International Journal of Corporate Finance and Accounting

Volume 8 • Issue 1 • January-June 2021

The Impact of Big Data on

Accounting and Auditing
Dimitris Balios, National and Kapodistrian University of Athens, Greece
https://orcid.org/0000-0002-0130-9320

ABSTRACT

Big data and big data analytics will unavoidably change the role of accountants. This paper considers
the impact of big data on accounting and auditing. Financial accountants need to move beyond the book-
keeping process and become key information providers to decision-makers. That upturns accountants’
consulting role and their ability to think strategically, providing critical help in management decision
making. The relationship between managers and management accountants becomes closer and more
effective because of big data. Management accountants can use additional analytical methods to detect
processes and product excellence, combined with diminishing cost. Big data and big data analytics
in auditing ensure audit quality and fraud detection. Upgraded information systems and automation
in business procedures diminish the need for staff participation. Inevitably, the skills of accountants
and knowledge must be associated with big data and big data analytics and modern accountants must
develop an analytics mindset by being familiar with data and technologies.

Keywords
Accounting, Auditing, Big Data, Big Data Analytics

1. INTRODUCTION

Organisations collect more and more data because of rapid technological advances. The cost of data
storage becomes smaller because of technological change. Organisations are able to collect massive
volumes of data that cannot manage, data that is difficult to analyse in order to improve their decision
making. Organisations can store data such as transactions data, financial data, cost production data,
environmental data. Big data consists of datasets that cannot reasonable analysed by traditional
analysis software systems.
What makes these data “big” is determined by the capability of the information systems that
organisations use to utilise these data (Manyika et al., 2011). The amount of data that relevant
software systems can store or process is not as big as the volume of information can be collected
nowadays using modern technology. In addition, big data is related to better decision making because
of the analysis of these information sets (Markus and Topi, 2015). Big data allows users to develop
information computer systems that apply distributed queries over high voluminous data and in return
to obtain the intended outcome for decision making.
Since 1999 that Mashey referred to “Big data” term, exponential growth in publications relating
to big data happened (more than 30.000 documents in Scopus database; Cockcroft and Russel, 2018).
A taxonomy of big data themes is presented by Cockcroft and Russel (2018) structured according
to 75 articles regarding accounting, finance and information systems. This taxonomy is based on

DOI: 10.4018/IJCFA.2021010101

Copyright © 2021, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.


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techniques and processes, information governance, privacy/security/ethics, professional roles and

new applications.
So, technology has advanced, and accounting records have developed over time from handwritten
books to book-keeping software, to Enterprise Resource Planning (ERP) systems and cloud accounting.
Big Data is yet another technology paradigm that changes the business environment. As noted in
the title of this paper, the purpose is to discuss the technological issues impacting accounting and
auditing. The key point is that big data and big data analytics increase the informational power
managers can receive from accountants and make better decisions. Financial statement audits can be
more efficient and effective. The author puts forward the hypothesis that the technological change
will continue rapidly and the available information stored and managed will be low-cost. In particular,
the researcher begins by exploring the meaning of “big data” and “big data analytics and then he
discusses how financial accounting, management accounting and auditing change because of the
technological revolution.
The remainder of the paper is organized as follows. First, we will present the meaning of big
data and big data analytics. The third section of the paper analyses the impact of big data on financial
accounting. Section 4 focuses on management accounting and how big data influences management
control systems. In section 5 we investigate the changes in auditing and financial fraud detection.
Lastly, we will discuss implications for employment, the role of accountants, the accounting profession
and the required skills, as well as suggestions for future research concluding remarks.

