Big Data Issue

The Problem of Big Data

The problem of big data has been on our minds for some time. However, recently it has emerged as a topic of discussion between people at different levels of the organization. The reason this topic has been gaining momentum lately is because of the major advances in technology, and all organizations are striving to ensure they achieve what they want by incorporating technology into their integrated operations. This has encouraged institutions to do their best to ensure that they get the information they have available, as they can apply the analysis to get the most out of it. This will make things a little bit simplified for organizations and lower the cost of obtaining necessary data to be used in decision-making. It should be noted that before the 21st-century firms used to deal with large volumes of data but it was very tedious (Alles, 2015). However, with the merits that come with the use of big data, there is every reason why this should be a topic of discussion. Additionally, organizations are applying this concept in various sectors to ensure that they can tap a large market share and deal with their competitors favorably in the industry. Therefore, in this case, we are going to carry out research to be in a position of understanding big data and the reason why it should be implemented in our organizations. Also, we will be in a position to know why the issue is becoming rampant in our business. Lastly, we should not forget that this is something new that is being introduced, and therefore, for the entire paper to be conclusive we are going to dig deep to the opportunities, challenges, and ethical implications associated with the implementation of big data.

Definitions

The term big data may be straightforward when defining what it means. However, this is not the case because after detailed study it seems that the concept is complex which consists of a variety of definitions so that a person can be in a position to understand what it means. Therefore, in the process, we will ensure that every individual would be in a place to comprehend the meaning of the term in every aspect it is used. The main reason why the definition of big data is unique it is because individuals have different opinions depending on the context of their applications. As a result, we can define big data as a popular term that is used to describe the collection of large amounts of data which may be unstructured or structured. However, it should be noted that it is not the amount that is significant but what the enterprise does with that information is what is essential. Therefore, big data can be considered as a tool that helps the organization to make vital decisions on how the firm will move ahead to achieve their long-term plans. Due to technicalities that exist data warehouses cannot manage to handle the processing demands of any business because data is regularly updated. As a result, it is essential for institutions to collect the data, process, and then analyze to get its value (Alles, 2015).

Another Definition of Big Data

The second definition of big data was adopted Gartner an information technology research center that helped in the development of the 3V's concepts in trying to define big data. They argue that data can be defined regarding high volume, velocity, and variety of information assets that require cost-effective techniques in ensuring that data is processed in an appropriate manner and used in decision making. This means that for big data to be of essence to the users, and then these three vital features must be taken into consideration when applying the relevant techniques to extract the information that is required. However, it is obvious that due to the improvement in technology it is possible to achieve these elements quickly and ensure that firms benefit appropriately. In broader definition, the first V represents the amount of data in discussion, and hence it is to understand in a straightforward manner, and it is the most challenging part because the firm must obtain necessary data and be able to store the information. Additionally, it will be useless for an organization to house huge amounts of data that it cannot be in position to process. The second V is velocity and measures the speed at which the firm can process the data they have already housed, and the last V represents the variety of data the company receives and has to process within a certain specified period.

Another Definition of Big Data

Another definition of big data is according to SAS a known institution in business analytics software. They define big data as a process of trying to examine and be in a position to uncover hidden patterns and other correlations so thee information can be meaningful and be used in decision-making. There is a big difference between big and traditional data because of the nature in which the data is captured, managed, and processed. Big data can be obtained from various sources such as online websites, sensors, log files, networks, and social media platforms which are generated very fast and in large scale. Therefore, firms that have incorporated big data they are in a position to get faster results and make informed decisions.

Opportunities

In the corporate world, we cannot undermine the role that is played by big data. Firms are working tirelessly to ensure that they are in a position to achieve their goals and boost their stock value, and big data opens a way to which they can attain what they want easily. With big data organizations are in a position to obtain adequate data that is required. The information obtained is analyzed and then interpreted to the managers for decision making. With this informed arguments are made and business is able to bring in the right resources and maximize what they already have to get maximum returns. Also, with the use of big data organizations are in a position to point out their weaknesses and areas in which they are supposed to make major changes if they want to achieve their goals. One of the main objectives of any enterprise is to minimize costs. Therefore, with big data this is already achieved because there are tools such as Hadoop that help in storing large amounts of data and help in identifying the best way in which business should be done. To save time and allocate it to more profitable sectors big data appears to be the solution (Moffitt et al., 2013). With the use of various tools, such Hadoop firms can identify new sources of information and help in analyzing it immediately and be in a position to make quick decisions of what has happened and the way forward. For any firm understanding market trends is very important. Therefore, by analyzing big data, they can get reliable information and clear understanding of the market conditions. For instance, by evaluating customer's purchasing power, a company can be able to the type of product they are supposed to produce according to the trends (Krahel & Titera, 2015).

