International Journal of Accounting & Information Management

Big data, digital demand, and decision-making

Steve Green, Earl McKinney Jr., Kurt Heppard, Luis Garcia,
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Steve Green, Earl McKinney Jr., Kurt Heppard, Luis Garcia, "Big data, digital demand, and decision-making", International
Journal of Accounting & Information Management, https://doi.org/10.1108/IJAIM-02-2017-0019
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 Big Data, Digital Demand, and Decision-Making

Steve G. Green, DBA

Professor
United States Air Force Academy
Department of Management
HQ USAFA/DFM
2354 Fairchild Drive, Suite 6H-130
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USAF Academy, CO 80840-5099

Phone: 719-333-8316
Fax: 719-333-9715
[email protected]

Earl McKinney, PhD

Professor
Bowling Green State University
College of Business Administration
337 Business Administration Building, Room 332
Bowling Green State University, OH 43403-0001
Phone: 419-372-8336
[email protected]

Kurt A. Heppard, PhD

Professor
United States Air Force Academy
Department of Management
HQ USAFA/DFM
2354 Fairchild Drive, Suite 6H-130
USAF Academy, CO 80840-5099
Phone: 719-333-8316
Fax: 719-333-9715
[email protected]

Luis Garcia, PhD

Professor
Bowling Green State University
College of Business Administration
337 Business Administration Building, Room 353
Bowling Green State University, OH 43403-0001
Phone: 419-372-7812
 [email protected]

ABSTRACT

Purpose

This paper discusses the viewpoint that Big Data’s major impacts on the accounting
community will be changes in consumers’ demand of accounting data and its impact
on decision-making. Big Data is leading consumers to prefer more atomized (not
summarized but rather reduced to discrete units), reconfigurable, and transparent
accounting data that they can combine into their own structures to meet their
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own decision-making needs. Consequently, consumers will demand digital goods

that are less static, and summarized.

Approach

This paper discusses the strategic shift to what is referred to as “indirect data” and
develops a model that helps explain “how” and “why” Big Data’s impact may have on
this change in consumer digital demand.

Findings

There are many evolving Big Data opportunities associated with the shift in
consumer demand for more atomized, reconfigurable, and transparent accounting
data that are discussed in this paper including; strategic capability, auditing,
performance measurement and reporting, standardization, and education.

Value

This paper provides a discussion of the evolving opportunities of the relationship

that is created by a strategic shift in the type of digital goods consumers of
information, specifically decision-makers, will demand as well as the potential
impacts on the accounting community.

Key Words: Big Data, accounting information, accounting data, decision-making

Article Classification: Viewpoint

 INTRODUCTION

Big Data has quickly been added to our popular business lexicon; perhaps in part
because it so vividly describes the vast amount of data that users, or consumers,
have available. In fact, some feel that Big Data and its associated analytics have
already permeated all aspects of decision-making and strategy (Griffin and Wright
2015) and will continue to make significant changes to accounting (Warren, Moffitt,
and Byrnes 2015). Others have focused on the decision-making process and
exploring the correct balance between subjectivity and objectivity when dealing
with vast amounts of data (Bertei, Marchi and Buoncristiani 2015). For the
accounting community, prior to the advent of Big Data, the static and summarized
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data associated with financial reports and audits have been its primary digital
product. As Big Data becomes more commonplace demand will shift to atomized
(not summarized but reduced to discrete units), reconfigurable, and transparent
accounting data that consumers can use for their specific purposes. Big Data is
creating this shift in consumer demand for accounting digital products, and this
change will lead to new opportunities for accounting practitioners and scholars.

We are proposing that the advent of Big Data will create an enormous demand by
decision-makers for a new type of accounting digital product. We specify the
strategic implications of this shift and propose a model that helps explain “how” and
“why” Big Data’s impact may have on this change in consumer demand. We
conclude by presenting several possible evolving Big Data opportunities of this
change for the accounting community.

BACKGROUND

Big Data is the result of two trends: 1) the cost of storage has plummeted and, 2)
revolutionary ways to analyze and interpret data have rapidly emerged. As a
result, mind numbing amounts of data are flooding the world. Eric Schmidt the
CEO of Google said that every 48 hours we create as much data as we did from the
dawn of civilization to 2003 (Siegler 2010). Also, each day Facebook produces 10
Terabytes (TB) of data, Twitter contributes another 7 TB, and Google processes
24,000 TB of data (Bollier 2010; Delen and Demirkan 2013). Finally, with the
emergence of a wide-variety of other types of devices including RFID (radio-
frequency identification) chips, smart-controls on building, and other logistics
systems-related interfaces and devices: Big Data implications become vividly
apparent (Mishler 2015).