2. THE MEANING OF “BIG DATA” – BIG DATA ANALYTICS

It seems that there is no standard definition on “Big data” as researchers adopt different views
depending on the situation they are interested in. Mashey (1999) seems to be the first commonly
used the term. Big data is (a) a combination of a massive amount of various types of information
and various types of analytical tools (Russom, 2011) or (b) the datasets that are beyond the ability of
classic database software tools to accumulate, manage and analyse (Manyika et al., 2011). Additionally,
big data is “big” and significant because the available datasets are very voluminous. Big data can
generate knowledge and added value because of their conversion in useful information that improves
decision-making (Markus & Topi, 2015).
Various Vs characterise big data. Laney (2001) introduces the 3Vs of big data as he describes the
data management in three dimensions. Laney’s three Vs are Volume, Velocity and Variety. Veracity
becomes the 4th V (IBM, 2014). Nowadays, researchers suggest that big data are characterized by many
Vs and one C. The Vs are Volume, Velocity, Variety, Veracity, Validity, Variability, Visualization/
Visibility, Virtual and Value. The C has to do with Complexity.
Volume is a journey from bytes to zettabytes, yottabytes or beyond. Volume refers to the enormous
amount of big data, the continuously growing size of data which is unmanageable with traditional-
conventional systems. On the other hand, data creates another data that has to be transmitted to users
for analysis.
Big data raises, and velocity contributes to bigger data. Velocity concerns not only to speed of
data growth but to speed of data transfer too, the speed at which the data is flowing. For example,
cloud computing in accounting generates massive data e.g. from transactions, to store, process and
manage. Many data are available at the end of a business day. Except for the traditional structured
data, semi-structured (e.g. log data or XML data) or unstructured data (e.g. images, videos) can be
part of the decision-making process. Variety concerns the available types of data. So the volume
grows, a variety of data is available and velocity makes this data growth exponential.
Veracity (Xiaolong et al., 2015) raises the integrity of data. Decision making is problematical if
the available data are not accurate. Accuracy and reliability make big data meaningful. On the other
hand, veracity leads to worthiness if there is validity. For example, transaction data imported in cloud

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accounting systems must be valid to data from traditional accounting information systems in order
to proceed in a standard financial analysis for many years.
Variability (Chen & Zhang, 2014) is another characteristic of big data. Variability refers to data
whose meaning is changing through time. Data changes over time due to time, modification of user
and outmoded data. Visibility refers to the state of being able to see or be seen and defines the data
that can be viewed from a reference point. Visualisation (McNulty, 2016) is the process we follow
to show the hidden part of big data. Without visualisation, massive amount of data could be useless.
Visualisation concludes in complex graphs that are crucial in decision making as they may include
many answers to questions we did not know to ask. On the other hand, virtual (Chen & Zhang, 2014)
is a process to manage the data on demand of users. Cloud computing advances based on virtualisation
and offers virtually unlimited and on-demand processing power as a partial solution (Yang et al., 2017).
Data is crucial to decision-making processes. Big data is valuable when the enormous stored data
extract value to users (enterprises, organisations, societies, consumers). Value (Ali-ud-din Khan et
al., 2014) is higher when users use big data in analyses that conclude in better decisions. The value
obtained is questionable because of complexity. Complexity has to do with technical complexity.
Analysts must have big data science skills in order to use adequately big data.
Organisations use big data to improve decision making and achieve better business performance
and higher profitability. Brynjolfsson et al. (2011) claim that companies that incorporate in their
procedures business-data analytics techniques achieve up to 5-6% higher productivity. The term “big
data analytics” refers to the use of innovative computerised analytical techniques for analysing big
complex data sets. Big data analytics integrate big data, while data analytics examine general data. Big
data analytics is the process of inspecting, cleaning, transforming and modelling big data to discover
and communicate useful information and patterns, suggest conclusions and support decision making
(Cao et al., 2015) by using sophisticated - smart algorithms (Davenport, 2014).
Nowadays, personal computing has progressed to cloud computing. Cloud computing, which
is the networking of many computers, leads to computer systems that will be available to collect a
massive amount of, mostly, unstructured data. New technologies may be able to learn directly from
the data instead. Through machine learning methods, we can use data to build logic, and we can
analyse effectively and rationally, large amount of information that human beings are incapable of
absorbing by their owns (Yang et al., 2017).
Decision making is better through big data analytics as it decreases false positives. A false positive
condition is a particular condition or attribute which looks present, looks true when it is not (Cao et
al., 2015). Big data analytics can substantially reduce these false positives by identifying anomalies
more accurately and by applying a system of prioritisation (Krahel & Titera, 2015; Yoon et al., 2015).

