REVIEW: Data and Statistics

Why Do Accountants Need to Know Data Analytics?

●​ Can use data analytics to enhance decision making, improve operational efficiency, and
provide deeper insights into financial and non-financial information.
●​ Makes you more valuable

What is data analytics?

●​ Science of analyzing raw data in order to make conclusions about that information.
●​ Many techniques and processes of data analytics have been automated mechanical
processes and algorithms that work over raw data for human consumption.

Key Differences between Data Analytics and Business Analytics

How can accountants use Data Analytics?

●​ Audit and assurance
○​ Monitoring eklabu
●​ FAR
○​ Error detections
○​ predictive analytics
●​ FRaud detection
○​ Machine learning to detect unusual transactions to indicate fraud
●​ Tax planning and compliance
○​
●​ Strategic decision making

How should you be prepared?

●​ Be more literate in data analytics to become familiar with tools used to analyze and
interpret data Bawal 8080
●​ Excel is one of the most used tools for data analytics and having a solid understanding
of how the tool works now will give you a great base for your future as an accountant
○​ Using spreadsheets and other related software
○​ Input and organize necessary data for interpretation and analysis
Business Analytics process (tamad momints uli)

Outcome of the entire BA analysis:

Measurable …

A categorization of analytical methods and models

Definition Purpose Example: FS
Analysis from FMG1

Descriptive Application of Identify possible Interpreting financial

statistical techniques trends in large data statements
that describes what is sets or data bases
 contained in a data
set or data basis

Predictive Advanced statistical, Identify predictive Financial projections,

information software variables and build Using regression
or operations predictive models to analysis to show the
research methods identify trends and
relationships between
relationships not
readily observed in a data (ex. Rel.
descriptive analysis between advertising
expense and net
income)

Prescriptive An application of Making the best use What additional

decision science, of allocable internal/external
management resources funding must be done
science, and
operations research Optimal solution to
methodologies achieve efficiency
(applied
mathematical
techniques)

Applications in Business and Economics

●​ Accounting
○​ Public accounting firms use statistical sampling procedures when conducting
audits for clients
●​ Economics
○​ Making forecasts about future of economy or some aspect
●​ Finance
○​ Basta something about financial advisors using data of clients (like annual
income, health, etc.) to provide financial plans that they can offer
●​ Marketing
○​ Electronic point-of-sale scanners at retail checkout counters are used to collect
data for a variety of marketing research applications
●​ Production
○​ A variety of statistical quality control charts are used to monitor the output of a
production process

Data and data sets

Data
●​ Facts and figures collected, summarized, analyzed and interpreted
●​ Once processed, this becomes information

Data sets
●​ The data collected in a particular study
Elements, Variables, and Observations
Elements
●​ Entities on which data are collected
●​ Name of companies

Variable
●​ Characteristics of interest for elements

Observation
●​ Set of measurements collected for particular elements
●​ Measurements collected on each variable for every elements in a study provide the data

N observations
●​ Observations with n elements
●​ A data set with n elements contains n observations

Business analytics begins with a data set (a simple collection of data or a data file) or commonly
with a database (a collection of data files that contain information on people, locations, and so
on)

Elements → name of companies

Variable → Exchange, Ticker, business week rank …
Observations →
Levels/Scales of measurement

The scale determines the amount of information contained in the data

The scales indicates the data summarization

●​ Nominal (categorical) attributes are only named; weakest

○​ Data are labels or names used to identify an attribute of the element
○​ A nonnumeric label or numeric code may be used
○​ Example: gender
○​ Order or rank does not matter
●​ Ordinal (categorical) attributes can be ordered
○​ Data that have the properties of nominal data and the order or rank of data is
meaningful
○​ A nonnumeric label or numeric code may be used
○​ Differences can not be measured
○​ Example: Classification of students by year level, Academic performance
●​ Interval (quantitative) distance is meaningful
○​ Next most powerful scale measurements after ratio
○​ Data have properties of ordinal data, and interval between observations is
expressed in terms of a fixed unit of measure
○​ Interval data are always numeric
○​ Differences can be measured
○​ No true 0 value or starting point (this means if value is 0, it does not mean wala)
○​ Example: Temperature
●​ Ratio (quantitative) absolute 0
○​ Most powerful scale measurements after ratio
○​ The data have all properties of interval data and ratio of two values is meaningful
○​ Variables such as distance, height, weight, and time use the ratio scale
○​ This scale must contain a zero value that indicates that nothing exists (example:
If distance is 0km, hindi siya tumatakbo)

Categorical and Quantitative Data

●​ Data can be further classified as being categorical (can also be included in excel) or
quantitative (can be used in excel; can compute for the mean, variability…)
●​ The statistical analysis that is appropriate depends on whether the data for the variable
are categorical or quantitative
●​ More alternatives can be used

Categorical data are labels or names used to identify an attribute of each elements
●​ Labels or names used to identify attribute of each elements
●​ Often referred to as qualitative data
●​ Use either nominal or ordinal scale of measurement
●​ Can be numeric or non numeric
●​ Appropriate statistical analyses …
Quantitative data
●​ Indicate how many or how much
○​ Discrete - measuring how many (use whole numbers or integers)
○​ Continuous - measuring how much (can measure infinite dimension)
●​ Always numeric
●​ Ordinary arithmetic operations are meaningful for computations

Scales of measurement

Types of data palagay pic omg hindi ko na ss surri may nagtext kasi
*** panooding q recording if may time pala ako mamaya

Cross-sectional data
●​ Data are collected at the same or approximately the same point in time
●​ Example luh oo ganyan yan shea bilis

Time-series data
●​ Data are collected over several time periods
●​ Example: Number of building permits issued in the last 36 months
Data acquisition considerations
●​ Time requirement
○​ Searching for information can be time-consuming
○​ Information may no longer be useful by the time it is available
●​ Cost of acquisition
○​ Organizations often charge for information even when it is not their primary
business entity
●​ Data errors
○​ Using any data that happens to be available or was acquired with little care can
lead to misleading information

2 branches of statistics
●​ Descriptive Statistics
○​ Summarizes and organizes data to describe its main features.
○​ Provides a snapshot of the data without making predictions or inferences.
○​ Typical methods are: tabular, graphical, and numerical methods.
●​ Inferential statistics
○​ Uses a sample of data to make generalizations, predictions, or inferences about
a larger population
○​ Involves hypotheses testing and estimation
Statistical Inference
●​ Population
○​ The set of all elements of interest in a particular study
●​ Sample
○​ Subset of population
●​ Statistical inference
○​ Process of using data obtained from a sample to make estimates and test
hypotheses about the characteristics of a population
●​ Census
○​ Collecting data for a population
●​ Sample survey
○​ Collecting data for a sample

Statistical analysis using Excel

●​ Working with large amounts of data
●​ Computer software is typically used to conduct the analysis
●​ Frequently the data that is to be analyzed resides in a spreadsheet
●​ Modern spreadsheet packages are capable of data management, analysis, and
presentation
●​ Tasks
○​ Enter data
○​ Enter functions and formulas
○​ Apply tools
Income - ratio, quantitative, cross sectional and time series
ID number - nominal, qualitative, cross sectional
Birth Order - ordinal, qualitative, cross sectional
Market share - ratio, quantitative, cross sectional and time series
Temperature - interval, quantitative, cross sectional and time series
Profits per share - ratio, quantitative, cross sectional and time series
Rank - ordinal, qualitative, cross sectional and time series

​ ​ ​ ​ ​ End of Class Discussion​ ​ ​ ​ ​