Big Data has many operational definitions. In general, it often describes the
information systems and activities which accumulate, retrieve, and examine
enormous quantities of data. Big Data has also been defined as, “…dynamic, large
and disparate volumes of data being created by people, tools and machines.” (Ernst
 & Young Global Limited 2014, 2). The digital goods associated with Big Data
systems are often characterized by huge volume, rapid velocity, and great variety
(McAfee and Brynjolfsson 2012; O’Leary 2013). Many argue that a fourth “v”
relating to the veracity, or quality, of the data should also be considered
(Mazzei, Ramlukan, and Sharma 2015). But whatever definition is used to describe
Big Data, most agree that it not only looks at classic concepts of accounting data
such as transactions, but it also includes a “new world of interactions and
observations” that are forcing decision-maker to change their perspective (Setty and
Bakhshi 2013, 1).

While the data available are growing at almost inconceivable rates, the main
sources have remained relatively the same over that past decade —from scientific
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advances such as the mapping the human genome and global climate; from
communications —every tweet, post, click, like, email, comment, search and digital
media files; and from the healthcare industry with blood tests, MRIs and hospital
visits. However, a fourth source of data may make the others seem almost
insignificant. Estimates suggest that the number of devices that generate or store
data —e.g. mobile devices, Radio Frequency Identification (RFID) chips or sensors,
will soon total more than several trillion (Nedeltchev 2015). An evolving concept
that captures these disparate types of data is often referred to as the “Internet of
Things”; which promises to make Big Data even more relevant to decision-makers.
While many definitions of the Internet of Things are being offered, it is often
associated with the vast amount of structured, semi-structured, and unstructured
data in the form of image, textual, social media, and even behavioral data that we
continue to collect, disseminate, or store. Another indicator of the true potential
impact of the Internet of Things is that some predict that the world-wide market for
addressing it has been estimated to reach $7.1 trillion by 2020 (Press 2014).

While it appears clear the era of Big Data has arrived, its implications and
opportunities for accounting are much less clear. We suggest that accounting will
continue to produce static, and summarized accounting data, but that consumer
demand for accounting data that is atomized, reconfigurable and transparent and
will grow much more rapidly. In order to frame the relationship between Big Data
and the many different consumers of accounting information, we have developed a
model that addresses direct and indirect digital goods. We also recognize that there
are a variety of different internal and external stakeholders that have a vested
interest in the quality and quantity of data and information. But we feel regardless
if they use accounting data static and summarized, or dynamic and atomized, their
ultimate goal is enhanced decision-making and the ongoing changes in the Big Data
landscape is ushering in new and different demands for accounting digital goods.
 We see this impact of Big Data on accounting as similar to the disruptive impact of
IT on other industries where well-trained professionals create digital goods for a
very large consumer marketplace; professions such as music, journalism,
advertising, television and healthcare (Bhattacharjee, Gopal, Marsden and
Sankaranarayanan 2011; Dolata 2011). A classic example of a disruptive
technology was the iPod. Prior to the iPod, consumers had little choice in the
structure of the music produced by the recording industry— songs were made
available in a particular order on one product —the long play (LP) music album
followed by the compact disk. After the iPod’s widespread adoption consumption of
music output changed, consumers had the opportunity for self-service and created
their own structures, their own playlists. While other factors also contributed to
major changes in the industry, the iPod changed the relationships among providers
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and consumers in the music marketplace.

There are other examples of a technology that supported end-user self-service,

which have had a similar impact on the relationship between producers and
consumers of digital products. It is common knowledge that the new digital
photography options changed relationships between producers and consumers in
the photography industry, web aggregators changed relationships among producers
and consumers in the news marketplace, search engines changed relationships in
the advertising marketplace, video streaming changed the relationship between
producers and consumers of video entertainment, and electronic healthcare changed
relationships within the healthcare marketplace. In each domain a new technology
fundamentally changed consumer demands, often nullifying incumbents’
competitive advantages (Sabatier, Craig-Kennard, and Mangematin 2011; 42, 78).
While these changes have unique elements, collectively they suggest that
technology can unexpectedly disrupt relationships between consumers and
producers of digital goods. But while these examples illustrate the impact of Big
Data on the changing demands of various layman consumers of digital goods,
experts may be more agile in capitalizing on the changes. For example, professional
accountants may exhibit more adaptive capacity, and be much more facile in using
atomized Big Data for their specific uses and are much better postured to create
information that will enhance internal and external decision-making.

