Accounting: Business Reporting for Decision Making 7th Edition by Jacqueline Birt Solution manual

It is important for accountants and other business professionals to have the skills to understand data analytics. Accountants need to be able to blend data from different sources (e.g. company reports, ASX data, government data, economic data), use analytical tools to draw insights into the data, make decisions based on the data and communicate their findings to other parties (e.g. management, board, investors).
In addition, the blockchain creates many opportunities and challenges for the accounting profession. Some of the current accounting and audit roles will diminish, as there will be less need for accountants and auditors to perform the transaction processing, reconciliation and control-type tasks. However, there will be new opportunities for auditors in overseeing and auditing the blockchain.
 
 
1.10    Give an example of the role accounting information plays in the investment planning for a retired footballer and a retired schoolteacher.
 
Accounting provides us with a language to help understand the decision-making process associated with investment planning. A retired footballer would use accounting to initially work out a strategy for investing earnings and then to help keep track of his/her investments which could include property, shares, luxury cars and so on. A retired schoolteacher would have a superannuation fund and possibly other investments. Accounting knowledge would assist in helping to interpret the annual returns and fees from a superannuation policy and the performance of the assets invested by the superannuation fund. It could also assist in choosing investments that would provide most benefits to the retiree.
 
 
1.11      Why has the globalisation of accounting become so important for accountants?
 
In recent years, entities have become larger, more diversified and multinational. Currently, two-thirds of US investors own shares in foreign entities that report their financial information using IFRS. 166 countries worldwide have now adopted IFRS and, in years to come, the rest of the world will most likely adopt a single set of high-quality accounting standards that will meet the needs of all users.
 
 

 
1.12       How does data analytics help accountants make decisions?
 
Accountants use data analytics to help businesses uncover valuable insights within their financials, identify process improvements that can increase efficiency and better manage risk. Here are some examples.

• Auditors, both those working internally and externally, can shift from a sample-based model to employ continuous monitoring where much larger data sets are analysed and verified. The result: less margin of error resulting in more precise recommendations.
• Tax accountants use data science to quickly analyse complex taxation questions related to investment scenarios. In turn, investment decisions can be expedited, which allows companies to respond faster to opportunities to beat their competition and the market to the punch.
• Accountants who assist, or act as, investment advisors use big data to find behavioural patterns in consumers and the market. These patterns can help businesses build analytic models that, in turn, help them identify investment opportunities and generate higher profit margins.

 
 
1.13 Explain the role of the blockchain in cryptocurrencies.  
 
Blockchain technology supports cryptocurrencies such as Bitcoin. A blockchain is a structure of data that represents a financial ledger entry. The blockchain’s data is partitioned into blocks and these blocks are linked together using cryptographic signatures.
 
 
1.14      What are the six capitals that an integrated report is focused on?
 
An integrated report is based on the six capitals: financial capital, manufactured capital, human capital, intellectual capital, natural capital, and social and relationship capital.
 
 
1.15    What is the role of the International Integrated Reporting Council? What is its strategy?
 
In August 2010, the International Integrated Reporting Council (IIRC) was formed to create a globally accepted framework for integrated reporting. Their strategy was to create the foundations for a new reporting model to enable organisations to provide concise communications about how they create value over time.
 
 
The IIRC's stated objective is to develop an internationally accepted integrated reporting framework by 2014 to create the foundations for a new reporting model to enable organisations to provide concise communications of how they create value over time.