Department of Accounting and Information Systems

University of Dhaka

Course name: Accounting Information Systems (4103)

Term paper topic: Data analytics in Accounting Information Systems.

Submitted by:

Group D
Name ID Content covered
1) Mahim Hossain 26049 1-2
2) Ashraful Islam Asif 26063 3-4
3)Ashrafur Rahman 25119/26221 5-6
4) Jobayer Ahmed 26057 7-8
5) Md. Firoj Hossain 26251 9-10

Submitted to:
Raihan Sobhan,
Lecturer,
Department of Accounting and Information Systems.
University of Dhaka.
Date of Submission: 03 November, 2023

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Executive summary
The report is about the use of data analytics in Accounting Information systems. In this report,
we will see the importance of data analytics in accounting information systems and the different
types of techniques and tools used in data analytics. We will also see the use of data analytics in
financial reporting and we will cover an important concept of Audit Data Analytics (ADA). In
this report, we will also cover the data security aspect and the future trends of data analytics in
accounting information systems.

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Table of Contents
Executive summary.........................................................................................................................2

1. Introduction..............................................................................................................................5

2. Reasons why companies need data analytics in accounting....................................................6

3. Data analysis techniques used by modern accountants...........................................................8

Descriptive Analytics...................................................................................................................8

Diagnostic Analytics....................................................................................................................9

Predictive Analytics.....................................................................................................................9

Prescriptive Analytics................................................................................................................10

4. Tools and software for data analytics....................................................................................11

Accounting Software:................................................................................................................11

Spreadsheets/Excel:...................................................................................................................11

Data Mining Tools:....................................................................................................................11

Statistical Analysis Tools:.........................................................................................................12

Advanced Reporting Tools:.......................................................................................................12

5. Data analytics for financial reporting....................................................................................13

Financial statement analysis......................................................................................................13

Detection of financial fraud.......................................................................................................14

6. Audit data analytics...............................................................................................................16

7. Case Study:............................................................................................................................18

Challenges..................................................................................................................................18

Solutions....................................................................................................................................18

Results........................................................................................................................................19

8. Data Security & Privacy........................................................................................................20

Importance of Data Security and Privacy..................................................................................20

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 Data Security Measures.............................................................................................................21

Data Privacy Measures..............................................................................................................21

9. Future trends data analytics for accounting information systems.........................................22

10. Challenges faced when implementing data analytics in accounting information systems......24

10. Conclusion..........................................................................................................................26

11. References...........................................................................................................................27

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 1. Introduction
Data analytics plays a pivotal role in modern Accounting Information Systems (AIS),
revolutionizing how businesses manage financial data, make informed decisions, and ensure
regulatory compliance (Xu et al.,2020). In this ever-evolving digital landscape, AIS is no longer
limited to traditional bookkeeping and financial reporting; it has become a dynamic and data-
driven field that harnesses the power of analytics to extract meaningful insights from financial
data. Data analytics in AIS involves the systematic collection, processing, and analysis of
financial data to gain a deeper understanding of an organization's financial health, performance,
and operational efficiency (Batty, 2018).

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 2. Reasons why companies need data analytics in accounting
Data analytics has become indispensable in the realm of accounting for several compelling
reasons:

Figure: usages of data analytics

Improved Decision-Making:

Data analytics equips companies with the ability to extract valuable insights from financial data
(Chen et al.,2022). By scrutinizing historical financial information, organizations can make more
informed decisions regarding resource allocation, cost management, and strategic planning.

Fraud Detection and Prevention:

One of the critical roles of data analytics in accounting is its capacity to detect anomalies and
irregularities in financial transactions (Huerta and Jensen, 2017). Advanced analytics tools can
flag suspicious activities, aiding in the early detection and prevention of fraud, embezzlement,
and financial mismanagement.

Enhanced Operational Efficiency:

Companies can optimize their operations by leveraging data analytics (Porter and Linde,2021).
This involves identifying inefficiencies, streamlining processes, and reducing unnecessary costs
based on data-driven insights.

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Regulatory Compliance:

In the complex world of financial regulations, data analytics helps companies maintain
compliance. It ensures that financial reports adhere to accounting standards and are filed
accurately and on time, reducing the risk of legal and financial penalties.

