june2022 - 15

FEATURE
The Risk and Rewards of Big
By Mary Girsch-Bock
EVERY TIME YOU swipe your credit card, use a loyalty card at
your favorite store, or purchase an item online, your data is
being collected. The amount of data collected daily is enormous
and is provides nothing of value unless it is properly
analyzed and used in the course of business. For example,
grocery stores track items purchased each time your card
is used when you shop. But if the data collected in not used
to better the customer experience or provide better insight
into customer purchasing habits, the data is useless.
WHAT IS BIG DATA?
However, once analyzed, the collected data can
reveal useful information such as trending issues
in a certain business sector, allowing accountants
to use big data to spot trends in accounting transactions,
something they've been doing for years.
However, collection and analyses of big data allows
firms to expand the process, providing accountants
with the ability to better predict outcomes
and even better spot fraud.
BIG DATA CAN BE COLLECTED
FROM A VARIETY OF SOURCES
There are three main sources of big data:
1. Transactional - Both online and offline
transactions such as invoices, payments, and
receipts are regularly collected. However, anyone
collecting transactional data will need to find a
better way to utilize the information provided in
the transactions collected.
2. Social media- Social media platforms are
one of the main sources for big data, with tweets,
retweets, user comments, and uploads collected
daily. Particularly valuable when looking for
marketing trends, social data provides an inside
look into consumer behavior.
3. Machine data- The collection of machine
data is expected to grow in upcoming years
as more data sensors are installed on a
variety of equipment ranging from medical
devices to cameras.
Data can also be collected from barcodes,
government agencies, and even website visits.
There's no end in sight for how or where you can
collect big data. The challenge is what to do with
it once you have it in your possession.
WHAT ARE THE BENEFITS OF
COLLECTING BIG DATA?
Why should you collect big data at all? Turns out
that there are a lot of reasons why taking the
time to collect, parse, and analyze big data can be
beneficial. Collecting and analyzing big data can:
* Streamline current processes
* Improve strategic planning
* Create more accurate forecasts
* Identify possible risks and take mitigating action
* Achieve greater insight into results
HOW IS BIG DATA BEING USED IN
TOP INDUSTRIES?
One of the earliest and most successful uses of
big data began in the retail industry. Membership
cards, savings cards, loyalty cards, and rewards
cards have all been used in recent years to track
customer purchasing habits, allowing retailers
to tailor products and sales to each customer
individually. Big data has also had a significant
impact in healthcare, where it can be used to more
accurately predict outcomes for patients while also
assisting in improving healthcare delivery options.
HOW IS THE USE OF BIG DATA
IMPACTING ACCOUNTING FIRMS?
The use of big data can help accounting firms
streamline internal processes, significantly
reducing paperwork while providing clients with
more accurate information in real-time. Using big
data can also improve the client experience, with
more accurate predictions and more personalized
services available.
The use of data analytics for example can
automate the audit process, using actual data
instead of a small sample, resulting in more
accurate predictions, increased compliance and
a reduction of errors. Big data can also help identify
risk, allowing firms to better prepare clients for
possible adverse conditions down the road. And
with data available in real-time, more informed
business decisions are able to be made.
ARE THERE ANY RISKS IN COLLECTING
BIG DATA?
Collecting big data is not without risk. If you're
going to use collected data, you must first
determine that the data is clean and not filled
with errors. Also keep in mind that once data is
collected from various sources, it will need to be
securely stored. 92% of data breaches that have
occurred in the first quarter of 2022 have been
due to cyberattacks (https://tinyurl.com/2p8brykc),
so if you are going to collect big data for use in
your firm, the proper security measures must be
put into place.
Security risks aside, there are also some
ethical issues you may need to address. Even
if you keep data safe from hackers and other
cybercriminals, you also have a responsibility
to use the data ethically. Before obtaining and
using big data, be sure that you have obtained
consent for using that data and are not violating
any privacy laws when doing so.
IS THE REWARD WORTH THE RISK?
There is vast potential in using big data, but
along with the potential, there's also some risk.
However, if you take the proper safeguards
and ensure that the data you're collecting is
clean, the rewards can far outweigh the risks. ■
JUNE 2022 ■ www.CPAPracticeAdvisor.com
15
https://www.tinyurl.com/2p8brykc http://www.CPAPracticeAdvisor.com
june2022

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