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Data Analytics and Accounting

Author: Moe Harrison /Tuesday, May 19, 2015/Categories: SNI Companies, SNI Financial, Financial Staffing, SNI Certes, Financial Staffing, Accounting Now

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Most accounting professionals are familiar with data analytics, but few are equipped to use data analytics to generate business insights. CFOs recognize that this specialized area offers the opportunity to really drill down into the numbers and uncover patterns that could help predict potential market fluctuations, how the company reacts to those fluctuations, better understand company profitability, or even uncover fraud.

The right person for this job is trained in the use of big data analytical tools and has the ability to spot those emerging patterns - and interpret them. Today more data is available than ever. Uncovering meaningful patterns in the mountains of data requires specialized training.

Take for example, the use of data analytics to uncover fraud in a national call center. Forensic accountants used a well-known test called Benford’s Law to examine the refunds issued by operators. Benford’s Law says that in any list of financial transactions the number one should occur 30.1% of the time and each successive number less than that all the way down to the number nine occurring just under 5% of the time. When the refunds issued were examined, an unusually high number of fours appeared among a few operators. It turns out that company policy required supervisor approval for refunds of more than $50. With spikes in the number of refunds issued just below that threshold the accountants were able to identify a handful of operators who had issued fraudulent refunds to themselves, friends, and family totaling several hundred thousand dollars. That’s a lot of $40 refunds. But, before running the Benford analysis, neither the company nor its auditors had evidence of a problem.

Data analysis is very different from accounting or financial reporting. With the advent of “big data,” getting to the key facts quickly is even more challenging, and ending up with timely and accurate reporting depends on how well you can sift through the numbers without wasting time and effort.

Those fascinated by mathematical patterns and statistics, and with an interest in applying information to better business decisions, the data analytics profession could be very rewarding.

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Moe Harrison
Moe Harrison

Moe Harrison

Moe Harrison is a Regional Vice President with SNI. With more than 15 years’ experience in recruiting and personnel management, Moe has a unique perspective on the top issues and concerns of employers and candidates in the accounting and finance fields.

Other posts by Moe Harrison
Contact author Full biography

Full biography

Moe Harrison is a Regional Vice President with SNI. With more than 15 years’ experience in recruiting and personnel management, Moe has a unique perspective on the top issues and concerns of employers and candidates in the accounting and finance fields.

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