Risk Management:

Analytics aids in assessing and managing financial risks. By analyzing historical financial data
and market trends, companies can identify potential risks and develop strategies to mitigate
them, thereby safeguarding their financial stability.

Strategic Planning:

Through predictive analytics, organizations can create models that forecast future financial
performance. This is crucial for setting realistic financial goals, developing long-term strategies,
and anticipating market shifts (Xu et al.,2020).

Cost Reduction:

Analytics can identify opportunities for cost reduction. By analyzing cost drivers and
expenditure patterns, companies can make data-informed decisions to cut unnecessary expenses
and allocate resources more efficiently.

Competitive Advantage:

Companies that effectively utilize data analytics gain a competitive edge (Mayer et al.,2020).
They can adapt more rapidly to market changes, identify emerging opportunities, and fine-tune
their financial strategies to stay ahead of the competition.

Performance Evaluation:

Analytics provides an objective basis for evaluating the performance of various business units,
products, or services. This information empowers managers to make decisions based on data,
allocate resources effectively, and plan for growth.

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Data Visualization:

Data analytics tools often offer intuitive data visualization capabilities, making it easier for
stakeholders to comprehend complex financial information (Zhou et al.2019). Visual
representations like charts, graphs, and dashboards facilitate better communication and
understanding.

3. Data analysis techniques used by modern accountants

Organizations of all sizes can take advantage of all four types of analytics to answer a wide range

of questions:

Figure: Data analysis techniques

Let’s explore descriptive, predictive, prescriptive, and diagnostic analytics and how they relate to

one another.

Descriptive Analytics
Descriptive analytics is typically the starting point in business intelligence. It uses data
aggregation and data mining to collect and organize historical data, producing visualizations
such as line graphs, bar charts, and pie charts. Descriptive analytics presents a clear picture of
what has happened in the past, such as statistical modelling does, and it stops there — it doesn’t
make interpretations or advise on future actions (Carvalho et al.,2019). Descriptive analytics is a
form of analysis that tries to answer the question "What happened?" As such, it takes historical

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data to understand changes that have taken place. This allows companies to draw comparisons
with other reporting periods or similar companies. By employing descriptive analytics,
companies are better able to identify inefficiencies in their operations and make changes for the
future.

Diagnostic Analytics
Once you know what happened, you’ll want to know why it happened. That’s where diagnostic
analytics comes in. Understanding why a trend is developing or why a problem occurred will
make your business intelligence actionable. It prevents your team from making inaccurate
guesses, particularly related to confusing correlation and causality. Typically, there is more than
one contributing factor to any given trend or event. Diagnostic analytics can reveal the full
spectrum of causes, ensuring you see the complete picture. You can also see which factors are
most impactful and zero in on them. For diagnostic analytics, you’ll use some of the same
techniques as descriptive analytics, but you’ll dive deeper with drill-downs and correlations. You
may also need to bring in outside datasets to more fully inform your analysis. Sigma makes this
easy, especially when connected with Snowflake’s powerful capabilities.

Note: Because diagnostic analytics is used to identify the origin of business issues and find
appropriate solutions to prevent them from happening in the future, it is also called root cause
analysis (Mcbride and Philippou, 2022)

Predictive Analytics
When you know what happened in the past and understand why it happened, you can then begin
to predict what is likely to occur in the future based on that information. Predictive analytics
takes the investigation a step further, using statistics, computational modelling, and machine
learning to determine the probability of various outcomes. Predictive analytics both forecasts
possible future outcomes and identifies the likelihood of those events happening ( Hall, 2020). It
helps organizations with better planning and realistic goal-setting as well as avoiding
unnecessary risk. It also allows teams to more accurately anticipate future performance based on
past performance and all the factors currently affecting it. One of the most valuable forms of
predictive analytics is what-if analysis, which involves changing various values to see how those
changes will affect the outcome. When business teams can conduct rapid, iterative analysis to

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evaluate options, they’re empowered to make better decisions faster. Sigma was designed with
this capability.

