Question

. List and explain 10 impacts Big Data can have on an Accounting Information System. Give example(s) for each point. (50Marks)

Answer 1

The impact of big data on accounting information system is:

a) Big data has the potential to change the landscape of businesses particularly in the areas of accounting information system and automating operation processes. It is doing predictive analysis of decision making. For example the Big Data can provide all the details of decision making without the use of DSS.

b) Different data sources are being integrated into accounting information system and this is resulting in automatic mining of data for the use of the business. For example vido, audio and text data are being linked to traditional data.

c) One place where big data can substantially effect the change is the fair value accounting. Data service companies specializing in collecting and evaluating designated data could emerge such that big data pertaining to the fair value of assets and liabilities can mitigate subjective assumptions in fair value estimates. For example piling up all the random data or scattered data and through that collected data make use of it to assess the fair value.

d) The impact of big data can be to minimise the accounting frauds as the total collected data from stattered and all sources can help in easy catching of the culprit.

e) The accountants need to update their knowledge to make good use of the big data. It can be the key to every problem they ever face. For example if the accountant does not know how to access the big data what is the point of big data.

f) The big data can impact the way audits are done. Having compiled the big data on accounting information system can help in gathering audit evidences and help in preparing audit documentation and finding out the mistakes easily. For example if an auditor suspects any mis management in any department of finance he can use the big data to gather information faster and in a detailed format.

g) Big data in accounting information system can help to prepare budgets and database in a more robust and accurate manner. The big data can help in better estimation.

h) Accountants – already immersed within IT, financial systems and reporting, and serving as the go-between for upper management, operations, and external stakeholders – are well-positioned to take a leading role in efficiency initiatives. At the end of the day, accounting and financial information systems serve a relatively simple role – the transformation of operational data into financial statistics.

i) The big data can mitigate the requirements of accountants to cross checking of data as the big data will be doing the same by collecting and integrating the data.