State Board Report

July 2017

The time has come for accounting programs to include the study of data analytics, according to Dr. Hussein Issa of Rutgers University. Speaking at the Eastern Regional Meeting, Dr. Issa observed that while accounting firms can hire data analysts from outside accounting, it is more difficult to teach the data analytics specialist to understand what an audit requires. “Eventually you need to be able to understand if the other team members have applied the technology in the right way,” he observed. While it is up to the universities to update the skills they teach to their students, “it is also the job of firms, regulators and companies to encourage students to have these skills before they hire them. Reward them for these skills,” he recommended.

Regulatory Response Committee Chair W. Michael Fritz and Standard Setting Advisory Committee Chair Catherine Allen conducted panel sessions at both the Eastern and Western Regional Meetings exploring the importance of data analytics and artificial intelligence to the accounting profession and its regulators. Mr. Fritz showed the audience a short video that Deloitte is using to highlight for students the importance of technology in current practice.

“Data analytics is not new: What has changed is technology, in that you can run more advanced analytics. The low cost of storage means you can write analytics on a much larger set. Data analytics is a methodology that should be used as an assistant to the human, not a replacement. It assists the driver, but does not replace the driver,” Dr. Hussein observed. Mr. Fritz commented, “That is where professional judgment comes into play.” Ms. Allen noted that the possible time-saving techniques can alleviate many of the discussions that audit teams have about being time pressured.

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