The Importance of Data Analytics in Accounting

Kimberly Moy:
Good afternoon. And thank you so much for joining us. My name is Kim and I am a program specialist for Ohio universities Online Master of Accountancy. Today, we are joined by our program director, Dr. Jennifer Stevens. And we’re going to be speaking about the importance of data analytics in accounting. Now, for some of you, this might be a new concept, the idea of analytics and accounting, but I think after the end of this, we’ll have a great understanding of what that means and how our program can help prepare you for those roles in the work [inaudible 00:00:40]. So without further ado, I’d like to introduce you all to our program director, Dr. Jennifer Stevens. Dr. Stevens, hi. Would you like to introduce yourself?

Dr. Jennifer Stevens:
Great. Thank you. Hello and welcome. So I actually have an undergraduate and a master of accountancy. I then went into practice to work for a while. I worked for one of the big four accounting firms, Ernst & Young, in their fraud forensics practice. And then I went to a smaller boutique consulting firm that was starting a forensic accounting practice. So I have experienced both with a Big Four firm, as well as a smaller consulting firm. After that, I briefly went to an investment research firm. So I got exposure to the capital markets and kind of how the capital markets work and use information. And then I went back for a PhD at the Ohio State University.

Dr. Jennifer Stevens:
My first academic job was at the University of Notre Dame, and then I came to Ohio University. So I am now a Bobcat and I really love Ohio university. I think the student experience at Ohio University is second to none. The faculty, the administration, everyone at Ohio University is dedicated to giving students a transformative learning experience. And that’s part of our motto here. And the way we have developed our master of accountancy, we all have the same faculty teaching on our on campus program as well as our online programs. So it’s the same faculty, it’s the same content. And our faculty is really dedicated to giving a very similar experience. So we try and get to know our online students to the same extent that we get to know our on campus students. So we have put a lot of time and effort into developing the case-based curriculum, to really get our students prepared, to deal with real world issues and become leaders in creating information for decision-making that will be vital for the coming years.

Kimberly Moy:
That’s awesome. That goes right along with our topic of data analytics and accounting.

Dr. Jennifer Stevens:
So I’d like to talk to you a little bit about the evolution of data analytics and accounting. So the problem of the 20th century was lack of information and the problem with the 21st century is too much information. So we have too much information. And now the real competitive advantage is taking that information, that raw data and turning it into usable insights for decision-making and accountants are really good at this. Accountants have been trained in turning raw financial data, into information that is useful for decision-making. So we think that accountants are very well-prepared to be leaders from a financial perspective in businesses today. So we want our accounting students to be well versed in data analytics and use those data analytics to really, kind of recognize that we are going to use data to not only track past transactions or events, but also help predict the future and make decisions that are going to be relevant and help lead the business in specific directions.

Dr. Jennifer Stevens:
So this is not only from a financial perspective, but also from an information perspective. So traditionally you might think of accounting as we’re using financial data for decision-making. Yes, that is very true, but accountants also get to see how the business works and they really understand the business from the ground up because everything that goes on in the business runs through the financial system. And so accountants are really great at not only giving financial insights, but also providing operational advice or looking at the control environment. Accountants are trained in internal controls and helping organizations make sure that their data and financial processes are protected as well as making sure the organization is run efficiently and effectively. So all of this is very important from a data analytics perspective, because now we have all this data available to drive these processes and to drive this decision-making.

Dr. Jennifer Stevens:
And so we are going to train you in data analytics because data analytics is core to accounting today. We’re going to train you in new technologies, as well as really thinking about data and asking the right questions. What is the question that needs answered and what data can we use in order to answer that question? So we’re not only going to train you in the language of business accounting, but we want you to be able to use that language to ask the right questions and then be able to conduct analysis to arrive at answers. So you may be asking, how is data analytics used in the accounting profession? So let’s first think about it from a tax perspective. So tax accountants are going to use data to analyze tax implications or potential tax implications of investment or financing decisions.

Dr. Jennifer Stevens:
So they’re taking a data-driven approach to make business decisions that are going to have real effects on the cash flows of that company. Now, if you think about audit, a lot of people that go into accounting and a lot of CPAs will work in audit. So we have two types of audit, an external audit and an internal audit. So external audits are those that are reviewing the reports of publicly traded companies or of any type of company and giving an opinion as to whether those are fairly stated in compliance with gap. So an external audit is really a cornerstone of our efficient and effective capital markets in the United States.

Dr. Jennifer Stevens:
The auditors are helping provide reasonable assurance to the users of that financial information that they can base decisions off of those. And so our auditors are using data analytics to more efficiently audit these very large companies. So this is really helping to provide not only a faster and more efficient audit, but also a more effective audit by better really utilizing data in order to provide that assurance that the information these companies are providing is fairly stated. And then if you turn to internal audit, so companies also have internal audit departments, and that’s where we have accountants working inside the firm in order to help the firm reach its organizational objectives.