3. THE IMPACT OF BIG DATA ON FINANCIAL ACCOUNTING

The common consensus is that big data will change accounting in general. The role of accounting in
decision-making processes changes and alters the characteristics of the skill sets of accountants. The
role of financial accounting and primarily bookkeeping (in creating business information through
financial statements on which managers base their decisions) will weaken, as managers combine this
information with other sources of data (Bhimani & Willcocks, 2014).
Before computers, account and general ledgers provided summary accounting information.
Advances in computers allowed storing and retaining complete information about all transactions. Big
data in accounting expands accounting data (e.g. through ERP systems), reduces time, for example,
in book-keeping and allows accountants to participate more actively in decision making. Moll and
Yigitbasioglu (2019) overview studies in accounting and information systems and describe how
internet-related technologies like big data, combined with cloud accounting, block chain and artificial
intelligence are the areas that influence financial accounting. Huerta and Jensen (2017) argue that
the profession of an accountant is in transition with accountants playing an increasing role in data

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analysis. These changes will affect the daily work of accountants because of the availability of big
data (Bhimani & Willcocks, 2014).
Record – keeping can be automated, and algorithms can help on evaluating intangible assets.
Big data and big data analytics push accountants in an uncharted sea that reduces the need for
human accountants or increases the need for other professionals with technology and analytical skills
(Richins et al., 2017). Nowadays, financial accountants need to move beyond using structured data
such as transactions and their book-keeping. Financial accountants have to move beyond using simple
analytical tools such as DuPont analysis. Financial accountants must be able to use structured and
unstructured data to help with the strategic decision-making process (e.g. see Patatoukas (2012) big
data analysis on strong customer base and firm performance).
Also, big data could influence the way accountants provide information through financial reports
(Warren et al., 2015). Accounting standards regarding, for example, current inventory and asset
valuation methods, depreciation methods and valuation of intangibles, will become old-fashioned
or will have to change soon as big data technology provides alternatives (Vasarhelyi et al., 2015).
We can read about buildings and other fixed assets in the balance sheet. How transparent is that
information? Big data from multimedia files (e.g. videos, images), through ERP systems, can provide
to users of information a more comprehensive view of each asset’s condition. This is (a) not only a
benefit for financial accountants to estimate the fair value of an assets (or depreciation), (b) not only
extra information to auditors, but improved transparency and usefulness e.g. for investors, to make
decisions (Warren et al., 2015). This transparency decreases credit risk and gives the opportunity to
firms to raise funds in better terms. Additionally, regarding valuation of property, plant, and equipment
(PP&E), (a) peer benchmarks, (b) extractions of histories of pricing and (c) activity in peer markets
can easily be used through big data and conclude in more effortless and costless fair values. Regarding
depreciation, instead of methods that compare values across time, big data from internet and values
of items in electronic markets and sales lists can provide partial valuation (Vasarhelyi et al., 2015).
Inventory taking changes as new technologies as Radio-Frequency Identification (RFID), barcodes
and Global Positioning System (GPS) create data streams that allow accountants to have real-time
information. Inventory valuation methods like First In – First Out (FIFO), Last In – First Out (LIFO)
or the historical cost are less accurate methods compared with the ones obtained by using big data
techniques. Instead of these methods, values of items in electronic markets and sales lists can be used
to evaluate inventories (Vasarhelyi et al., 2015).
Finally, a big problem with financial statements is that balance sheets omit several significant
intangible assets that are difficult for accountants to determine objectively (Kieso et al., 2013). Such
intangible assets contain human resources, product quality, reputation, commitments or the customer
base. Big data can contribute to better understand the nature and the characteristics of these assets
via data-mining algorithms (Warren et al., 2015). Big data could affect the evolution of accounting
practices on evaluating these intangible assets.

4. BIG DATA INFLUENCE IN MANAGEMENT ACCOUNTING

Financial accountants provide information to management accountants. Management accountants use

the information generated by financial accounting to help managers achieve their goals. Enterprises
develop and implement their strategy better because of management accounting (Atkinson et al.,
2011). That is why accountants must understand what information managers need for decision making
(Garrison et al., 2012). The close relationship between accountants and managers allows accountants
to develop expertise in the formulation and implementation of strategic objectives.
This relationship becomes closer and more effective because of big data. For example, big data
can play a role in management control systems (Malmi & Brown, 2008), systems that bring into
line fundamental objectives with the behaviors of management and employees. These management
control systems, e.g. the balanced scorecard (Kaplan & Norton, 1996) can be facilitated by big data

