Data analytics strategy and internal information quality
Contemporary Accounting Research · 2024 · Volume 41 · Issue 2
Abstract
I examine whether a strategic focus on data analytics is associated with improvements in firms' internal information quality. Using textual analysis of firm disclosures to identify a data analytics strategy, I first document that firm, leadership, and operating environment characteristics are all important determinants of the decision to adopt a data analytics strategy. I next use operating and financial reporting outcomes to infer whether a data analytics strategy improves internal information quality. I find that a data analytics strategy is associated with enhanced operating efficiency, as adopting firms invest and utilize existing resources more efficiently. I also find that a data analytics strategy is associated with more accurate management forecasts. These results, collectively, are consistent with a data analytics strategy improving firms' internal information quality. Lastly, I corroborate and extend my findings with job postings data, and the results suggest that firm leadership signals their support for data analytics initiatives through disclosure.
Keywords
big data, data analytics, financial reporting quality, information quality, operating performance, analyse des données, mégadonnées, qualité de l'information, qualité de l'information financière, rendement opérationnel
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