is measured.

Question 10

What is Descriptive Analysis?

Answer 10

Descriptive analysis gives an idea of the distribution of the data. It helps detect anomalies and enables the identification of relationships between variables, eg. Histograms, frequency tables, bar charts, calculation of mean, mode, average, standard deviation. Descriptive analysis summarises the characteristics of a data set.

Question 11

What is Inferential Analysis?

Answer 11

Inferential analysis uses a random sample of data from a population to describe and make inferences about the population. inferential analysis allows you to test a hypothesis.

Question 12

What are the 3 Internal Sources of Information?

Answer 12

Accounting System
Payroll System
Strategic Planning System

Question 13

What is an Accounting System?

Answer 13

An accounting system is data sorted and analysed by coding system, by type of expense, department, manager, job, etc. Reports are produced at regular intervals to help managers plan and control costs. Examples include invoices, timesheets, journal entries.

Question 14

What is a Payroll System?

Answer 14

A payroll system is details of labour costs. Hours paid may be analysed into productive and non-productive time (training, sick leave, holiday, idle time).

Question 15

What is a Strategic Planning System?

Answer 15

A strategic planning system is information regarding an organisation’s objectives and targets. Assumptions about the external environment may be detailed. It may contain details of an organisation’s capital investment programme, product launch programme, etc.

Question 16

What is Internal Information?

Answer 16

Internal information is sources from financial accounting records and other systems closely tied to the accounting system. It is usually operational in nature, but can include one information on customers and suppliers.

Question 17

Benefits of Internal Sources of Information

Answer 17

Readily available
Data can be easily sorted and analysed
Reports can be easily produced when required
Data relates to the organisation concerned

Question 18

Limitations of Internal Sources of Information

Answer 18

Data may need to be further analysed to be of use to a management accountant.

Question 19

What are 4 External Sources of Information?

Answer 19

Government sources
Business contacts
Trade associations and trade journals
Financial and business press, and other media

Question 20

What are Government Sources as Information?

Answer 20

Government sources are information on many aspects of nations’ economy, population, manpower, trade agriculture, price levels, capital issues. Data is secondary as its primary purpose is to provide planning data for government. Data is typically broad based and general.

Question 21

What are Business Contacts as Information?

Answer 21

Business contacts are customers (requirements: product specifications, quality, delivery periods, packaging preference, etc) and suppliers (quantity discounts, volume rebates, product availability, technical specifications).

Question 22

What are Trade Associations and Trade Journals as Information?

Answer 22

Trade associations and journals represent member firms in legal and other disputes, provide quality assurance, lay down codes of practice, publish trade journals and the majority of industries have their own trade associations.

Question 23

What are Financial and Business Press as Information?

Answer 23

Financial and business press are statistics, financial reviews, business and economic news and commentary.

Question 24

Benefits of External Sources of Information

Answer 24

Wide expanse of external sources
Easily accessible
More general information available
Can source specific information needs

Question 25

Limitations of External Sources of Information

Answer 25

Data may not be accurate Finding relevant information can be time consuming

Question 26

What is a Sampling Technique?

Answer 26

The purpose of a sampling technique is to gain as much information about the population by observing only a small proportion of that population.

Question 27

What is a Population in Data Analytics?

Answer 27

A population is all the items under consideration in a particular enquiry.

Question 28

What is a Sample in Data Analytics?

Answer 28

A sample is a group of items drawn from that population. The population may consist of items such as metal bars, invoices, packets of tea, etc. It need not be people.

Question 29

Why is Sampling Necessary?

Answer 29

The whole population may not be known The process of testing every item can be extremely costly (time and money) The item being tested may be completely destroyed in the process

Question 30

What is Digitisation?

Answer 30

Business takes old analogue (paper-based) information and converts or re-codes it into electronic digital format - IT can store, process and transfer information.

Question 31

What is Digitalisation?

Answer 31

Digital technologies are used to alter some business processed (eg. Email, social media, instant messaging, video calls).

Question 32

What is Cloud Computing?

Answer 32

Cloud computing is the use of computer-based resources, eg. Servers (physical or virtual), data storage and applications hosted remotely at a data centre and managed by a dedicated provider. Forms can opt for a pay-as-you-go as a mechanism to reduce or manage IT costs. Also reduces barriers to entry, global accessibility to data/systems, opportunities for scalability. Issues include data protection, privacy and service availability.

Question 33

What is Big Data?

Answer 33

Big data is large and complex data sets which have emerged from new areas within the business and were not traditionally considered worthy on analysis. The opportunity for accountants to extract meaning and value from data to contribute to risk management and performance management.

Question 34

What are Data Analytics and Tools?

Answer 34

As the majority of data generated is unstructured, it is difficult to store and use. Data analytics referees to the process of transforming this data into usable information that is potentially beneficial for decision making.

Question 35

What is Artificial Intelligence?

Answer 35

Software applications use algorithms to make decisions within firms, often using and analysing real-time data from multiple sources. They can propose decisions or actions based on revelations from the data analysed, that would have taken accountants considerable time and effort to do so.