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analytics in areas like the customer area, the internal business process and financial ones (Warren
et al., 2015). Besides, management control systems can create metadata to track productivity (e.g.
the amount of time an employee spent on the phone in sales departments or in computer analysis,
indicates higher productivity). On the other hand, monitoring employees involves ethical and legal
issues. In any case, big data generates information that can conclude in changes in internal business
processes and could support management accounting and management control systems in particular.
Budgeting is an important area of management accounting. Budgeting has already changed
because of big data. Enterprises switch traditional budgeting techniques with the so-called beyond
budgeting methods (Bourmistrov & Kaarboe 2013). Companies use information derived by Enterprise
Resource Planning (ERP) systems (Hansen & Van der Stede, 2004) and big data to operational
planning, performance evaluation and strategy formation. These big data contain extra streams of
data outside ERP systems, such as macroeconomic and microeconomic data, labour statistics and
consumer preferences to improve beyond budgeting techniques.
Except for beyond budgeting techniques, integrated information systems like the ERPs, affect
other management accounting tasks with contradicting references on how efficiently lead in significant
changes (Rom & Rohde, 2007; Wagner et al., 2011). Because of the digitisation of the accounting
processes, management accountants have become almost consultants, more strategic and more
business-oriented.
Bhimani & Willcocks (2014) support that virtual platform organisations that direct manufacturing
or trading networks will develop requisite new methods of cost analysis. These new methods of cost
accounting are the additional tools management accountants can use in cost reduction methods (Dai
& Vasarhelyi, 2016). Big data derived from these virtual platforms will change industrial networks,
and structures like the organisational ones. Warren et al. (2015) conclude that access to big data in
advance of new statistical forecasting techniques will improve forecasts. Also, Warren et al. (2015)
note that enterprises can use big data technologies such as video, voice patterns and textual data
in management accounting activities to analyse the behaviour of clients in sales (e.g. online ones)
and recommend tactics to a salesperson in real-time. Big data could include the population data
which means that managers can search and extract new patterns and correlation in data regarding
the behaviour of people they are connected. The increasing capability of statistical analysis tools
and the developments of visualisation methods affect management accounting and decision making
(Rickardson, 2018).
We conclude that data analytics contribute and significantly change management accounting
techniques for financial reporting purposes, for performance measurement and in planning and
decision making (Appelbaum et al., 2017). Nowadays, management accountants can use additional
analytical methods to detect processes and product excellence, discover new combinations to diminish
cost and contribute effectively to decision making (Dai & Vasarhelyi, 2016). Areas that nobody could
imagine, for example, Facebook, can provide to management accountants unstructured data which,
by using sentiment analytics, can be inputted in sophisticated models (Richins et al., 2017). So,
management accountants need a skill set that will allow them, not only to support decision making
(Payne, 2014), but to understand big data and data analytics in order to develop specialist technical
expertise (Bhimani & Willcocks, 2014).

5. BIG DATA CHANGES IN AUDITING

The traditional audit approaches were implemented in an economy with limited data, mostly structured
data based on transactions (Vasarhelyi et al., 2015). The software systems the audit companies
use cannot analyse large volumes of data. Nowadays, transaction data companies can derive are
ubiquitous. Structured data, combined with semistructured (e.g. interaction data from social media)
and unstructured data (e.g. comments appearing in logs of process events), can become inputs in new
analytic techniques (e.g. visualisation, Rose et al.; 2017).

