Financial Report: Auditing

• Financial reporting
• Tax
• Given the fact that operational data abound and are easier to
collect and manage, combined with CEOs' desires to utilize
these data, the accounting firms may now approach their
engagements with a different mindset
• No longer will they be simply checking for errors, material
misstatements, fraud, and risk in financial statements or merely
be reporting their findings at the end of the engagement
• Audit professionals will be collecting and analyzing the

company's data similar to the way a business analyst would to
help management make better business decisions
Auditing (2)
• The audit process will be changed from a traditional
process toward a more automated one, which will allow audit
professionals to focus more on the logic and rationale behind
data queries and less on the gathering of the actual data
• Audits will not only yield important findings from a
financial perspective, but also information that can help

companies refine processes, improve efficiency, and anticipate
future problems
• Data Analytics also expands auditors' capabilities in

services like testing for fraudulent transactions and automating
compliancemonitoring activities
Financial Report
• With the use of so many estimates and valuations in
Financial Accounting, some believe that employing Data
Analytics may substantially improve the quality of the estimates
and valuations
• Data Analytics may also allow an accountant or auditor to
assess the probability of a goodwill write-down, warranty claims
or the collectability of bad debts based on what customers,
investors, and other stakeholders are saying about the company
in blogs and in social media
• It may be possible to use Data Analytics to scan the
environment—that is, scanning Google searches and social
media (such as Instagram and Facebook) to identify potential
risks and opportunities to the firm
Financial Report
• With the use of so many estimates and valuations in Financial
Accounting, some believe that employing Data Analytics may
substantially improve the quality of the estimates and
valuations
• Data Analytics may also allow an accountant or auditor to
assess the probability of a goodwill write-down, warranty
claims or the collectability of bad debts based on
what customers, investors, and other stakeholders
are saying about the company in blogs and in social
media
• It may be possible to use Data Analytics to scan the
environment—that is, scanning Google searches and social
media (such as Instagram and Facebook) to identify potential
risks and opportunities to the firm
• Traditionally, tax work dealt with compliance issues based on

data from transactions that have already taken place
• Now, tax executives are charged with sophisticated tax
planning capabilities that assist the company to minimize its
taxes and do it in such a way as to either avoid or prepare for a
potential audit
• Tax data analytics valuable for its ability to help tax staffs to
predict what will happen rather than reacting to what just did
happen
STEP 2: MASTERING THE

DATA
STEP 1: IDENTIFY THE QUESTION
• Begins with understanding a business problem that needs
addressing
STEP 4: ADDRESS AND

REFINE RESULT
• Having a concrete, specific question that is potentially
answerable by Data Analytics is an important first step
• Requires one to know what data are available and whether

those data might be able to help address the business problem
• Need to know everything about the data, including how to
access, availability, reliability (if there are errors), and what time
periods are covered to make sure the data coincide with the
timing of our business problem
• Data analysis is iterative
• Slice the data, find correlation, make questions, revise and rerun
the whole process (analysis) until the results ready
• Digital dashboards and data visualizations are particularly helpful
in communicating results
• Once the results have been determined, insights are formed by

decision makers and are communicated to others
DATA ANALYTICS SKILLS NEEDED BY

ANALYTIC-MINDED ACCOUNTANTS
• Some outcomes will be continuously tracked perhaps via monthly

reports or a digital dashboard.
While accountants do not need to become data scientist, they

must know how to do following:
• Clearly articulate the business problem the company is facing,
• Communicate with the data scientists about specific data needs
and understand the underlying quality of the data.
• Draw appropriate conclusions to the business problem based on
the data and make recommendations on a timely basis.
• Present their results to individual members of management
(CEOs, audit managers, etc.) in an accessible manner to each
member
16

ANALYTIC-MINDED ACCOUNTANTS (2)
Which leads to 7 analytical skills that analytic-minded accountants
should have:
1. Develop an analytics mindset—recognize when and how data
reports or a digital dashboard.
DATA While accountants do not need to become data scientist, they

must know how to do following:
ANALYTICS
SKILLS• Clearl
NEEDED
y articulate theBY ANALYTIC-
business problem the company is facing,
• Communicate with the data scientists about specific data needs
MINDED andACCOUNTANTS
understand the underlying quality of the data.
• Draw appropriate conclusions to the business problem based on
the data and make recommendations on a timely basis.
• Present their results to individual members of management
(CEOs, audit managers, etc.) in an accessible manner to each
member
16DATA ANALYTICS SKILLS NEEDED BY

Which leads to 7 analytical skills that analytic-minded accountants
should have:
1 . Develop an analytics mindset—recognize when and how data
analytics can address business questions.
2. Data scrubbing and data preparation—comprehend the
process needed to clean and prepare the data before analysis.
3. Data quality—recognize what is meant by data quality, be
it completeness, reliability, or validity
4. Descriptive data analysis—perform basic analysis to
understand the quality of the underlying data and its ability to
address the 17 business question.
5. Data analysis through data manipulation—demonstrate ability

to sort, rearrange, merge and reconfigure data in a manner
that allows enhanced analysis.
6. Define and address problems through statistical data analysis
— identify and implement an approach that will use statistical
data analysis to draw conclusions and make recommendations
on a timely basis.
7. Data visualization and data reporting—report results of
analysis in an accessible way to each varied decision maker
and his or her specific needs.
18

Financial Report: Auditing

Uploaded by

Copyright:

Available Formats

Financial Report: Auditing

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Financial Report: Auditing

Uploaded by

Copyright:

Available Formats

• Financial reporting

• Audit professionals will be collecting and analyzing the

• Audits will not only yield important findings from a

financial perspective, but also information that can help

• Data Analytics also expands auditors' capabilities in

• Traditionally, tax work dealt with compliance issues based on

STEP 2: MASTERING THE

STEP 4: ADDRESS AND

• Requires one to know what data are available and whether

• Once the results have been determined, insights are formed by

DATA ANALYTICS SKILLS NEEDED BY

• Some outcomes will be continuously tracked perhaps via monthly

While accountants do not need to become data scientist, they

DATA ANALYTICS SKILLS NEEDED BY

DATA While accountants do not need to become data scientist, they

16DATA ANALYTICS SKILLS NEEDED BY

5. Data analysis through data manipulation—demonstrate ability

You might also like