Prescriptive Analytics
Prescriptive analytics is where the action is. This type of analytics tells teams what they need to
do based on the predictions made. It’s the most complex type, which is why less than 3% of
companies are using it in their business. While using AI in prescriptive analytics is currently
making headlines, the fact is that this technology has a long way to go in its ability to generate
relevant, actionable insights. The use of AI at scale requires running thousands of queries in
search of statistical anomalies. But randomly identified anomalies don’t always point directly to
business opportunities. At least until AI technology advances, uncovering truly meaningful
business insights requires human involvement analyzing data in the context of business
processes, market trends, and company goals, and interpreting it (Carvalho et al.,2019).
Prescriptive analytics anticipates what, when, and why an event or trend might happen. It tells
you what actions have the highest potential for the best outcome. It allows teams to fix problems,
improve performance, and jump on valuable opportunities.

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 4. Tools and software for data analytics
Data analytics is a critical component of decision-making and business strategy across various
industries (Charnes et al.,2020). To effectively perform data analytics, professionals rely on a
wide range of tools and software to gather, process, analyze, and visualize data. we will discuss
various types of tools and software commonly used for data analytics.

Accounting Software:
Accounting software is primarily designed for financial data management and reporting. While
not typically associated with data analytics, it plays a vital role in financial analytics and
tracking. Some popular accounting software options include QuickBooks, Xero, and
FreshBooks. These tools provide features for bookkeeping, invoicing, expense tracking, and
financial reporting, which are essential for data-driven financial decision-making.

Spreadsheets/Excel:
Microsoft Excel is perhaps one of the most widely used tools for data analytics. It provides a
familiar and user-friendly interface for data manipulation, analysis, and visualization. Excel
supports complex calculations, pivot tables, and charts, making it an accessible choice for users
at all skill levels (Bonthu, and Bindu, 2017). For more advanced data analytics tasks,
professionals often use functions like VLOOKUP, pivot tables, and macros within Excel.

Data Mining Tools:

Data mining tools are specifically designed to discover patterns, correlations, and anomalies
within large datasets. Some popular data mining tools include:

RapidMiner: It offers a user-friendly interface for data preparation, machine learning, and
predictive modelling.

Weka: A Java-based software with a wide range of data mining algorithms.

KNIME: An open-source data analytics platform that allows users to build data workflows
visually.

These tools are invaluable for exploring large datasets and extracting valuable insights.

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Statistical Analysis Tools:

Statistical analysis is fundamental to data analytics, as it helps to identify trends and relationships
within data. Some widely used statistical analysis tools include:

R: An open-source programming language and software environment for statistical computing

and graphics.

SAS: A comprehensive software suite for advanced analytics, business intelligence, and data
management. These tools are crucial for performing descriptive and inferential statistics to draw
meaningful conclusions from data.

Advanced Reporting Tools:

Advanced reporting tools enable users to create interactive, visually appealing reports and
dashboards to communicate data insights effectively. Some prominent options include:

Tableau: A powerful data visualization tool that allows users to create interactive and
shareable dashboards.

Power BI: A Microsoft product for creating interactive reports and visualizations.

QlikView: A self-service BI and data visualization platform. These tools make it easier to
present data in a format that is understandable to a broader audience.

In conclusion, data analytics tools and software are essential for organizations to make informed
decisions, improve operations, and gain a competitive edge. The choice of tools largely depends
on the specific requirements and the skillset of the users. Some tools may be more suitable for
financial analytics, while others are better for data mining, statistical analysis, or reporting. In
practice, a combination of these tools is often used to cover the full spectrum of data analytics
needs, ensuring that businesses can harness the power of data for strategic advantage (Bonthu,
and Bindu, 2017).

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 5. Data analytics for financial reporting
Data analytics helps a company evaluate historical data to understand the current and future
financial conditions perfectly. With the help of modern software and tools, a company can easily
locate and extract data from various documents, including profit and loss statements, balance
sheets and cash flow statements (İdil et al.,2018). This minimizes the chances of any unwanted
errors and the data can be recorded as up to date. In financial reporting, data analytics help
uncover deeper insights and trends in the data. Data analytics also helps understand the patterns
and anomalies in the data. This helps the top management to make informed decisions and can
gain the trust of the investors to invest in the company.