Question 36

What is Robotic Process Automation?

Answer 36

Similar to AI, RPA automates certain routine tasks using software robots or AI workers, normally performed by employees, allowing them to focus their attention on more critical business activities - increasing efficiency and productivity, reduced cost and improved customer satisfaction. Used in areas such as data entry, invoice processing, expense reporting, financial planning and forecasting.

Question 37

What is a Blockchain?

Answer 37

A blockchain enables safe and transparent storage of financial information and transactions. Uses blocks to store data, which are linked together using chains. As each block includes information about the block that preceded it, it essentially forms a chain connecting the blocks. Once a particular piece of data is recorded, it becomes part of a chain. Any subsequent changes to the data can break the chain, disrupting the system. It facilitates the automation and verification of transactions, reducing the scope for error, fraud and disputes.

Question 38

What is Cryptocurrency?

Answer 38

Established in mid-2010s, cryptocurrency is an intangible digital token recorded via a distributed ledger. It can be used to settle outstanding debts rather than traditional currency. Users have various rights such as a medium of exchange or ownership, and are owned by the entity that owns the ‘privacy key’ - typically over 50 digits in length, are only known to the owner. By permitting access to the edger, the ownership of the token can also be transferred.

Question 39

What is Cryptocurrency? cont.

Answer 39

The underlying technology is blockchain, that enables secure person-to-person exchange, without the requirement for an intermediary (eg. Bank). When any physical asset is secured via a digital means, it is encrypted and stored in a personal digital wallet, accessible from any digital device using the private key. A small but increasing number of firms such as Gucci, Microsoft and Starbucks now accept payment using digital currencies.

Question 40

How is the General Strategic Role in Digital Business changing for the Management Accountant?

Answer 40

Digital strategy development or process digitalisation is within the business partner role, but with skills and competencies in the digital world. As well as understanding the business model pursued, a working knowledge of technologies and any other potential technologies is required. A working knowledge implies management accountants appreciate how various technologies work, what the limitations are and how the technology can be implemented and used. It also means being able to identify whether the technology can add value to the business (eg. Improve performance, reduce cost, increase efficiency).

Question 41

How is the General Strategic Role in Digital Business changing for the Management Accountant?

Answer 41

Digital strategy development or process digitalisation is within the business partner role, but with skills and competencies in the digital world. As well as understanding the business model pursued, a working knowledge of technologies and any other potential technologies is required. A working knowledge implies management accountants appreciate how various technologies work, what the limitations are and how the technology can be implemented and used. It also means being able to identify whether the technology can add value to the business (eg. Improve performance, reduce cost, increase efficiency).

Question 42

How is the Role in Technology Sourcing and Management changing for the Management Accountant?

Answer 42

It’s becoming a more active role, a ‘critical friend’ within the management team as data analytics feature more in decision making. Becoming ‘data stewards’ through scorekeeping and controlling roles, ensuring data is accurate, maintained and used correctly and outputs are checked. Management accountants need the knowledge and skills around analytics, and also trust their professional training and experience.

Question 43

How is the Role in Security, Privacy and Ethics changing for the Management Accountant?

Answer 43

The role of a management accountant is in cyber security, data security (GDPR) and disaster recovery. As firms operate digitally and/or digitalise business processes, the risk from information systems or data loss is much greater (eg. Cybercrime).

Question 44

How is the Role in Risk Management changing for the Management Accountant?

Answer 44

Risk management can be defined as how an organisation detects, protects from, responds to and recovers from risk events.

Question 45

How is the Role in Governance changing for the Management Accountant?

Answer 45

Governance concerns how an organisation is led and how managers are held to account. While management accountants have had a role in risk management and governance in organisations in the traditional sense, the risks have increased due to technological advancement, which have knock-on effects for governance. Whether the management accountants is part of the management team or acting in a more advisory role, again a working knowledge of digital risk management tools is important.

Question 46

Characteristics of Big Data: Volume

Answer 46

The quantity of data produced is driven by internet, smartphones, social media, sensors and other digital technologies all helping to create big data (eg. Customer loyalty cards, increasing use of sensors in business - monitoring energy use, motion, occupancy, etc).

Question 47

Characteristics of Big Data: Velocity

Answer 47

The speed at which real-time data is being steamed into organisations. To make data meaningful it needs to be processed in a reasonable time frame.

Question 48

Characteristics of Big Data: Variety

Answer 48

Modern data takes many different forms. Structured data (numerical data) and unstructured data (images, videos, call centre recordings, emails, social media). Processing of unstructured data requires significant investment.

Question 49

Characteristics of Big Data: Veracity

Answer 49

Veracity refers to truthfulness. Although the volume of data available is greater than before, for that data to be beneficial for decision making, it has to be reliable. Hidden biases in data could present significant risk to an organisation.

Question 50

Characteristics of Big Data: Value

Answer 50

Value refers to the usefulness of data to the business. The insights gained from data can inform decisions and add value to a business.