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The automatically generated data have more substantial size, expand new variables and provide
new opportunities for the assurance process. Information systems in companies are large, more
complex in structure, richer in data and interact with external systems and web services (Vasarhelyi
et al., 2015). These information systems are opaque in human observation and manual way gives a
little possibility of primary assurance. Automated audits that work in sync with management anomaly
detection and resolution processes (Vasarhelyi et al., 2010) is the answer although they need formalised
rules of accounting and assurance (Krahel & Titera, 2015a; Krahel, 2012).
Debreceny et al. (2017) argue that the Corporate Network Centrality Score is strongly associated
with a firm–led disclosures and accounting-based information which reveals the importance of the
information from the company’s position in the social networks (e.g. Twitter interactions). Dai and
Vasarhelyi (2017) suggest the potential use of blockchain-based accounting and assurance to enable
real-time accounting which will make accounting more transparent. Blockchain-based accounting is
more efficient to be adopted by companies in the banking sector or insurance and financial services
companies.
Accounting firms (PriceWaterHouse Coopers, 2015) create dashboards with operating streams
to facilitate auditors thinking analytically about risks and their instantiation in data patterns.
Additionally, accounting firms encourage auditors to look for underlying causes for anomalies or
business opportunities. Auditors adopt data analytics approaches and reorient audit methodologies
to become more competitive (Borthick & Pennington, 2017). For that purpose, the audit companies
need new staff, trained in big data analytics, staff with analytic mindset skills (Ernst & Young,
2017). In addition, the utilisation of Big Data in auditing is likely to have some critical behavioural
implications (Brown-Liburd et al., 2015). Auditors must develop a higher tolerance for ambiguity as
audit judgment becomes complicated by information overload, which will likely lead to difficulties
in identifying relevant information (Vasarhelyi et al., 2015).
Social networks, security videos, news videos, web hits, inbound mobile calls and Radio-
Frequency Identification (RFID) are data sources that can be used in assurance. More specifically,
social networks can be used to evaluate consumer satisfaction and product defects, can support clients
with technical problems and confirm technical support costs. Security videos can be used to confirm
receipts, exits of materials and shipping costs. News videos can be used in marketing and as a warning
of management or employee activities. Inbound mobile calls can be used to predict service costs,
monitor employees and estimate employee costs. Al these data can lead in observing fraud. Also, RFID
can be used to confirm inventory, confirm/measure shipping, link to price database and estimate cost
of goods sold. Last, web hits can be used to predict purchases sales (geographic or not) and revenues.
According to literature, research focus on the value of the use of big data and big data analytics in
auditing ensuring audit quality (Dubey & Gunasekaran, 2015; Brown-Liburd et al., 2015; Vasarhelyi
et al., 2015). Except from the general issues on the motivation to use big data and big data analytics
in external auditing (Alles, 2015; Earley, 2015; Wang & Cuthbertson, 2015; Arnaboldi et al., 2017;
Dagiliene & Kloviene, 2019), more critical becomes that big data analytics may improve the efficiency
and the effectiveness of financial statement audits (KPMG, 2017; Cao et al., 2015; Yoon et al., 2015;
Gepp et al., 2018). Cabuk & Aytac (2019) argue that using big data analytics and continuous auditing
system together, management and shareholders gain detailed information about the company’s present
situation and future direction. Big data technology enables enterprises to improve and balance the
internal data so that enterprises can achieve the best development state. On the other hand, the motive
of auditing companies on using big data analytics is unclear. Unclear are the reasons that influence
auditing companies to try to increase their efficiency through big data analytics (e.g. for making their
customers more satisfied) or it is the regulatory bodies that institutionally force companies to adopt
innovative analytical tools (Gepp et al., 2018; Dagiliene & Kloviene, 2019).

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5.1 Research Streams in External Auditing

The primary research streams in the field of big data analytics in external auditing are four. The first
research stream is about efficiency and effectiveness of financial statement audits. Cao et al. (2015),
Dubey & Gunasekaran (2015), Brown-Liburd et al. (2015) Yoon et al. (2015), Vasarhelyi et al.
(2015), Dagiliene & Kloviene (2019) and Balios et al. (2020) argue that the use of big data analytics
in external auditing is valuable for ensuring audit quality through more audit shreds of evidence.
Another stream of research focuses on the impact of incorporating big data and big data analytics
on the accounting profession (McKinney et al. (2017); Enget et al. (2017)). Enget et al. (2017) and
Zhang et al. (2015) discuss that big data technologies are transforming the accounting profession
as a result of the tendency to incorporate issues of big data analytics into accounting curriculums
(Sledgianowski et al., 2017).
As a consequence of the impacts described above of big data on external auditing is the change
in auditing standards. This is the next research stream. Gepp et al. (2018) note that updated auditing
standards are a step forward to encourage unwilling external auditors to engage in big data analytics.
Appelbaum et al. (2017) raise issues regarding (a) big data as audit evidence, (b) the new methods that
are most promising and (c) whether the auditing standards should change to facilitate these methods.
Many researchers argue that a change in standards to focus on data, combined with processes that
generate data and their analysis and changes in the nature of accounting records will add value and
relevance to the accounting profession (KPMG, 2017; Krahel & Titera, 2015b; Vasarhelyi et al.,
2015; Gray & Debreceny, 2014).
Last, big data expansion, combined with big data analytics dynamics forces auditing companies to
technological changes. Many researchers have tried to explain these challenges focusing on continuous
auditing technology (e.g. Rikhardssona & Dull, 2016; Appelbaum, 2016; Sun et al., 2015; Chen et
al., 2015). Other researchers focus on big data techniques on continuous auditing (Gepp et al., 2018;
Appelbaum et al., 2017), although technological paradoxes may arise because of incorporating big
data in corporate reporting (Al-Htaybat & Alberti-Alhtaybat; 2017).
In the end, auditors will deliver more in-depth and faster services because of external pressure
and business opportunities (Alles, 2015; Appelbaum, 2016) and, in order to do this, big data and
big data analytics have to be incorporated in their procedures. ERP systems work on this direction
and encourage the audit profession to adopt not only internet technology audits but big data based
audits too. EY (EY Reporting, 2015) argues that big data analytics in auditors’ procedures combined
with appropriately modified ERP systems will upgrade auditors’ profession as they provide better
understandings, quality and value to the users of financial statements. At the same time, Yoon et al.
(2015) point out that misstatements can be reduced because auditors can analyse financial statement
fraud signals more systematically. For example, the analysis of cash transactions to ensure compliance
with money laundering regulations can be more efficient through big data analytics; for instance, «split
payments» can easier be identified. Brown-Liburd et al. (2015) illustrate that efficiency by uncovering
patterns through larger volumes of data and big data analytics can support auditors to detect high-
risk areas. Thus, auditors will have better communication with clients and achieve more insights on
other features of clients’ business (EY Reporting, 2015). Salijeni et al. (2019) argue that “auditors’
recourse to technical development should be assessed not only from the technical improvements to
practice but also in terms of their more fundamental relevance to understanding the significance and
role of auditing in the governance of business”.