Financial statement analysis

Data analytics helps a company to extract deeper insights from financial data by using different
tools and techniques of data analytics. Financial statement analysis is the process of examining
and validating the financial statements of a company to evaluate the financial performance,
strength and prospects (Aboud and Robinson, 2022).

Figure: Accounting analytics.

Data analytics can help the analysts present the financial statement’s data in some structured
format or an analytical format like graphs, charts, histograms etc (Curry et al., 2017). This helps
the relevant parties understand the trends and patterns of the data. And they can also use the
structured data to make predictions about the financial health of the company. Here’s how data
analytics can be applied to financial statement analysis:

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 1) Data collection and preparation: Data analytics for financial statements begins with
collecting financial data from the sources. Then the data is edited and organized for the
analysis. For these, different types of data analytics tools are used like Excel, python,
accounting software etc.
2) Trend analysis: With the help of data analytics, analysts can track and visualize the
trends within data. Trend analysis includes revenue growth trends, expense trends,
profitability ratios and more. Trend analysis helps understand the financial performance
and health of a company.
3) Ratio analysis: From the financial statement various types of ratios can be calculated
like liquidity ratios, leverage ratios, profitability ratios etc. Data analytics can automate
the calculation and can help easy comparisons with prior data and with different
companies (İdil et al.,2018).
4) Forecasting: Data analytics can analyze the time series data and can run regression
analysis to forecast future financial health based on past data.
5) Anomaly detection: A major advantage of data analytics is that it can detect any kind of
anomaly in the financial statements.
6) Visualization: different types of data visualization tools such as Power BI or Tableau
etc. can be used to generate dashboards and reports. This helps the analysts to
communicate and find data from reports easily.

Detection of financial fraud

In the business world, financial fraud is a very concerning matter. It leads to huge losses to
companies and individuals. So, detection of financial fraud has become very important because
organizations want to prevent and mitigate fraudulent activities. In this case, data analytics can
help find patterns, anomalies, and unusual behavior in financial activities that might lead to
committing fraud (Xu et al.,2020). Data analytics can successfully detect fraud.

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 Figure: Fraud prevention

Here’s how data analytics can be used to detect financial fraud:

1) Data collection and integration: From relevant sources such as accounting systems,
invoices, purchase orders etc., using data analytics analysts can collect data and integrate
those data into a centralized data repository for analysis.
2) Data cleaning and preprocessing: Using data analytics, analysts can remove errors and
inconsistencies in the data. This ensures that data is accurate, consistent, free from errors
and suitable for analysis.
3) Data visualization: Data analytics can help visualize the data to identify patterns,
trends, anomalies and potential areas for concern. Through visualization, we can get an
overview of the data (Freese et al., 2016).
4) Statistical analysis: Through visualization, we will get the overview of data and then
we can perform statistical analysis to identify patterns and deviations from the expected
financial result.
5) Anomaly detection: Through statistical methods, clustering or machine learning
algorithms data analytics can help find unusual transaction amounts, frequencies and
patterns.
6) Pattern recognition: There are some common fraudulent activities. Data analytics can
help recognize the patterns related to those activities (Lee ,2017).
7) Network analysis: Network analysis is very useful in identifying the relationship
among parties involved in fraudulent activities.

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 8) Text analysis: Through Natural Language Processing, unstructured data, emails or
documents can be analyzed so that suspicious communication associated with fraud can
be identified (Al-Hashedi, and Magalingam, 2021).
9) Continuous development: Regularly updating the fraud detection model can help
identify future chances of fraud.

6. Audit data analytics

According to the AICPA, “Audit data analytics (ADAs) are a technique that can help leverage
current technologies and move toward a more data-driven approach to planning or performing
an audit”

Figure: Audit Data Analytics

One of the biggest advantages of audit data analytics is that we can audit the entire population. If
the company has 100000 sales transactions, with the help of audit data analytics we can test the
entire 100000 sales transactions ( Eilifsen et al.,2020)

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The AICPA has outlined 5 key steps to using audit data analytics:

Figure: Steps in Audit Data Analytics (ADA)

