Accountants in various fields, including auditors, forensic accountants, controllers and risk accountants, use statistics to accomplish their professional duties. Accountants who conduct audits use samples that are statistically representative of a data base because it is almost impossible to collect all the data needed in a short period of time. Auditors typically use this method when conducting a reliability assessment to determine the accuracy of the data being audited.
Know MoreForensic accountants depend on statistical methods to analyze financial instruments that may be used to perpetrate financial fraud. By understanding statistical principles, forensic accountants correctly estimate whether the valuation of the risk associated with financial instruments was appropriate.
Controllers are typically in charge of all the financial operations of a company. Some of their main responsibilities are to perform cost analyses, provide financial forecasts and compile budget reports. Controllers apply their knowledge of statistics to develop the appropriate forecasts and analyses that promote the success of the company.
Risk management accountants use the statistical principles of distribution and correlation to account for risks when setting a valuation. Risk accountants also apply statistics principles to limit the range of valuation errors and to specify a premium that is appropriate for the risk associated with a particular forecast.
Learn more about Statistics"Residual" in statistics refers to the difference between the calculated value of the dependent variable against a predicted value. The mean and the sum of the residuals are always equal to zero, and the value is positive if the data point is above the graph and negative if below it.
Full Answer >Variance measures how the data in a given variable distribution are spread relative to the mean. Operationally, it is the average squared distance from the mean and is calculated by the square root of the standard deviation. Conceptually, it indicates how much variation is within a given sample.
Full Answer >Statistics is the study of numerical information, which is called data. People use statistics as tools to understand information. Learning to understand statistics helps a person react intelligently to statistical claims. Statistics are used in the fields of business, math, economics, accounting, banking, government, astronomy, and the natural and social sciences.
Full Answer >The main advantage of statistics is that information is presented in a way that is easy to analyze, which makes its conclusions easily accessible. Comparative statistical analysis allows people to identify the strengths and weaknesses of different strategies, programs, policies or products across multiple demographics, making it an indispensable tool for decision makers.
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