With this background, we proceed to develop a model that helps explain “how”,
“what”, and “why” Big Data will lead to a shift in consumer demand for indirect
accounting digital goods.

HOW: ACCOUNTING OUTPUT WILL SHIFT TO INDIRECT DATA

To understand how Big Data is changing consumer’s demand we need to adopt a

customer’s viewpoint and consider how the quantitative output of accounting
activities, which we refer to as accounting digital goods, are used and labelled.
Historically these digital goods, including numbers on financial statements, were
 the results of internal financial activities, the aggregation of transactional records,
and adjustments made both internally and externally and were direct inputs to
decision-making. The consumers of these direct digital goods include a variety of
both internal and external stakeholders. Internally, the financial accountants that
record transactions, track payables, receivables and capital assets, manage cash,
address taxes, and eventually prepare financial reports all will experience changing
digital goods demands. Also, internally, managerial accountants, as direct users of
accounting information, will be impacted by Big Data as they accumulate costs,
manage cost behavior, measure performance, set prices, and assist in internal
strategic decision-making. Externally there are countless consumers of these direct
static digital goods and Big Data will impact the demands of all of them including;
investors, competitors, and the various different government agencies and
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regulators. Currently these internal and external stakeholders predominately

consume digital goods that are summaries of activities and are treated as static,
finished information. We refer to this direct use of digital goods as the direct
accounting process in Figure 1.

With the inception of modern quantitative and statistical analysis, as well as data
analytics, a second, indirect, use of accounting digital goods is becoming more
significant. In this second method, the quantitative output of accounting activities
is not directly used for decision-making, but instead it was manipulated and
combined in data analysis prior to decision-making. This indirect use of accounting
output is shown in the bottom row as the in Figure 1. Figure 1 also indicates how
the data associated with non-accounting Big Data enters the indirect method and is
analyzed in the indirect process.
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FIGURE 1: Accounting Output Model - Two Most Common Accounting

Processes using Accounting Digital Goods

In the top row of Figure 1, the direct use is a simplified representation of the
process of activities where financial transactions are transformed, or stored, into
accounting data then summarized into accounting information to be used directly by
individuals to make decisions. The most common examples of accounting output as
information that is directly used in decision-making are the well accepted financial
statements such as balance sheets, statements of cash flows, and income
statements. Our consumers use these static and summarized finished goods
without extensive reconfiguration of the accounting data. It is static, not
dynamically reconfigured by analysis and it is summarized, not atomized (reduced
to discrete units) in nature.

In the bottom row of the model in Figure 1, the accounting data is stored in a
database and subsequently analyzed. This analysis is often an interactive self-
service where the data is reconfigured by filtering, sorting, reclassifying, combining
and other analytic activities. New data is created. When stored as data these
accounting digital goods can be the input to many subsequent analyses. The result
of the analysis activity is information because it is used for decision-making. In this
final information step in the bottom row of the model in Figure 1, consumers put
 the data “into formation.” In other words, they create their own information for
decision-making. This data in the bottom row, before it is put into formation, is
atomized, transparent, and reconfigurable.

For example, the digital goods in the bottom row may begin in the left box of
accounting data as a list of exceptions in an audit. This data is then subsequently,
and perhaps repeatedly, analyzed looking for patterns that may indicate fraud. If
the data can be put into a conclusion that fraud exists that is information and the
decision-making process begins. Prior to this decision-making, the data is
atomized —it is not summarized, it is as specific and narrow as possible, it is simply
the original details of the transaction. The data is reconfigurable —because it can
be transformed into more meaningful measures or combined with other sources of
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data to create more helpful insights. Finally, the data is transparent —because it is
atomized (not summarized but rather reduced to discrete units) and the process to
create it is likely self-evident, not obscured behind layers of summary.

