Big Data Analytics and Financial Reporting Quality

Abstract

The study examined big data analytics and financial reporting quality. It highlights the transformative potential of big data analytics on financial reporting. There are debates that modern techniques of data analytics would possibly affect financial reporting quality with the notion that big data analytics has the capacity of changing the functions and roles of accountants, thereby creating more value added. This study implores data duality theory and institutional theory to establish its relevance to big data analytics and financial reporting quality. The study highlighted the positive implication of big data analytics in improving financial reporting quality through enhanced timeliness, accuracy and transparency. However, there is slow integration of financial reporting into the modern techniques of data analytics which makes it difficult for financial reports to achieve higher quality and more value added. This conceptual paper adopts a qualitative approach involving critical analysis, literature and theoretical exploration describing how big data analytics can enhance financial reporting. It interrogates how various financial accounting procedures and practices could be affected due to the introduction of big data; how financial accounting can develop large data banks and adapt new business models in their analytics; how challenges like data quality, security and regulatory compliance can be tackled alongside the implications for practice, academics and future research. Big data analytics has become necessary in resolving all of these questions. Thus, it is of importance that organizations imbed the culture of employing qualified personnel, training and retraining of their staff on big data analytics, including staff accounting department.