This is the first book in the Auditmetrics three book "Small Business Analytics Power Series" designed as a resource in the use of analytics in conducting audits, forecasting future cash flow and conducting market research. The primary emphasis is a resource for small business. Large corporations have the resources to hire the high tech talent to implement analytic based business decisions. This book is designed to make such analytics readily available to small business especially in an environment of tight budgets.
This first book in the series details the principles of statistical sampling of business accounts, the corner stone of business analytics. It sets the stage for the other books that follow. Included with this book is a complimentary learning version of Auditmetrics V6.2 statistical audit software. It is the engine that uses assisted artificial intelligence to unleash the power and efficiency of the statistical audit.
Cash flow audits ensure that a business clearly and appropriately documents cash when drawing up financial statements. Operating cash flow (OCF), a measure of the amount of cash generated by a company's normal business operations is of paramount importance for all businesses. The traditional use of the cashflow audit is for verification of business documentation and a measurement of overall economic health. With the use of statistical analytics, cash flow can also be used as a powerful tool to shape future operations.
The trend of employing statistical analytics in making business decisions was given impetus when many state revenue departments began to implement Computer Assisted Audit Techniques (CAATs) in conducting sales and use tax audits. This technique quickly expedites audits to save time and resources. CAATs efficiency is only possible with the use of statistical analytics. This book uses as a guide the statistical audit guidelines as promulgated by the American Institute of Certified Public Accountants (AICPA) and the published directives of the U. S. Internal Revenue Service.
Statistical analytics can involve complex procedures. Many business managers complain that building business analytics with any degree of accuracy can take a lot of time. Time that may be better spent selling rather than trying to master complex procedures. The AI assistance of Auditmetrics V6.2 was specifically designed to ease small business managers into the development of analytic capabilities. Knowledge imparted by this book is valuable in itself but it is Auditmetrics AI assistance that makes it practical to keep pace with the growing use of technology and analytics to increase business profitability.
However the statistical audit discussed in this book is not an end in itself. It complements the other two books in the series: "Forecasting Revenue and Expenses for Small Business" and "Market Research for Small Business". Each book outlines a practical way to use statistical analytics to solve administrative and marketing issues needed to survive in a competitive environment. There's an old axiom in science and business, "If you can measure it, you can control it". That is the foundation for this book and the books that follow.
This book and companion software is a workable solution to make it easy for small business managers to use statistical analytics. This in turn forms the basis of auditing accounts, detecting fraud , data mining and more importantly lead the way to conduct business forecasting and market research.