In the top row of the model in Figure 1, the quantitative output of accounting
activities are not subsequently recombined, restructured and analyzed, as was the
case in the bottom row. In the top row accounting professionals did most of the
processing of data, in the bottom row the consumer is doing most of the processing
of data.

While both processes have been in use for many years, the storing and analyzing
activities in the bottom row have become so efficient with Big Data systems that the
result is a far greater demand for accounting output as data that can be stored and
analyzed. Big Data has rapidly accelerated the trend toward the indirect use of
accounting output.

Our position is not that all the output of accounting activities will follow the bottom
row process, that this is a zero-sum game, or that the top row will occur less often
than in the past. Rather we propose that the advent of Big Data will rapidly
increase the demand for accounting digital goods that are atomized, reconfigurable,
and transparent. As a result, the emphasis in accounting will shift from the upper
right side of Figure 1 —supporting decision-making to now include an equal
emphasis on the lower left side —creating valuable digital goods that can ride the
wave of Big Data.

Figure 1 also highlights a distinction we make between data that enters the model
on the left and information that leads to decision-making on the right. If an output
of an accounting activity is further manipulated by a machine, we call this data. If
the output of an accounting activity is used by an individual to create meaning for
decision-making we call this information. Information is shown in Figure 1 in the
final box before decision-making. This distinction is analogous to the distinction
 between raw materials and finished goods —accountants produce both raw data
material, and finished information goods.

Before considering the implications and opportunities of a shift of accounting

information from finished information goods to raw data material, it is helpful to
consider the etymological distinction between information and data as used in the
model in Figure 1. Most accountants, like others that produce data or information,
assume the common definitions of these terms; data are captured facts and
processed data become information. Accounting digital goods judged by individuals
in the activity of making a decision are appropriately referred to as accounting
information.
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By this definition accounting produces information. Here we suggest that

accountants take the point of view of the consumer and impose a useful distinction
between the data that the end user receives from accountants and the information
they create for their own decision-making. From the accounting perspective, the
accounting output that are the result of their activities, are often called accounting
information. Advancements in IT, and particularly accounting IT which is also
commonly referred to as accounting information systems (AIS), have made data not
only more available, but more malleable as well. But the lack of precise definitions
for IT, AIS, data, and information has restricted the potentially rich research area
of the intersection of accounting and IT (Murthy 2016).

If we become more consumer-centric it becomes apparent why accountants should

prefer to call it data. In common use, data are facts, or numbers, or news regarding
some differences or, more simply, a lack of uniformity (Floridi 2005). In scientific
use, data are defined as facts (Galland 1982; Laudon and Laudon 2012), numbers
that stand for an object or event (Knight and Silk 1990), measures, or symbols that
relate to events (Martin and Powell 1992).

To accountants who want to store, recombine, restructure and analyze output; the
output appears to be accounting data. The key is to see the relationship from the
consumers’ perspective. For people inside the accounting profession using their own
labels, the distinction between data and information is much less apparent.
Financial data that are used directly in decision-making are information, these data
play a semantic role, accounting output is information because they are processed
data that are meaningful; financial statement data are meaningful to stakeholders
who use that information to make decisions. In other words, if a decision is being
made, information is being considered. But many organizations lack the resources
to efficiently exploit this new available data and often conclude that Big Data is too
expensive to utilize and turn to data warehouses or cloud databases as alternatives
(Smith 2016).
 Finally, not only is the term data theoretically correct for the bottom row of the
model in Figure 1, it is also increasingly used in the accounting community. Recent
Big Data accounting-related research almost exclusively refers to accounting output
as data (Nixon and Burns 2012; Al-Khouri 2012; Van Harmelen and Workman
2012). Also, current Big Data books (Franks 2012; Sathi 2014) refer to accounting
output as data. Regardless of what semantic label is attached to it, indirect, direct,
information, or data; accounting output has meaning and value because of the
potential to enhance decision-making.

WHY: BIG DATA WILL LEAD TO MORE FREQUENT INDIRECT USE

In Figure 1, our model of direct and indirect use of accounting information is offered
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to explain how customer demand is changing; here we consider why Big Data will
accelerate this change in demand. In short, this change in consumer demand is due
to accounting digital goods increasingly taking on the characteristics of Big Data.

