Financial Reporting Using Data Analytics|
Depending on how it is crafted and produced financial reporting can create
opportunities, or conversely, issues for management. First and foremost a
financial report is a communication tool. With the exception of regulatory
filings such as SEC financial filings, the message that a financial report
conveys to the reader is at least in part controlled by the report creators.
The question that management decision makers need to ask themselves is 'What
message do I want to send to my intended audience with this report and how
can I be sure that this will occur?'
Practicing the Art of Communication
Someone once said that the biggest problem with communication is the
assumption that it's been accomplished. The targeted audience for financial
reports will typically include investors, lenders, shareholders, analysts -
individuals and groups that have the power, through their actions or
inaction, to exercise significant influence over company prospects. For
senior managers and company ownership, the stakes involved in sending the
right message are therefore far too great to leave anything to chance.
Financial reporting using data analytics involves utilizing data analysis techniques to focus reader attention and reveal
those aspects of financial results or future expectations that reflect the
intended message. This allows company decision makers to optimize the value of
financial reports as communication tools.