Data Analytics and Accounting Careers

ata is an asset, and those who know how to make use of it are at a significant advantage in the modern economy. This is why data analytics, which involves using data (often significant amounts of data) to identify patterns useful in decisionmaking, is such a hot topic in accounting and beyond. The good news is that accountants are well positioned to lead in the age of big data, but they need to make sure they have the right skill sets to take advantage of the opportunity.

There are four types of data analytics; descriptive, diagnostic, predictive and prescriptive 1 Descriptive and diagnostic analytics focus on what is currently happening and why and are the basis of “traditional” data analytics in accounting. They often involve using historical data to calculate metrics, such as financial ratios or unit cost statistics, which can be done using familiar tools such as Microsoft Excel. More recently, data visualization software packages, such as Tableau and Microsoft Power BI, allow for targeted analysis of large data sets and presentation of findings in a way that is easy to understand. Given that these activities often follow a set structure, they could be targets for robotic process automation in the relatively near future.2

Predictive and prescriptive analytics are more focused on what will happen and what the response should look like. They often make use of historical data to predict the likelihood of particular outcomes using regression-based models and then developing a probability-based action plan. While these analyses require an understanding of more sophisticated statistical techniques, they allow accountants to play an advisory role that adds value to organizations. Furthermore, they rely on creativity and problem solving that are more difficult to automate.

2 See the 2016 EY publication titled Robotic process automation in the Finance function, available at http://www.ey.com/Publication/vwLUAssets/EY_-_Robotic_ process_automation_in_the_Finance_function_of_the_future/$FILE/EY-roboticprocess-automation-in-the-finance-function-of-the-future-2016.pdf.

A February 2015 publication by PricewaterhouseCoopers (PwC) outlines the skills students need to succeed in a data-driven world. Noteworthy is that they reference each of their primary product lines (audit, tax, risk management and consulting), suggesting that the emergence of big data will impact virtually all aspects of accounting.3 While data analytics is leading to rapid changes in our profession, it provides opportunities to deliver value to clients and more flexible and interesting experiences for accounting professionals.

Here are five ways that you as an accounting student can position yourself for success in the data-driven landscape:

Focus on critical thinking

Your value as an accounting professional increasingly comes from an ability to solve problems rather than inputting keystrokes into a software package. Tools change, but the need to approach problems in a systematic way is ever present. As you complete projects in your accounting courses, make sure to focus on process and question how (and why) a particular activity adds value.

Learn to code!

Accountants need to be ready to use data to offer tailored solutions to problems, some of which may not be feasible via existing software packages. Writing code in R or Python allows you to produce customized analyses limited only by your own creativity. It makes them repeatable, which can be invaluable if you want to do the same thing millions of times. A great side benefit of learning to code is that it forces you to practice your critical-thinking skills as you systematically outline the instructions you want your program to perform.

Refine your communication skills

While much of data analytics involves using sophisticated tools, do not lose sight of the importance of effective communication. Data analysts must work with process owners to get an understanding of business activities so they can determine what data are available and produce analytics that have value. Furthermore, data analytics can only influence decision-makers if it is communicated in a clear, concise and persuasive manner. In addition to getting as much practice in both oral and written communication as possible, try to seek opportunities to develop your interviewing skills.

Emphasize general business knowledge

A major benefit of having accountants perform data analytics is that they understand business — accounting is, after all, the language of business. Make sure to complement your accounting skills with an array of courses that make you a wellrounded business professional, and use your electives wisely to fill gaps in your knowledge.

Stay current on thought leadership

Public accounting firms are at the forefront of the data movement, and they regularly post white papers, surveys and how-to guides online. Staying aware of industry trends will provide you with important insight and should yield benefits during the interview process. Other excellent sources for information are practitioner-oriented publications such as the CPA Journal, Journal of Accountancy, and Strategic Finance (among many others).

Kevin Rich, CPA, PhD, is chair and associate professor of accounting and the Charles T. Horngren Professor at Marquette University. Contact Dr. Rich at 414-288-7708 or kevin.rich@marquette.edu.

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