One characteristic of Big Data that will increase indirect use is velocity. Some
experts predict that Big Data will enable every financial transaction in the United
States to be recorded and analyzed in real time (Liu 2013, Titera 2013). Not only
can all the transactions be evaluated, an audit can happen in real time as the
transactions are occurring, not at the end of a month or year. If discrepancies are
occurring, a real-time assessment can identify them. Real time analyses of large
volumes of financial transactions are already occurring (Moffitt and Vasarhelyi
2013; Zhang, Yang, and Applebaum 2015). Credit card companies detect unusual
card use on the spot and require consumers to personally verify the purchase on the
telephone or in some other way before it will accept the charge. In sum, the velocity
of Big Data will increase demand for atomized real time data, waiting for the end of
the month or end of the quarter to roll up accounting data into summarizes will be
in less demand. Enabled by IT, companies now have available accurate financial
performance reports (Smith 2016).

A second characteristic of Big Data that will increase demand for indirect use is
variety. Big Data comes from a variety of sources and in a wide variety of formats
(McAfee and Brynjolfsson 2012). In contrast to traditional data systems, Big Data
is designed to accommodate unstructured text, sensor data, audio, video, click
streams, and log files as data. Big Data systems can handle dates in different
formats, different rules about missing data values, and free-form text and audio,
video, graphic data, social media, product reviews, quality standards, consumer
sentiment, and even political risk data. In the past, some accounting data were not
easily stored and analyzed as different rules, different meanings, and different
methods were used to produce them. O’Leary (2013) suggests that Big Data will be
able to integrate financial data from blogs, message boards and social media
discussions with traditional accounting data to create more accurate assessments of
financial performance or condition and to enhance audits. The development and
 use of XBRL (eXtensible Business Reporting Language) is an example. In an effort
to make data machine readable, XBRL standards enable atomized accounting data
to be created and recombined on a large scale. With the capacity of Big Data to
store and analyze unstructured data, such as notes, textual assumptions, and
methods used, more accounting data, including the notes and assumptions recorded
by accountants in the process of creating the data, will be stored and analyzed more
than ever before.

Finally, Big Data systems are designed to support self-service end user analysis.
Historically, data systems that supported analysis typically required an IT analyst
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to create queries and structured reports (Lycett 2013). In contrast Big Data
systems typically feature drag and drop, simple interfaces, and intuitive objects and
operations. Big Data systems are designed and sold on this self-service interface.
Removing the IT analyst and getting the domain expert to interact with data is an
explicit strategy to enhance interaction with the data that will lead to more
frequent and pronounced discovery (Mullich 2013). This self-service aspect of Big
Data systems will increase the demand for more reconfigurable and transparent
data that can be mixed and matched with other sources of data by the end-user
without extensive knowledge about how the accounting data were created or
summarized.

EVOLVING BIG DATA OPPORTUNITIES

There are many evolving opportunities associated with the shift in consumer
demand for more atomized (not summarized but rather reduced to discrete units)
reconfigurable and transparent accounting data. We are not proposing that
demand for traditional direct structured accounting output will cease, in fact it
might not even be reduced. Our position is that the shift to more indirect use will
generate new opportunities for accounting in the areas of strategic capability,
auditing, performance measurements and reports, standardization, and education.
These general areas are offered as a sampling of the possibilities of how the shift
will impact accounting, not a comprehensive collection of expectations derived from
published studies.

Strategic Capabilities

The growing demand for raw data goods will transform the accounting and IT
functions in an organization into dynamic capabilities and become a source of
competitive advantages for an organization (Teece, Pisano, and Shuen 1997; Zahra,
Sapienza, and Davidsson 2006). This is in part because the internal analysis of
accounting data is unique to the organization and cannot be purchased from factor
markets or easily replicated by other organizations (Helfat and Peteraf 2009). The
 unique characteristics and resources of these accounting and IT functions offer
opportunities for performance advantages because of the unique combinations and
depictions of accounting data they offer decision makers that are only available
within the organization. This exclusiveness can provide the basis for performance
advantages which are not easily replicated.

To the extent that these functions are unique to their organization and create
opportunities to process data, they represent opportunities for competitive
advantage (Zollo and Winter 2002), making the accounting function an essential
dynamic capability (Teece, Pisano, and Shuen 1997).

