The role of statistics in Accounting profession – SAN LINKZ
Both Accounting and Statistics are tools for decision making with respect to their uses. For an Accountant to make decision concerning average, marginal and standard, He has to adopt statistical tools.
Statistics is very important in accounting profession due to its indispensable role in the summarizing, presenting and reporting of accounting information for effective communication in an organization. Statistical tools like graphs, histograms, bar charts, pie charts etc can be used to effectively summarize and communicate financial information to end users.
Trend analysis in statistics can be used for predictions and budgeting. Distributions like t, z etc can also be adopted into accounting profession.
According to Ask.com, Accountants in various fields, including auditors, forensic accountants, controllers and risk accountants, use statistics to accomplish their professional duties. Accountants who conduct audits use samples that are statistically representative of a data base because it is almost impossible to collect all the data needed in a short period of time. Auditors typically use this method when conducting a reliability assessment to determine the accuracy of the data being audited.
Forensic accountants depend on statistical methods to analyze financial instruments that may be used to perpetrate financial fraud. By understanding statistical principles, forensic accountants correctly estimate whether the valuation of the risk associated with financial instruments was appropriate.
Controllers are typically in charge of all the financial operations of a company. Some of their main responsibilities are to perform cost analyses, provide financial forecasts and compile budget reports. Controllers apply their knowledge of statistics to develop the appropriate forecasts and analyses that promote the success of the company.
Risk management accountants use the statistical principles of distribution and correlation to account for risks when setting a valuation. Risk accountants also apply statistics principles to limit the range of valuation errors and to specify a premium that is appropriate for the risk associated with a particular forecast.
The role of statistics in Accounting profession – SAN LINKZ