1) Plan the Audit Data Analytics: The audit team should have proper knowledge of
applying data analytics considering the nature, timing and extent of the audit engagement.
2) Access and prepare the data for purposes of the ADA: The audit team will identify the
relevant data from the source to ensure that the data is in usable format. Then, the auditor
will prepare the data for analysis.
3) Consider the relevance and reliability of the data used: The relevance and reliability
of data depends on the data’s original source and how the data was entered (Eilifsen et
al.,2020). The auditor must assess whether the data is original or it has been transformed
by the audit team. Then the auditor must check the quality of the data.
4) Perform the ADA:
Once the auditor has performed the audit data analytics, they must subsequently analyze
the results. If the initial results of the ADA indicate that aspects of its design or
performance need to be revised, make appropriate revisions and reperform the ADA
5) Evaluate the results: Once the audit data analytics is done, the auditor should evaluate
the results to check the accuracy of the results. If there is any error exists in the results,
the auditor should analyze the data again to find out the underlying reasons.

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 7. Case Study:

Shipfix stands at the forefront of a maritime industry revolution, fundamentally changing how
the dry market cargo sector is analyzed and managed. This pioneering data and community
platform serves as a catalyst for innovation, simplifying and enhancing the commercial and
operational aspects within the Dry Bulk and Break Bulk maritime markets. Shipfix's impact is
felt not only by individual stakeholders but also resonates within the global business landscape.
It caters to the needs of large enterprises seeking heightened operational efficiencies and deeper
market insights, offering a comprehensive solution that transcends traditional boundaries,
making maritime operations more efficient and informed. Shipfix's commitment to progress is
reshaping the maritime sector, providing a visionary approach to addressing the challenges and
complexities of managing dry cargo in today's dynamic global trade environment.

Challenges
Maritime professionals receive a staggering volume of unstructured emails daily, from which
they must extract market insights and conclusions. This process is not only time-consuming but
also fraught with risks associated with human error and information overload. Shipfix recognized
the opportunity to streamline this workflow, making it more efficient and cost-effective by
implementing machine learning to scan and analyze market insight emails. The goal was to
provide users with a platform that could deliver relevant insights and data at their fingertips.

Solutions
To tackle this challenge, Shipfix forged a strategic partnership with Spire Maritime, integrating
AIS data and market insights into a single API. Here's how it works:

1) Analysis: Shipfix processes up to 2 million market insight emails, extracting vital

information, including tonnage, open dates, open/load areas, cargo specifications, and
vessel types.
2) Cross-referencing with AIS Data: Shipfix leverages Spire Maritime's extensive
database, processing a staggering 1.5 billion AIS messages per month. This data is a

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 goldmine of real-time vessel information, offering a deep insight into vessel positions,
routes, and activities.
3) High-Quality Market Insights: By combining email-derived information with AIS data,
Shipfix provides traders and analysts with a unified, easy-to-use interface that offers key
market insights. This data allows users to track vessels in real-time, analyze global trade
flows for commodities, understand seasonal trade patterns, and grasp economic cycles.

Results
The impact of Shipfix's innovative approach to maritime market analysis has been profound:

1. Comprehensive Platform: Shipfix now acts as a central repository for a wealth of

metadata, including information about ships, voyages, commodity flows, ports, and
bunkers. This consolidation streamlines operations, making it easier for professionals to
access the data they need.
2. AIS Data Integration: By providing AIS data and raw Dry Bulk market insights within
the same platform, Shipfix offers a holistic solution that is both innovative and modern.
Users can now access real-time vessel positions and perform complex analyses with ease.
3) Billions of Vessel Positions: Each month, Shipfix processes billions of vessel positions,
offering unparalleled insights into global maritime activities. These insights empower
maritime professionals to make more informed decisions, improve operational efficiency,
and mitigate risks effectively.

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 8. Data Security & Privacy
In the digital era, data has become the lifeblood of individuals, organizations, and governments.
The rapid proliferation of data, driven by technological advancements, has led to an increased
focus on data security and privacy (Brewer et al., 2020). This discussion aims to provide a
comprehensive understanding of the subject, examining its importance, key challenges, and best
practices, drawing upon a range of scholarly articles and reports.

Importance of Data Security and Privacy

1) Protecting Sensitive Information

Data security is paramount for safeguarding sensitive information. Personal details, financial
data, and intellectual property are prime targets for cybercriminals. Unauthorized access can lead
to identity theft, financial fraud, and intellectual property theft (Arellano et al., 2018).