Auditing
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As Big Data fuels growth of demand for accounting data, we feel there will also be a
growing demand to verify the data. This in part describes the audit function. The
accounting community has become increasingly concerned about the quality of
audits, especially regarding risk assessment standards (Barlas 2016). It could be
argued that the huge volumes of often unverifiable data that is associated with Big
Data could exasperate the concern for the quality of audits because accounting data
are increasingly more ubiquitous, more complex in structure, and increasingly
enabled with the ability to interact with the many different web-based entities
(Vararhelyi, Kogan, and Tuttle 2015).

Big Data provides the opportunity to greatly expand this and affords assurance on
other types of data. According to Gazzaway (2014), this new data environment
should lead accounting to consider changing audit standards to give investors and
creditors what they really need —verified data. This perspective views Big Data as
a valuable compliment to traditional audit evidence (Yoon, Hoogduin, and Zhang
2015) while helping auditing with assessing risk (Cao, Chychyla, and Stewart
2015).

As the demand for accounting data that is atomized (not summarized),

reconfigurable and transparent, new auditing opportunities will occur in a variety
of contexts. For example, the prospect of continuous auditing offers a particularly
interesting potential implication for this growth in demand (Baksa and Turoff
2011). The Institute of Internal Auditors (IIA) views the purpose of continuous
auditing as providing roughly simultaneous assurance that can significantly
increase efficiency and insight gained through audits (IIA 2015). Some feel the
demand for real-time financial reporting coupled with the emergence of real-time IT
capabilities and analytic software are all influencing the adoption of continuous
auditing (Brannen, 2006; Kuhn and Sutton 2010). Continuous auditing also holds
the promise of more effectively addressing fraudulent activities.
 Finally, Alles (2015) reinforces our position that auditing will be impacted by the
Big Data driven increase in demand for raw accounting data calling it a “strategic
necessity for business” which is becoming “…equally essential for auditors…” (Alles
2015, 442). Alles (2015) continues to mirror our position by describing that the
demand for indirect dynamic unstructured data will drive Big Data adoption by
auditors by stating that there exists, “…a demand rather than supply side
argument for why auditors will end up using Big Data – not because they
necessarily value the analytical power of Big Data, but because their clients do.”
(Alles 2015, 442).

Performance Measurements and Reporting

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Consumers will increasingly rely on atomized (not summarized but rather reduced
to discrete units), reconfigurable, and transparent data to create their own unique
measures of individual performance and reporting requirements, rather than use
summarized and static reports. Krahel and Titera (2015) suggest that, “Aggregation
and arbitrary allocations made on static, paper-based financial statements are
artifacts of a bygone era of high transmission costs and slow data collection speeds.”
(Krahel and Titera 2015, 410).

As participants in the data marketplace exchanging digital goods, accountants will

have many new opportunities to create innovative reports. These reports will
surely require customized or nontraditional measures of business output or success.
When accounting outputs are stored as data they can more readily be used for
reports alongside the plethora of other business data. For example, accounting
output can be combined and enriched with new potentially low-cost, high-value
measures such as type of product in inventory, location of inventory, supplier and
age of the inventory (Moffitt and Vasarhelyi 2013). These new report formats and
new data visualization techniques might feature dynamic slice and dice aspects,
drill down capabilities, and even three dimensional formats (Titera 2013).

Raw accounting data will play a key role in measuring and reporting performance.
Big Data is making available huge amounts of real-time structured and
unstructured data that are atomized and reconfigurable that meets the demand for
custom developed performance measures. Ideally, these performance metrics should
be aligned with organizational goals. One performance measurement framework,
the Balanced Scorecard (Kaplan and Norton 1996) is a time-proven widely-accepted
performance measurement and management control system that identifies and
measures financial and non-financial performance. The Balanced Scorecard’s
effectiveness can be greatly enhanced by leveraging the use of atomized,
reconfigurable and transparent accounting data in all four of its major categories of
measurement; financial, internal processes, learning and growth, and customer
perspective (Kaplan and Norton 1996) Malleable indirect data would allow more
 precise, relevant, and customizable reports for a host a different metrics in all four
major categories.

Another example of an increasing internal demand for atomized, reconfigurable and

transparent accounting data to support performance measurement involves
budgeting. Budgets have been criticized for being too intra-organizational with
their data use, hampering accurate forecasting. Many companies are turning away
from traditional budgeting techniques and toward what some refer to as beyond
budgeting which reconfigures ERP (Enterprise Resource Planning) data enhanced
by Big Data (Bourmistrov and Kaarboe 2013).