Another Main Opportunity

Another main opportunity the accounting and auditing profession is benefiting from big data is that it has helped auditors to develop new ways in which they can gather the information they want about the organization and the manner in which they test so that they can be in a position to give an honest opinion. Traditional techniques allowed auditors to test a sample of population and make conclusions but with big data it is now possible to analyze the entire financial statements. This will give a true view of the business without any biasedness as compared to when a sample is used. This approach enables to use less time, analyze relevant data in a certain context to obtain full evidence to help them in making their own judgment regarding the operation of the firm. This even makes the documentation process very easier. With big data, auditors have an opportunity to widen their scope and audit both financial and non-financial information that is available due to technology and help them perform risk assessment and evaluate the credit rating of the firm (Imhoff, 2003).

Challenges

It is evident that big data has brought a lot of opportunities and some benefits in the accounting and auditing profession. However, to achieve this, there are several challenges they have to go through which include:

1. The work of the auditor is to obtain adequate data so that he or she can make an informed opinion. However, some organizations have advanced their security features by the use of technology, and this makes it impossible for the auditors to obtain the information they require. This makes the auditor write a letter seeking permission to check some files, but due to a high level of protection, they are allowed only to check a certain type of data which restricts them to the nature of the evidence they will obtain. At the same time, we very well know that organizations have their policies to follow, and therefore, if allowing the auditor to access the data will be violating those rules then it is obvious that permission will be denied making the work of the data very difficult. In the past the auditors had a unique procedure to follow in performing their duties. However, with the invent of big data there is need to study hard so that they can be in a position to know how data is stored and in which location and then start preparing themselves.

2. Ethical Implications

With big data organizations have the adequate information they can use to make a decision and develop strategies. However, the collection techniques used and the manner in which this information is analyzed are not transparent to customers, and this makes them start doubting the activities carried out by the firm. Additionally, they may be doing for their good, but the moment it is perceived not to be ethical the reputation of the corporation will be negatively being affected. Secondly, technology grows faster than the speed in which the control measures are put in place. This means that any organization that misuses the use of big data will be in trouble because the moment the image of the firm is tarnished, they will lose their revenues. Additionally, with the use of big data firms are intruding into the private information of their customers which at times may violate their terms and conditions. When consumers realize that the company has tampered with their information without their consent, they might sue them. Additionally, in the accounting and auditing profession auditors they are only required to obtain information that is relevant to the firm, but with big data, there is a possibility of getting more data that is not within their scope. This will be against the rules of any organization because of accessing private without permission.

Conclusion

Lastly, it is evident that with the use of technology firms can be obtaining huge volumes of data from various sources. As a result, of this, it will be essential for auditors to change the manner in which they approach their work and techniques they use. Therefore, starting from the engagement process, analytical, and audit procedures should change because of the amount of data available. Because it is possible to analyze the whole population auditors should ignore the sampling procedures they have been using. Without forgetting the future of accounting and auditing profession will be dependent on big data, and therefore, auditors should be prepared. Additionally, big data has some opportunities and challenges this means that auditors to capitalize on benefits and minimize challenges.

References

Imhoff, G. (2003). Accounting quality, auditing, and corporate governance.

Zadek, S., Evans, R., & Pruzan, P. (2013). Building corporate accountability: Emerging practice in social and ethical accounting and auditing. Routledge.

Vasarhelyi, M. A., Kogan, A., & Tuttle, B. M. (2015). Big data in accounting: An overview. Accounting Horizons, 29(2), 381-396.

Cao, M., Chychyla, R., & Stewart, T. (2015). Big Data analytics in financial statement audits. Accounting Horizons, 29(2), 423-429.

Moffitt, K. C., & Vasarhelyi, M. A. (2013). AIS in an age of Big Data. Journal of Information Systems, 27(2), 1-19.

Krahel, J. P., & Titera, W. R. (2015). Consequences of big data and formalization on accounting and auditing standards. Accounting Horizons, 29(2), 409-422.

Alles, M. G. (2015). Drivers of the Use and Facilitators and Obstacles of the Evolution of Big Data by the Audit Profession. Accounting Horizons, 29(2), 439-449.