Dr. Jennifer Stevens:
And so it comes through using data analytics now within firms to help internal decision-makers use data in order to further the company, make sure that they’re in compliance with laws and regulations and to help improve the efficiency and effectiveness of their operations. And then lastly, we may have consultants or other financial planners that might work for companies and do some market analysis and use data to help understand consumer behavior patterns in the market, and then provide insights to the company in order to help them in the end improve profits.

Kimberly Moy:
Thank you for that, Dr. Stevens. So on this slide right here, I just had some really quick questions that I hope you could answer for us. And I guess my first question is why is data analytics in accounting important?

Dr. Jennifer Stevens:
Sure. So let’s just ask the question. What is accounting? So accounting is taking all of this data and information from business processes and events and summarizing it in a usable form so that internal and external decision makers can use that in their decision-making. And so data analytics is just providing more data and providing better tools in order to take the data and turn it into information that is useful for decision-making. So data analytics is really inherent in the accounting process and it always has been, we’re just now incorporating more tools that are available to us in that process.

Kimberly Moy:
Is that why you would say that accountants make good data scientists?

Dr. Jennifer Stevens:
Yes. So accountants are information specialists, we specialize in turning data into information. And so data analytics are just providing new tools for us to use, but we think like data scientists, we ask the appropriate questions, we look for the appropriate data, and then we are able to summarize it and interpret it in order to provide actionable insights for decision-making.

Kimberly Moy:
That’s awesome. And I know that you said that you’ve been working in the industry a little bit. How has new technology like artificial intelligence, how has that really affected data analytics in accounting?

Dr. Jennifer Stevens:
So I think technology has made the job of an accountant a lot more high level. So a lot of the old processes that an accountant might undertake, so doing journal entries, or putting items into the general ledger, recording these business transactions, that’s now all automated. So the accountant has really become more of a specialist in designing those systems and then using the data that’s coming from those systems for higher level analysis and decision-making. So now instead of just summarizing old data, we are not only summarizing the old data and making sure that it is verifiable and reliable and that the controls are in place in order to make sure that people can make decisions using it, but also using data to answer questions that are relevant to driving the business forward.And so, because accounts are really well versed in data to begin with, we’re becoming kind of the leaders in all of this new technology, not only designing the new technology, but using it in order to drive real business decisions, using financial information.

Kimberly Moy:
That’s awesome. So what type of skills do new accountants need to stay competitive in this new data driven world?

Dr. Jennifer Stevens:
Sure. So new accountants really need first of all a critical mindset. So they have to be able to think through business problems and then they need to understand the tools available to them in order to answer or address those problems, using the data that all the companies now have in their realm. And in order to stay competitive, accounts really have to understand the data processes and the data tools available to them in order to answer those high level questions and become leaders in the company. So they need not only a data mindset, they also need an analytic mindset where they’re trying to think, what question needs answered, what data do we have that can answer that question.

Dr. Jennifer Stevens:
And then lastly, I would say they need kind of a leadership mindset. So we’re trying to think big picture. We’re not just recording transactions, we’re thinking, what information is needed in order to help the business move forward. So I would say they need a data mindset, an analytical mindset and then a leadership mindset.

Kimberly Moy:
Good.

Dr. Jennifer Stevens:
And we address all of these in our Master of Accountancy Program.

Kimberly Moy:
Yes. I don’t want to spoil it, but we’ll definitely talk about how we can do that. So a few more questions from you. How do businesses use accounting data to make future decisions?

Dr. Jennifer Stevens:
Well, I think it really depends on the decision that needs to be made. So sometimes it’s asking the right question. So what is the question that needs asked? Perhaps if I’m a business and I have completely saturated one piece of the market, maybe the question is what new markets should I consider entering into. And so, how would you answer that question? Well, you would use data in order to do a market analysis, you would also use internal company data to see maybe where you have capacity within your production in order to meet and develop a product or meet the needs of a new market. So the accounting information is going to be used to drive future business decisions, but accounts also need to be able to help ask the right questions in order to… So this is that leadership mindset, in order to help businesses move forward.

Kimberly Moy:
I like it. And I know that our program really helps prepare accountants to utilize these tools, but can you tell me what kind of analytical tools that our students will need to understand as they go into the workplace?

Dr. Jennifer Stevens:
Sure. So we do a lot of data analytics, not only in a three-course sequence, but also embedded into all of our accounting core courses. And so potential students will be exposed to not only Excel and Access, but also Tableau and potentially R, so we are trying to give kind of more of a broad overview of these tools whereas we’re focusing on understanding how to make sure that the data has integrity. So how do you kind of test the data at the beginning of the process? How do you collect it and make sure that it is complete, make sure that it can’t be manipulated and then how do you analyze it using some of these tools?