Finally, as the demand for atomized (not summarized), reconfigurable, and

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transparent data increases, the potential for accountants to be involved in

organizational performance assessment increases as well. Some argue that Big
Data has placed accountants in an excellent position for strategic performance
analysis via what he refers to as recursive partitioning (Cokins 2014; Packard and
Cokins 2015). This assessment technique uses customer cost and profit data to
determine patterns of profitability of existing customers to identify the
characteristics of potentially more profitable future customers (Packard and Cokins
2015).

Standardization

Our model in Figure 1 suggests that with the advent of Big Data, there will be a
great deal of raw atomized (not summarized but rather reduced to discrete units),
reconfigurable and transparent data, much of it will be considered non-standard.
Teaching accountants how to address and use this new onslaught of non-standard
data may prove to be challenging. While the academic community has recognized
the need to integrate Big Data and related IT and AIS topics into the curriculum,
few instructional resources are currently available (Sledgianowski, Gomaa, and Tan
2016).

Creating new reliable and robust standards will be increasingly significant to the
accounting community. They will need to help provide standards for this new
atomized data and make it more useful while keeping the constraints and
possibilities of existing and future IT capabilities in mind. We feel the value that
accountants can create via standardization is illustrated through two domains;
international reporting standards, and reporting language standards. In each of
these domains, raw data —data that is atomized (not summarized), reconfigurable
and transparent data are already rapidly emerging.
 Internationally, the ability of accountants to effectively analyze data across
countries for global firms demonstrate the value accountants can produce via
standardization. Analysts will require greater comparability and consistency in
working with accounting data involving new raw data across national boundaries.
For example, while the Cost of Goods Sold has a generic definition; it has different
meanings in different countries, different languages, and for different
organizations. To address this concern, the global accounting community has set
out to create a single global-wide accounting standard referred to as the
International Financial Reporting Standards (IFRS). For a host of technical and
political reasons, there have been substantial roadblocks toward accomplishing this
goal of adopting a single international accounting standard. However, there has
also been considerable progress made toward global financial report comparability
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(Barth, Landsman, Lang, and Christopher 2012). The problem arises when
standards setters approach the difficult task of determining the appropriate level of
detailed guidance to achieve sufficient comparability and consistency for financial
statements. In other words, as more data becomes atomized, and as analysts seek
to reconfigure it with other data, this may only exasperate this major international
issue.

The shift in customer demand that we describe will increase the need for a
reporting language standard. As our model in Figure 1 demonstrates, producers
and consumers of accounting data are all looking for competitive advantage through
increased efficiency. We feel as the demand for atomized (not summarized),
reconfigurable and transparent data grows, and expands globally; perhaps the
implications involve the individual data, themselves. In part, this is because to
create traditional summarized and static financial reports, which are still in great
demand, there are increasing costs associated with manual processing of the
individual data. Following this reality, Big Data will only increase those costs
because of the onslaught of the additional accounting data demanded which will
eventually require more labor. Christopher Cox, former SEC Chairman, describes
this situation:

“Right now, thousands of people in financial firms across America are going
through the time-consuming, laborious task of sifting through paper, text,
and HTML reports. They're keyboarding data from static SEC reports into
more useful formats, so they can actually use it.... It is so 20th century.” (Cox
2005)

The accounting and IT professions’ answer to this dilemma is in part eXtensible

Business Reporting Language (XBRL). XBRL is a business reporting “markup”
system similar to the UPC code on labels that adds contextual information to
business data (XBRL International 2016). The power of XBRL in this context is
that it provides financial reporting that is agile and reconfigurable while offering
increased transparency and control (XBRL International 2016). Using XBRL allows
 consumers of accounting data to analyze and compare apparently static financial
statements with those of other XBRL-formatted statements in any format the
consumer prefer because the data is actually “intelligent” or interactive (XBRL
International 2016). For example, many current static reports are all merely
different versions of a paper document. But interactive XBRL data can increase
internal control and reporting efficiency, while improving external analysts’ options
by instantly making the data searchable and retrievable using any software
desired. Also, according the SEC Chairman Cox, “Interactive data can make the
SEC a far more effective regulator, by helping us focus on preventing fraud, not just
reacting to it.”(Cox 2005).

