Data analytics basics

Have you ever wanted a quick way to gain a deeper understanding of your clients’ or organization’s business to deliver greater insights and value?Data analytics
is your answer.Data analytics uses raw facts and statistics to analyze trends and patterns, identify anomalies or extract other useful information to reach conclusions and see opportunities. It’s about using information to make data-driven decisions.Read on to learn more about the opportunities for CPAs in data analytics.

Data Analytics in 60 seconds: What you need to know

AICPA^® members :
access data analytics learning
through the free CPE
Digital Mindset Pack.

Types of data analytics
There are four types of analytics, ranging from simple to complex.

Descriptive analytics — focuses on past information; what happened?

Diagnostic analytics — focuses on the cause of past information; why did it happen?

Predictive analytics — focuses on the future; what is likely to happen?

Prescriptive analytics — focuses on the best option; what action should be taken?

Most finance and accounting professionals use descriptive and diagnostics analytics in their day-to-day work. However, the real value for you and your firm or employer is in understanding how to leverage predictive and prescriptive analytics.We’ll share more later about how you can develop those skills through our free CPE Digital Mindset Pack and other learning resources.Why data analytics?
Data analytics offers tremendous advantages for organizations of all sizes. In fact, it may be especially beneficial to small- and medium-sized companies as it can result in low-cost ways to drive revenue and improve margins.The insights gleaned from data analysis can help you make recommendations that can:

Boost operational performance.

Increase profits and reduce costs.

Improve the customer experience.

Identify and prevent fraud and risk.

Meet compliance requirements.

Raise competitiveness.

If you’re an auditor, you can use audit data analytics, or ADAs, to improve the efficiency and effectiveness of financial statement audits. You can use this technique to perform risk assessment procedures, tests of details and sometimes analytical procedures.

Need another reason why you, as a CPA, should embrace data analytics? It can boost your career. CPAs with data analytics skills are in high demand.Organizations are increasingly looking to use data to make critical strategic moves, and CPAs have an opportunity to lead this charge. Your technical expertise, coupled with your analytical mindset and holistic knowledge of the business, positions you perfectly to leverage data analytics to benefit your firm or organization.