Analytics and Big Data for Accountants, 2nd Edition

Chapter 1What Are Big Data and Analytics?

Learning objectives

• Identify the three different types of data.
• Recall what type of data volume big data represents.
• Recognize big data terminology.

Introduction

In the early 20^th century, businesses kept track of financial and operational results using paper and ink. It was difficult enough just to record the date of the transactions, let alone summarize information with financial statements. The main form of automation that helped improve the efficiency of accounting clerks was limited to innovations in carbon copy paper, mimeograph machines, copy machines, and the like. When computers were finally available for operational and financial use, the systems were based on a batch recording of transactions. Again, the focus was on capturing internal data to help an organization understand its financial and operational results. As computers advanced and became more powerful, the focus increased in obtaining more internally generated operational and financial information as well as analyzing the myriad information because of increased computing power, increased data, and more userfriendly tools.

Prior to the advent of the internet, an organization worked mainly with its internal data. With the subsequent advances in internet use in the latter half of the 20^th century and the beginning of the 21^st century, external information became accessible that could be integrated with internal data. Companies moved from producing batch information ...