But XBRL is not a panacea or without controversy. Successful XBRL adoption will
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depend upon the development and acceptance of a comprehensive and robust XBRL
taxonomy which will serve as a dictionary to define the accounting terms used to
tag the data found in financial statements (Brands 2011, 2012). Similar to its
negative impact on IFRS, the vast size of Big Data will exasperate XBRL
implementation issues. Yet with regards to standardization, we feel that the
widespread adoption of XBRL with a comprehensive taxonomy shows incredible
promise to organizations trying to gain competitive advantage by recognizing the
dynamic capability associated with best addressing the increase in demand for
accounting data that is atomized, reconfigurable and transparent.

Education

To better prepare students and professionals to succeed in a Big Data-rich business

environment, both formal academic education and continuing professional
education will need to be updated or upgraded. Recognizing this need, there are
ongoing research efforts that are investigated integrating Big Data and IT into the
accounting curriculum (Sledgianowski, Gomaa, and Tan 2016).

We feel one change should focus on the difference between data and information as
shown in our model. The disconnect between knowing the data is available and
making good information for decisions from it can create a type of information
anxiety (Worman 1989, 34). Students need curricular changes that can help them
understand how data becomes information for decision-making and how to have
confidence in their ability to create this information.

Also, the potential flood of Big Data will create other issues that will be particularly
difficult to address in the classroom. Vasarhelyi, Kogan and Tuttle (2015) feel that
assurance will require “audit by exception” and consequently will require
accounting students to develop a higher tolerance for ambiguity. In addition,
Varsarhelyi, Kogan and Tuttle (2015) feel that Big Data will precipitate substantive
change in accounting education to include an increase in the statistical and IT
 curricula. Cao, Chychyla and Stewart (2015) call for students to receive more
training in data analytics.

Students will also need more education and training with IT fundamentals to better
understand how databases are directly and indirectly constructed so they can be
audited, edited, and manipulated in response to various requirements and
opportunities. In addition, students will need training in a broader skill-set
including the ability to recognize “false positives”, measurement theory, induction,
technical skills and the role of professional judgment in statistical and data driven
analysis (McAfee and Brynjolfsson 2012). Koch (2015) believes students will also
need to develop “Big Empathy Skills” that compliment Big Data technical skills. Big
Empathy means learning to understand the relationships and impacts of change on
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the decision-making process (Koch 2015, 62). Frustrating improvement efforts in

these types of student-centric improvement efforts is that universities tend to lack
the IT infrastructure and human resources required to align improvement efforts
with hard to measure outcomes and problematic objectives such as critical thinking
and employability (Dede, Ho, and Mitros 2016).

Also, Big Data that is reconfigurable has lowered the cost and raised the rewards
for experimentation that result from manipulating data and other analytics. As a
result, education and training will need to include principles of data
experimentation and how to make careful and reasoned analysis of promising
implications and opportunities. This includes the ethical considerations that might
arise while investigating with, or using Big Data. Higher education must stay
vigilant to the fact Big Data research may reveal human information, behaviors and
practices that may have compounded unintended, but potentially damaging,
implications including privacy and consent concerns usually addressed at
Institutional Review Boards (IRBs). (Tijerina 2016)

Finally, we feel accounting education will need to emphasize critical thinking skills.
These skills include the ability to understand the limits of measurement,
representation, indetermination and induction on analysis.

CONCLUSION

In this paper we discuss a strategic shift in the type of digital goods consumers of
information, specifically decision makers, will demand. We suggested a model that
helps explain “how” and “why” Big Data’s impact may be on that shift to what we
call indirect data. We feel with the arrival of Big Data, customers of accounting
output will increasingly seek atomized (not summarized but rather reduced to
discrete units), reconfigurable and transparent data rather than finished
information goods. This shift in preference will significantly change the
relationship between producers of accounting data and their consumers. Decision-
making consumers of accounting data will increasingly demand indirect raw data
 goods that they can combine into their own structures to perform their own analysis
and analytics.

The impact of Big Data on the accounting community is just beginning and more
research is needed to better understand the implications and opportunities.
Research involving the measurement of actual practices and the attitudes of the
various internal and external consumers of direct and indirect digital goods should
be conducted; as well as the impacts of various stakeholders including investors and
regulatory agencies. We recognize that each of the opportunities we discuss will
generate more questions. But if we take the perspective that consumers are
shifting their demands, we can better understand and improve how we adapt and
address these changes..
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