2) Trust and Reputation

Preserving trust among customers, clients, and stakeholders is another compelling reason to
prioritize data security and privacy. Data breaches erode trust and can result in significant
reputational damage, affecting the long-term viability of an organization.

3) Legal and Regulatory Compliance

Legal and regulatory frameworks, such as the European General Data Protection Regulation
(GDPR) and the Health Insurance Portability and Accountability Act (HIPAA) in the United
States, require strict adherence to data protection standards. Compliance is not just a matter of
ethics but also a legal obligation to avoid severe penalties.

4) Economic and Societal Impact

Data breaches and privacy violations carry substantial economic and societal implications. The
financial cost of breaches, including fines, legal fees, and recovery efforts, is significant.
Moreover, these incidents can undermine public trust in technology and society's overall sense of
security.

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Data Security Measures
Encryption

Encryption is a foundational data security measure that protects data in transit and at rest. It
scrambles data, making it unreadable without the proper decryption key. This method is vital for
ensuring confidentiality and data integrity (Al-Fuqaha et al., 2019).

Access Control

Implementing strict access control mechanisms ensures that only authorized individuals can
access sensitive data. Access can be restricted based on roles and responsibilities, reducing the
risk of unauthorized access.

Regular Software Updates

Frequent software updates are crucial to patch vulnerabilities and protect against evolving cyber
threats. Delayed or ignored updates can leave systems vulnerable to exploitation.

Data Privacy Measures

Data Minimization

Collecting only necessary data minimizes privacy risks and compliance burdens. By limiting the
data collected to what is essential, organizations reduce the potential for misuse and unauthorized
access.

Consent Mechanisms

Obtaining explicit consent from individuals before collecting their data is a fundamental privacy
measure. Informed consent ensures that individuals are aware of what data is being collected and
for what purposes.

Anonymization

Anonymizing data can protect privacy while allowing for useful analysis. Removing personally
identifiable information from datasets while preserving their utility is a key privacy practice.

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 9. Future trends data analytics for accounting information
systems
Data analytics in Accounting Information Systems (AIS) is continually evolving, and several
future trends are expected to shape its development and adoption. Here are some of the key
trends can expect in the accounting information systems:
1) Artificial Intelligence:

There have been a number of technological advances that have revolutionized the way
businesses around the world operate, including machine learning, artificial intelligence, robotics,
and automation, among others. Data analysis is rapidly evolving with AI, upping human abilities
at both the personal and professional levels, as well as assisting businesses to gain a better
understanding of the data they collect future of data analytics in AIS (Haberly et al.,2019).

2) Data Democratization:

Data democratization aims to empower all members of an organization, regardless of technical

expertise, to interact comfortably with data and to discuss it confidently, ultimately leading to
better decisions and customer experiences. With data democratization, non-technical users can
gather and analyze data without the assistance of data stewards, system administrators, or IT staff
(Minovski et al.,2020)

3) Predictive Analytics:

Predictive analytics will gain popularity in AIS, allowing organizations to forecast financial
trends, identify potential risks, and make proactive decisions based on data-driven insights.

4) Blockchain Integration:

Blockchain technology is increasingly being used in AIS to enhance transparency, security, and
traceability of financial transactions. It will be instrumental in reducing fraud and improving
audit processes.

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4) Data Privacy and Security Emphasis:

Since data breaches and privacy concerns continue to be significant issues, there will be a greater
emphasis on securing financial data within AIS. Compliance with data protection regulations
will be a priority.

5) Integrated reporting:

Reporting frameworks, such as the International Integrated Reporting Framework, will become
more widely adopted, promoting the integration of financial and non-financial information in a
single report (Haberly et al.,2019.

6) Cross-functional Use:

Data analytics in AIS will not be limited to finance departments. Other business functions, such
as marketing, supply chain, and HR, will also leverage AIS for data-driven decision-making.

7) Regulatory Changes:

As financial reporting standards and regulations evolve, AIS will adapt to ensure compliance
with new requirements. This includes the integration of ESG (Environmental, Social, and
Governance) reporting.

