Data and its impact on accounting

Question 1

What does technology enable accountants to do?

Answer 1

Technology enables accountant to be more forward-looking, rather than always producing reports based on the historical calendar.

Question 2

Why will technology not replace accountants?

Answer 2

Machines will increasingly perform the repetitive, routine tasks but this frees up human accountants to focus on more critical thinking tasks.

Question 3

Which fundamental and routine accounting task will technology likely replace human accountants for?

Answer 3

Bookkeeping - collecting, storing and aggregating data. However, interpreting and giving judgments based on the data will remain a human task.

Question 4

What will the essential role of accountants continue to be?

Answer 4

Value creation.

Question 5

Why do accountants need to upskill?

Answer 5

To adapt and work with the latest technology and be skilled in working with artificial intelligence, robotics, and intelligent process automation.

Question 6

What are the key roles for today’s accountants?

Answer 6

Operators, Stewards, Catalysts, Strategists.

Question 7

Define data analytics:

Answer 7

Data analytics (DA) is the process of examining data sets in order to find trends and draw conclusions about the information they contain.

Question 8

How are data analytics technologies and techniques used?

Answer 8

They are used to generate insights from business data which enables organisations to make more-informed, data-driven business decisions.

Question 9

What is an example of accountants applying data analytics?

Answer 9

Accountants who act as investment advisors use big data to find behavioural patterns in consumers and the market which helps businesses identify investment opportunities and generate higher profit margins.

Question 10

What are the 4 types of data analytics insights?

Answer 10

Descriptive analytics, Diagnostics analytics, Predictive analytics, Prescriptive analytics

Question 11

Define descriptive analytics:

Answer 11

Asking ‘what is happening?’ e.g. amount of sales over a given period.

Question 12

Define diagnostic analytics:

Answer 12

Asking ‘why is this happening?’. Accountants will analyse historical variances because it can be an excellent indicator of future performance.

Question 13

Define predictive analytics:

Answer 13

Asking ‘What’s going to happen?’. Accountants will use data to assess the likelihood of future outcomes and build forecasts.

Question 14

Define prescriptive analytics:

Answer 14

Asking ‘What should happen?’. Accountants use the forecasts they create to make recommendations which involves producing the budgets.

Question 15

What is an example of accountants using all four types of data analytics?

Answer 15

Descriptive: Sales have dropped 5%
Diagnostic: Sales have dropped by 5% because…
Predictive: Sales will continue to drop if there are no changes made.
Prescriptive: How to prevent sales from continuing to drop and instead, increasing them again.

Question 16

What is an emerging role?

Answer 16

Data scientists/ Analytics translator.

Question 17

Why must finance and accounting professionals learn to communicate with data scientists?

Answer 17

So they can translate data into business insights.

Question 18

Why do accountants make excellent data scientists?

Answer 18

1. Accountants have outstanding technical skills.
2. Accountants are natural-born problem solvers.
3. Accountants see the larger context and business implications.

Question 19

What does the jump from descriptive and diagnostic analytics to predictive and prescriptive analytics require?

Answer 19

It requires that accountants shift to an inquisitive mindset; and shift to figuring out how to use that information to make key business decisions.

Question 20

How must organisation’s finance functions respond to the increased use of technology?

Answer 20

They need to assess and prioritise tasks and processes for automation then identify the areas most likely to be ‘de-skilled’.

Question 21

How can the development of technology assist organisation’s finance functions?

Answer 21

It allows them to develop new ways to communicate and measure value and success, including advanced data analytics. This results in moving beyond descriptive statistics to predictive and prescriptive analytics, data visualization, and “storytelling.

Question 22

Do accountants need to be data scientists or applied mathematicians?

Answer 22

No, they just need to be able to ask the right questions.

Question 23

What data-related skills do accountants need to develop?

Answer 23

1. Develop skills in data analytics e.g. obtaining a professional certification.
2. Develop a data-oriented mind-set.
3. Focus more on innovation and adaptability.

Question 24

What general skills do future accountants require?

Answer 24

1. Enhanced communication and relationship- management skills.
2. The ability to think critically.
3. Strategic management/thinking skills.
4. Enhanced risk management skills.

Question 25

What analysis techniques do accountants need competence in?

Answer 25

Accountants need competence in regression, correlation and segmentation analysis, as well as other analytical techniques.

Question 26

What is cybersecurity?

Answer 26

Anything related to the storage or transmission of data.

Question 27

How does the role of accountants incorporate cybersecurity?

Answer 27

1. Data governance - accountants must protect the privacy of data.
2. Custodians of data - accountants must know how to keep data safe.
3. Accountants must manage the lifecycle of financial and non-financial data.
4. Accountants must ensure compliance with regulations.