5.2 Big Data and Financial Fraud

High-risk areas are bigger when financial fraud exists. Section 240 of the Statement on Auditing
Standards No. 122/128 on «Consideration of Fraud in a Financial Statement Audit» on the objectives
of the auditors’, reports that an auditor must identify and assess the risks of material misstatement
of the financial statements due to fraud. Chang et al. (2008) first suggested that visual data analytics

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can feasibly and efficiently detect fraud on bank transactions. Abbasi et al. (2012) use meta-leaning
to build a financial fraud detection model, Krambia‐Kapardis et al. (2010) use neural networks when
Huang et al. (2014) use supervised neural networks. Until now, many researchers work on analysing
financial statements to detect fraud which have differences in classification rates (Lin et al., 2015).
Tang and Karim (2019) suggest a six-step system that includes initial data collection, data integration,
fraud indicator identification, group meetings and discussions, drawing conclusions and documentation
and improve the overall effectiveness of fraud detection.
Fraud examination is included in forensic accounting with anti-corruption and anti-bribery,
business valuation and cybersecurity (Crumbley et al., 2015; Rezaee et al., 2004). There is increasing
use of forensic data analytics in forensic and investigative accounting services (EY report, 2014)
because of the opportunities the new automated audit technologies give.
All these new automated audit technologies are expected to influence the way expert human
auditors work in continuous auditing (Arnold, 2018). Auditors must focus on audit data with different
formats, on asynchronous data and conflicting data. All these issues have to do with data consistency
(Zhang et al., 2015). Other essential gaps that big data challenge to continuous auditing are related
to data integrity, data identification, data aggregation and data confidentiality (Zhang et al., 2015).
All these terms and characteristics show the direction on the skills auditors have to improve. That is
why the major Big Four audit firms have invested significant amounts of money in recent years to
either acquire or develop big data analytics tools (Salijeni et al., 2019).

