Introductory Accounting – ACCT2100YA

DATA ANALYTICS & ACCOUNTING

Slides derived from Financial Accounting: Tools for Business Decision-

Making; Eighth Canadian Edition Material Resources
Overview of Performing Data Analysis
• Defining the question that you wish the data to answer
• Collect the data from a source or various sources
• Clean and scrub the data to ensure accuracy and integrity
• Analyze the data to establish patterns, relationships, answers
• Convert findings into sharable reports or visualizations
Data Typologies
• Structured data
o Most common source of data – data that is stored in defined fields in arrays composed of columns
and rows. Includes excel or spreadsheet data.
• Unstructured data
o Not well defined or reliably structured. Includes text messages, emails, images, etc.
• Raw data
o Data that has not undergone any processing. Information that has not been assembled or organized.
Data that has not been structured or provides little benefit in current form.
• Derived data
o Data that has undergone processing – such as compilation, computations, aggregation. Raw
data that has been refined to provide a benefit to the user.
• Dark data
o Data or information that a company already collects, but does not use.
Structured Data Example
Data Integrity
• Data integrity is the accuracy, completeness, and quality of data.
• Threats to data integrity:
o Human error
o Inconsistencies across format
o Collection error
o Cybersecurity or internal privacy breaches
Data Mining
• Art of extracting information or knowledge from data
• Involves sorting through large data sets to identify patterns and relationships
• Allows uses to better predict future trends
• Two types of techniques:
o Predictive: designed to extrapolate new information based on present information -
used to forecast outcomes.
o Descriptive: designed to bring out information that is present but buried in a mass
of data – used to find associations between data points (i.e. products, customers,
seasonality's).
Data Analytic Approaches
• Developed analytics:
o Objective insights to supplement and guide human decision-making
o Data records (such as online sales records) are used to compare competing courses
of action or identify the strongest determinants of outcomes of interest

• Emergent analytics:
o Use of data to drive automated processes
o Continuous streaming of data to make real-time responses and process controls
(such automated cars)
Types of Data Analysis
• Descriptive analysis: identifies what has already happened
o Analyzing events that have already taken place; answers what happened.
• Diagnostic analysis: focuses on understanding why something has happened
o Helps to draw correlations between the issue and factors that may be causing it – seeks to
answer why something happened.
• Predictive analysis: allows you to identify future trends based on historical data
o Uses past or current data to forecast or predict what will happen next.
• Prescriptive analysis: allows you to make recommendations for the future
o Uses real-time data to make decisions in real-time.
Data Use in Accounting
• Because accountants are immersed in financial systems that contain various
transactional data, they can use data analytics or big data to provide users with
information to help with decision making.
• Benefits to accountants and analysts can include:
o Monitoring inventory information in real-time
o Apply industry benchmarks to financial ratios
o Can be used in audit to detect potential fraud or errors
o Use predictive data to create budgets or forecasts
Sharing Data Insights
• Reports or Summaries
• Data visualizations
o Typically done using data dashboards (via excel, PowerBI, Tableau)
o Dashboard or visualizations can be static or interactive
Dashboard Example
Ethics and Data Analytics
• Misinformation
o False information that is spread, regardless of the intent to mislead
o ”Garbage in, garbage out”
• Disinformation
o Deliberately misleading or biased information; manipulated narrative of fact
• It is important to identify and isolate biases before analyzing date to create
insights