ACG 3842 - Accounting Applications of Data Analytics CH 1

Chapter 1: Ask the Question: Using Data Analytics to Address Accounting Questions

Critical Thinking

A manner of thinking that employs curiosity, creativity, skepticism, analytics, and logic.

Bloom's Taxonomy

A hierarchical view of critical thinking and learning skills, consisting of six levels: (1) Remembering, (2) Understanding, (3) Applying, (4) Analyzing, (5) Evaluating, and (6) Creating.

Where Machines Excel

Machines excel at the lower-level thinking skills of (1) Remembering, (2) Understanding, and (3) Applying.

Where Accountants Must Play

Accountants must focus on higher-level thinking skills such as (4) Analyzing, (5) Evaluating, and (6) Creating.

Descriptive Analytics

Analysis that seeks to answer what happened or what is happening.

Diagnostic Analytics

Analysis that seeks to answer why something happened and what the root causes are.

Predictive Analytics

Analysis that seeks to forecast future events or outcomes based on current data.

Prescriptive Analytics

Analysis that provides recommendations for actions to optimize performance.

AMPS Model

A framework for performing data analytics involving Ask the Question, Master the Data, Perform the Analysis, and Share the Story.

Data Integrity

The accuracy, validity, and consistency of data used and stored over time.

Data Visualization

The representation of information as a graph, chart, or other image.

Static Visualization

Characterized by the lack of constant update, change, or activity.

Dynamic Visualization

Characterized by constant update, change, or activity.

Bar Chart

A common visualization type used to compare values across different categories.

Pie Chart

A visualization type used to show the composition of values from a whole.

Histogram

A representation of the distribution of numerical data.

Scatterplot

A type of graph used to determine relationships between two variables.

Regression Analysis

A statistical method used to evaluate the relationship between variables.

Pivot Table

A data summarization tool used in Excel to reorganize and summarize selected data.

Cash Flow Analysis

An evaluation of the cash inflows and outflows for a business.

Benford's Law

A statistical principle used to identify anomalies in datasets and detect fraud.

What-If Analysis

A technique to evaluate how changes in input variables impact outcomes.

Excel

A basic tool commonly used for data acquisition, preparation, analysis, and visualization.

Alteryx

A tool for data preparation and performing data analytics.

SQL (Structured Query Language)

A language used to access specific data from large datasets in databases.

Tableau

A data visualization tool used for creating interactive and shareable dashboards.

Power BI

A business analytics service that provides interactive visualizations and business intelligence capabilities.

Data Acquisition Tools

Software tools used to access and prepare data for analysis.

Data Analysis Tools

Software tools used to analyze the data after preparation.

Data Visualization Tools

Software tools used to present the data analysis results.

Analytics Mindset (EY)

Ask the right questions. Extract, transform, and load relevant data. Apply appropriate data analytic techniques. Interpret and share the results with stakeholders.

Analytics

The discovery, interpretation, and communication of meaningful patterns in data.

Stakeholders

Individuals or groups with an interest or investment in the outcome of a project or analysis.

Trade-offs

Balancing different factors in decision-making, considering benefits versus costs.

Factual Data

Information that can be verified and is not based on opinions.

Opinion-based Data

Information that reflects personal beliefs or interpretations rather than facts.

Categorical Data

Data that can be divided into groups based on characteristics.

Numerical Data

Data that consists of numbers and can be quantified.

Visualization Examples

Specific graph types such as bar charts, line graphs, and scatterplots used for different analytical purposes.

Dashboard

A graphical summary of various measures tracked by a company.