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10. Challenges faced when implementing data analytics in
accounting information systems
Implementing data analytics in accounting information systems (AIS) comes with a unique set of
challenges, as it involves integrating data analytics into the existing AIS infrastructure
(Rikhardsson and Yigitbasioglu,2018). Here are some of the challenges faced when
implementing data analytics in accounting information systems:

1.Collecting meaningful data:

There’s data for every aspect of business, which more than often overwhelms employees. The
plethora of data from different channels makes it difficult for employees to drill down and
determine the critical insights (Huerta and Jensen, 2017). And they end up analyzing the data
that’s readily available and not the one that truly adds value to the business. It can be impossible
to gain real-time insights on what is currently happening. Outdated data can have significant
negative impacts on decision-making.

2. Visual representation of data

To be understood and impactful, data often needs to be visually presented in graphs or charts.
While these tools are incredibly useful, it’s difficult to build them manually. Taking the time to
pull information from multiple areas and put it into a reporting tool is frustrating and time-
consuming.

3. Consolidate data from multiple sources

Data comes from scattered and disjointed sources. For instance, you will need to pull data from
your website, social media pages, CRM portals, financial reports, e-mails, competitors’ websites,
etc. The data formats of most of these reports will obviously vary. Combining and analyzing
them in one place is one of the common challenges in data analytics. It can turn out to be more
complicated if done manually. And it also increases the chances of error, making the data
unreliable.

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4. Quality of data collected

Nothing can be more dangerous in data analytics than incorrect data. If the input quality of data
is flawed and erroneous, the output can never be reliable. One of the primary reasons behind
inaccurate data is errors made during data entry, i.e., manual errors. Another reason for poor
quality data is the disparity in data (Huerta and Jensen, 2017).. Suppose your data operator
makes changes in one system and forgets to make the exact change in others; it will create
asymmetric data.

5. Data security

AIS contain sensitive financial and personal information. Ensuring data security and privacy is
crucial. Implementing data analytics without compromising security is challenging (Dwivedi et
al., 2019).

6. Resource Constraints:

Implementing data analytics in AIS often requires significant investments in terms of

technology, skilled personnel, and infrastructure. Smaller organizations may face resource
constraints.

7. Scaling data analysis

Finally, analytics can be hard to scale as an organization and the amount of data it collects
grows. Collecting information and creating reports becomes increasingly complex. A system that
can grow with the organization is crucial to manage this issue.

8. Shortage of skills

Some organizations struggle with analysis due to a lack of talent. This is especially true in those
without formal risk departments. Employees may not have the knowledge or capability to run in-
depth data analysis.

9. ROI Measurement:

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Demonstrating the return on investment for implementing data analytics in AIS can be difficult,
as the benefits may not be immediately apparent (Minovski et al.,2020).

10. Data Governance:

Developing effective data governance policies and procedures is essential for maintaining data
accuracy and consistency within the AIS. Ensuring proper data governance in the context of data
analytics can be challenging.

10.Conclusion
So, it is clear that data analytics is enhancing the activities of accounting information systems.
Everyday organizations are dealing with big data. So, with the help of data analytics,
organizations are able to properly keep the tracks of their accounts and can properly process the
data to generate necessary and accurate information.

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 11.References
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explanatory study from Ireland. Accounting Research Journal, 35(1), pp.21-36.

Al-Fuqaha, A., Guizani, M., Mohammadi, M., Aledhari, M., & Ayyash, M. (2019). Internet of
Things: A Survey on Enabling Technologies, Protocols, and Applications. IEEE
Communications Surveys & Tutorials, 17(4), 2347–2376.
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Al-Hashedi, K.G. and Magalingam, P., 2021. Financial fraud detection applying data mining
techniques: A comprehensive review from 2009 to 2019. Computer Science Review, 40,
p.100402.

Arellano, A. M., Dai, W., Wang, S., Jiang, X., & Ohno-Machado, L. (2018). Privacy Policy and
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129. https://doi.org/10.1146/annurev-biodatasci-080917-013416

Batty, E., 2018. Data analytics enables advanced AIS applications. In Mobility Analytics for
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Germany, September 1, 2017, Revised Selected Papers 1 (pp. 22-35). Springer International
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