6. DISCUSSION AND CONCLUDING REMARKS

Big Data and big data analytics are dramatically changing the business environment and the
characteristics of business procedures because of its considerable influence. Corporate functions
are shifting, new business know-hows are being added, old-fashioned business functions are being
removed, and procedures are being significantly enhanced. The volume of big data will continue
growing exponentially. Big data analytics, upgraded information systems and automation in business
procedures diminish the need for staff participation (Horak, 2018). Employment in areas like
controlling, financial and management accounting, and administration may be reduced because of
big data analytics and their cost-effective information it provides.
Big data and big data analytics will unavoidably change the role of accountants. The accounting
will have to change in response to big data. Big data expansion will lead to the automation of the
more ordinary and routine functions (Huerta & Jensen, 2017). Due to digitalisation, all accounting,
tax and auditing data can be processed, managed and checked online. Thus, the question is whether
these processes mentioned above will be automatically demanding no human participation. This does
not mean that accountants will come to be outmoded. Instead, it gives an opportunity to accountants
to focus on providing value to their clients and companies they work (Richins et al., 2017).
In contrast to Frey and Osborne (2017), who argue that accounting and auditing are likely to
become fully automated, we support that accountants can challenge their clients by utilising the
informational power big data provide. That upturns accountants’ consulting role and their ability to
think strategically, providing critical help in management decision making. Big data means more
sources and types of usable data and big data analytics allows new and better-quality understandings
and forecasts of business performance (Woerner & Wixom, 2015). The explosion of data availability
provides accountants with the opportunity to continue as key information providers to decision-
makers (Richardson & Shan, 2019). For example, management accountants will have to adjust
to new methods of business models and business processes in order to conduct effective value
chain analysis. Regarding financial accountants, the explanatory value of financial accounting will
increase if big data analytics will lead to a more accurate valuation of assets (fair values) and a better
understanding of the company’s financial position and performance. Warren et al. (2015) argue that

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fair value accounting could be a key cornerstone for constructing a global accounting regime and the
convergence between U.S. GAAP and IFRS.
Thus, the skills of accountants and knowledge must be associated with big data and big data
analytics. Applicable education and training on big data and big data analytics need to occur on all
levels from university students through to the continuing education of practising accountants. In
accounting and auditing, the use of Big Data will increase the statistical and IT content in curricula
(Vasarhelyi et al., 2015). Cao et al. (2015) argue that educational changes are necessary for making
successful use of Big Data in public accounting practice. Alles (2015) argues, the auditors will have
no choice but to follow the lead of management in utilising Big Data, the auditors will attempt to
keep in sync with the developments in corporate data utilisation in fields like marketing, supply
chain, and customer services.
So, the accounting profession may need to be alert in developing the required skills (Moll, 2019).
The 2018 Association to Advance Collegiate Schools of Business (AACSB) standards ask students to
demonstrate the ability to master current technologies and adapt to emerging technologies, including
statistical techniques, clustering, data management, modelling, text analysis, predictive analysis,
learning systems or visualisation. Technology, information systems and data analytics become
criteria in accreditation standards of AACSB and push changes in accounting curricula. According to
Richardson and Shan (2019), modern accountants must develop an analytics mindset by being familiar
with data and technologies. Data analytics must be incorporated into accounting curricula. Professors
have to teach students to ask the right questions that are able to be answered by available data, to
extract valid data from large datasets, apply proper analytical methods and connect data analytics
results and decision making effectively. We agree with Drew (2018) that accounting graduates is
very difficult to be at an expert level with data analytics skills, but we expect accounting graduates
to understand data analytics and cooperate with data scientists in answering accounting questions
and managers in decision making. The skills of accountants in interpretation and communication
data analytics results will create value for the businesses.
According to Warren et al. (2015), companies will benefit from big data and big data analytics
if they have the appropriate quantity of data, the appropriate quality (relevant data from questionable
sources) and accessibility (sufficient expertise in extracting information). Companies must analyse
the cost-effectiveness of the big data analytics procedures and decide whether they will adopt the
appropriate techniques or not, and if the answer is definite, whether the analyses should be outsourced
or not. More researchers have to focus on the technological, organisational and environmental factors
that create more value and higher performance when companies utilise big data analytics. Lycett
(2013) argues that big data has the potential to change business value creation through what is called
dematerialisation and density. There is a research gap on the changes in business models due to the
utilisation of big data and the way managers make decisions based on big data analytics results. Also,
decision making is changing because of big data through social media, website traffic activity and
mobile computing but is no clear how. Last but not least, a potential opportunity for further research
is the implication of big data and cybersecurity.

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Volume 8 • Issue 1 • January-June 2021

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Dimitris Balios is assistant professor of Financial Accounting at the National and Kapodistrian University of Athens
(NKUA), Department of Economics. He received his BSc, MSc, and a PhD degree from NKUA in 1999, 2001, and
2006, respectively. Dr. Balios possesses an extensive academic and professional experience. He has worked as a
research assistant in many academic projects of the National and Kapodistrian University and University of Piraeus
and has worked as head of the Departments of Research in two Athens Exchange Securities Market Members.

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