Auditing

Auditing is a "systematic process of :

1. Objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and

2. communicating the results to interested users." 1, 2

<<MAKE VIDEO>> 

Audits must better embrace technology. Technology will enhance the quality, transparency, and accuracy of audits.

"It's a massive leap to go from traditional audit approaches to one that fully integrates big data and analytics in a seamless manner." 3

Management accounting

Management accountants :

1. Are asked questions by management,

2. find data to address those questions,

3. analyze the data, and

4. report the results to management to aid in their decision making.

Management accountants are data analysts!

Financial reporting and financial statement analysis

Many financial statement accounts are based on estimates. Accountants ask the following types of questions related to these estimates.

• How much of the accounts receivable balance will ultimately be collected? What should the allowance for loan losses look like?

• Is any of our inventory obsolete? Should our inventory be valued at market or cost? When will it be out of date? Do we need to offer a discount on it now to get it sold?

• Has our goodwill been impaired due to the reduction in profitability from a recent merger? Will it regain value in the near future?

• How should we value contingent liabilities like warranty claims or litigation? Do we have the right amount?

Tax

Tax executives must develop sophisticated tax planning capabilities that assist the company with minimizing its taxes in such a way to avoid or prepare for a potential audit. This makes tax data analytics valuable for its ability to help tax staffs predict what will happen rather than react to what just did happen.