Q:

# How are statistics used in accounting?

A:

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.

## Keep Learning

Credit: Getty Images North America Getty Images News Getty Images

Forensic 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.

Sources:

## Related Questions

• A:

Individual player statistics kept by most high school basketball programs include points scored, assists, rebounds, steals and blocks. The basic statistical categories in basketball are based on the player's interaction with the basketball, as opposed to her movement and actions away from the ball.

Filed Under:
• A:

Misleading statistics are statistics that people use to defend bad or misleading arguments, often in an unfair or deceitful way. Bad sampling, whether due to bias or skewed sample sizes, can lead to a misleading statistic.

Filed Under:
• A:

Sampling, in statistics, is a method of answering questions that deal with large numbers of individuals by selecting a smaller subset of the population for study. One of the most prevalent types of sampling is random sampling.