Question

discuss the increase importance that is being placed on data analysis in the accounting field. Do you agree or disagree with the panel in the podcast that technology will impact the auditing profession.   Be sure to provide detailed examples to support your opinion.

https://www.journalofaccountancy.com/podcast/ai-blockchain-automation-reinventing-accounting.html

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Answer 1

Data analysis has become one of the prerequisite for a CPA to conduct an audit of financial statements.

Data analysis is used by accountants to help businesses increase their efficiency, effectiveness and excellence in performance of their operations. Data analysis help accountants to understand the processes and indentify any discrepancies or deficiencies in standard operating procedures which were adopted by the company and suggest any sort of recommendation to overcome deficiencies, if any.

Some of the examples can be illustrated as follows:

1. Using data analysis techniques and tools auditor can shift from sample based model to employ substantive and continuous monitoring whereby he can analyze much larger data sets.

2. Tax accountants can use data analysis to expedite their assessment of taxation effects on certain critical investments and the client can be fast enough to beat the competition and avail opportunities.