Data Analytics in Accounting: Chapter 1 Overview

Data Availability

The exponential increase of accessible data.

Computerization

Use of computers to automate data collection.

Data Analytics

Techniques to analyze data for decision-making.

Accounting Expertise

Knowledge needed to interpret and analyze data.

Bloom's Taxonomy

Hierarchical model of critical thinking skills.

Higher Order Thinking

Skills like analyze, evaluate, and create.

A M P S Model

Framework for evaluating data analytics process.

Descriptive Analytics

Analyzes what happened in the past.

Diagnostic Analytics

Explores reasons behind past results.

Predictive Analytics

Forecasts future events based on data.

Prescriptive Analytics

Suggests actions based on predictions.

Data Integrity

Ensures data is accurate, valid, and consistent.

Categorical Data

Data that can be divided into groups.

Numerical Data

Data represented by numbers for analysis.

Critical Thinking Skills

Essential skills for analyzing accounting questions.

Data Preparation

Process of cleaning and organizing data.

Data Visualization

Graphical representation of data for insights.

Automation in Accounting

Using technology to streamline accounting processes.

Data Flood

Massive amounts of data generated continuously.

Data Errors

Mistakes or inaccuracies in data sets.

Data Bias

Systematic error in data collection or interpretation.

Overhead Application

Allocating indirect costs to products or services.

Breakeven Point

Sales level where total revenues equal total costs.

Doubtful Accounts

Estimates of uncollectible receivables.

Cost-Benefit Analysis

Evaluates costs of acquiring data versus its benefits.

Data Ownership

Determines who has legal rights to data.

Data Accessibility

Refers to how easily data can be obtained.

PivotTable

Summarizes large datasets without altering original data.

Cash Flow Analysis

Evaluates capital investments using financial metrics.

Internal Rate of Return

Discount rate making net present value zero.

Net Present Value

Difference between present value of cash inflows and outflows.

Histogram

Graph showing frequency distribution of data.

Scatterplot

Graph displaying relationship between two variables.

Regression Analysis

Statistical method for evaluating cost behavior.

What-If Analysis

Assesses impact of variable changes on outcomes.

Goal Seek Analysis

Determines necessary input to achieve desired output.

Benford's Law

Statistical principle for detecting anomalies in data.

Static Visualizations

One-time graphical representations of data.

Dynamic Visualizations

Continuously updated graphical representations of data.

Data Analytics Tools

Software used for preparing and analyzing data.

SQL

Language for managing and querying relational databases.

Excel

Spreadsheet software for data analysis and visualization.

Tableau

Data visualization software for interactive dashboards.

Power BI

Business analytics tool for interactive visualizations.

SAS

Software suite for advanced analytics and data management.