Kimberly Moy:
I like it. And I knew that just looking at other programs out there, Ohio’s Online Master of Accountancy Program is really the only program out there that really truly focuses on this track for data analytics. So how does the program in your own words stand out in the industry because we offer this track?

Dr. Jennifer Stevens:
Sure. So I think the accountants with data analytics capabilities is really kind of a standout amongst his or her peers. And this is a highly in demand skill that firms are looking for not only consulting firms or accounting firms, but general, normal businesses want someone who understands the financial processes within the firm, but can also use data and analyze data in order to make these high-level business decisions. So we understand this, we don’t just want our students to be left in the dust or to be kind of sitting behind a desk crunching numbers based on past events. We want our students to be the leaders of the future.

Dr. Jennifer Stevens:
And we think that they will be well-versed in data analytics and accounting in order to do that. And so our programming incorporates a three course data analytics sequence, it’s actually taught by data analytics faculty. And coming away from that, if you complete that three course sequence, you will get a certificate in data analytics in addition to your master of accountancy. So we have some specific data analytics courses, but also all of our core accounting courses do incorporate kind of a data mindset and an analytics mindset, as well as some actual data analytics into them.

Kimberly Moy:
That’s awesome. Now we’re going to talk about those courses in just a minute. So no matter what your undergraduate degree is, if you want a master of accountancy, Ohio University has a path for you. If you have an undergraduate degree in accounting, then our accounting path is for you. [inaudible 00:18:42] 30 credits, it includes our accounting courses, as well as that data analytics course tracks that we’ve previously talked about. If you have a business background, meaning a degree in marketing or sales, for example, but no accounting, then we have a business pathway for you. And that includes our foundational courses, our accounting courses, and that data analytics class as well, 42 credit hours. And then let’s say you majored in pottery or something like myself, or you did fine arts, but you’re deciding that accounting is the way for you now, we do have a non-business pathway for you.

Kimberly Moy:
This includes our foundational courses, our accounting courses, and our general business courses. So while you do not get the big data analytics track here, you do have the accounting background to provide you with enough credit hours to take that CPA exam. And with our new business analytics certificate, if it’s something that does interest you, you can always take more courses at the end here, so that non-business path is 45 credit hours. And just one more time here, it shows in the accounting path or the business path, you earned the business analytics certificate at the completion of their data analytics courses. So on this slide, you see the three courses that are in the data analytics track, descriptive analytics, prescriptive analytics, and predictive analytics. I know that’s a lot of different terms, but basically, they will get you to where you need to be.

Kimberly Moy:
So again, those in the accounting track, as well as the business tracks, you take these three courses and you get that business analytics certificate. And those of you in the non-business track, you’ll be taken to descriptive analytics courses as part of your general business foundation courses as well. So what does that mean for you? Here’s some quick highlights about our online master of accountancy, no matter which path you’re in, you will complete this program in five to eight semesters part time. So that means you can continue working your day job while earning your master’s degree. As we mentioned before, our curriculum is pace based and aligned for today’s industry, leading best practices.

Kimberly Moy:
And as Dr. Stephens mentioned, our coursework is taught by faculty, the same faculty that is teaching on campus, the same faculty that has years of experience, both professionally and academically. And then another benefit of our courses here at Ohio University is that you take one at a time in seven week increments. So you still get two courses per 14 weeks, per semester, but it allows you to focus on the coursework at hand. So you’re studying for that one course, you’re becoming an expert in it before you move on to the next one. And I personally think that is the only way that I would be able to continue working while earning a master’s degree. And then the final interesting element about our bachelor of accountancy is as a student, you do have to come to our leadership development program workshop. And what this workshop is, it is a free day on campus, leadership workshop. That’s exactly what it is.

Kimberly Moy:
You get to come to our beautiful Athens Ohio campus. You get to sit in on these lectures, meet your fellow cohorts, meet your faculty members, and really get a true feel for what we do here. So why Ohio University? Well, accreditation is one way that can help differentiate which business program you might want to go to. Ohio University is accredited by the higher learning commission, but it is also accredited by the Association to Advance Collegiate Schools of Business, also, known as the AACSB. And this is like the gold standard for business schools. Only a few, I could say hundred colleges probably have this accreditation here.

Kimberly Moy:
In addition to the standard AACSB accreditation, Ohio University holds the supplemental accounting accreditation. So you can be rest assured that this program is the top of the line. So thank you so much for joining us today. Thank you Dr. Stevens for lending so much of your insight. If you have any questions about the Online Master of Accountancy, you can find our contact information here. We do recruit for spring, summer and fall starts. So if you are interested in learning more, feel free to reach out to us. Thank you so much.