Data Analytics is changing the audit and the way that accountants look for risk. Now, auditors can consider 100 percent of the transactions in their audit testing. It is also helpful in finding anomalous or unusual transactions. Data Analytics is also changing the way financial accounting, Managerial accounting, and taxes are done at a company. (LO 1-3) The IMPACT cycle is a means of performing Data Analytics that goes all the way from identifying the question, to mastering the data, to performing data analyses and communicating and tracking results. It is recursive in nature, suggesting that as questions are addressed, new, more refined questions may emerge that can be addressed in a similar way. (LO 1-4) Eight data approaches address different ways of testing the data: classification, regression, similarity matching, clustering, co-occurrence grouping, profiling, link prediction, and data reduction. These are explained in more detail in Chapter 3. (LO 1-4) Data analytic skills needed by analytic-minded accountants are specified and are consistent with the IMPACT cycle, including the following: (LO 1-5) e Developed analytics mindset. e Data scrubbing and data preparation. “page 26 e Data quality. — e Descriptive data analysis. e Data analysis through data manipulation. e Statistical data analysis competency. e Data visualization and data reporting. We showed an example of the IMPACT cycle using LendingClub data regarding rejected loans to illustrate the