Application of data analytics within the advisory sector

Abstract

Purpose: Data Analytics is a fast-growing field that is becoming of greater significance to the modern-day accountant. This study aims to evaluate the degree of implementation and value derived from DA within the advisory sector of the Big 4 and large mid-tier accounting firms in Malta. Design: Given the nature of this study, a qualitative research design consisting of 15 semi-structured interviews was chosen. This allowed for an in-depth analysis to be undertaken whereby the salient points emerging from the interview responses were analysed. Subsequently, thematic analysis was used to assign codes to any relevant patterns that emerged. Findings: Over the past few years, DA adoption, in particular within the Big 4, has increased considerably. The interviewees indicated that DA resulted in new methods to be introduced, allowing increased data to be analysed as a result of the time savings derived. Nonetheless, certain reservations regarding the data quality of the client firms were raised. However, the provision of advisory services to aid clients in the collection of the data, as well as improved analytical techniques within the accounting firms, are facilitating this process. Furthermore, an increase in awareness surrounding DA within the Big 4 was observed. The healthy competitive attitude adopted was of value to these firms who quickly became market leaders in this area. Simultaneously, client firms were described as being impressed by the valuable insights derived, allowing for improved decision-making. Conclusions: The study concludes that DA allows accounting firms to focus on more high-level tasks and have greater confidence in the advice they issue. The findings suggest that greater attention should be directed towards the manner by which data is collected by client firms. Additionally, mid-tier firms who undertake a shift in their mentality and recruit competent DA professionals have the capacity to make significant strides, similar to those observed within the Big 4 recently. Value: This was the first local study to investigate the relationship of DA within the context of accounting firms’ advisory sector specifically. The insight derived can be of use to any organisations offering out DA advisory services, in particular those mid-tier accounting firms and boutique firms that had not seriously considered DA as of yet. Moreover, this awareness may help entice clients to better harness their data and seek out such advisory services where necessary.