A study from McKinsey Global Institute estimates that Big Data could generate up to $15.4 trillion in value per year in just a subset of industries impacted.
With a wealth of data on their hands, companies are empowered by using data analytics to discover various patterns, investigate anomalies, forecast future behavior, and so forth.
Patterns discovered from historical data enable businesses to identify future opportunities and risks. In addition to producing more value externally, studies show that data analytics affects internal processes, improving productivity, utilization, and growth.
Data analytics plays a very critical role in the future of audit. By using data analytics, auditors are able to spend less time looking for evidence, which will allow more time for presenting their findings and making judgments.
Data analytics also expands auditors’ capabilities in services such as testing for fraudulent transactions and automating compliance-monitoring activities (for example, filing financial reports with the S E C or I R S).
Data analytics helps auditors spend less time looking for evidence, allowing more time for presenting their findings, testing for fraudulent transactions and automating compliance-monitoring activities and making judgments.
In financial accounting, data analytics may be used to scan the environment—that is, by scanning social media to identify potential risks and opportunities to the firm.
Management accountants use data analytics to address specific management questions, such as evaluating the true cost of a product or service, or the best way to allocate overhead.
In tax, data analytics helps support tax calculations and perform tax planning.
Data Analytics is defined as the science of examining raw data, removing excess noise and organizing the data with the purpose of drawing conclusions for decision making.
Data analytics often involves the technologies, systems, practices, methodologies, databases, and applications used to analyze diverse business data to help organizations make sound and timely business decisions.