What is the relationship between accounting and statistics?

Statistics and accounting both focus on collecting, classifying, presenting, and summarizing quantitative data. Specific applications of statistics in accounting mainly focus on analytical and modeling techniques for drawing insights from financial data.

Do you need statistics for accounting?

While accounting careers involve statistics to varying degrees, a strong grasp of statistics fundamentals can be beneficial. Some accounting and accounting-related specializations, such as actuarial science and managerial accounting, strongly focus on statistical modeling and analytics.

What is the role of statistics in finance?

Statistical analysis can help finance professionals with data analysis, risk management, and investment-related buying and selling decisions. Statistics also help finance professionals predict and manage the uncertainties inherent in forecasting.

Statistics in Accounting | Accounting.com

Accountants use statistics by analyzing past financial performance and current trends to make future projections. These insights can help employers gain and maintain strategic advantages.

Accounting and business professionals may use specialized software to perform statistical analysis. Some platforms even integrate artificial intelligence to make analytics easier, faster, and more precise.

Statistics also play a major role in accounting-related fields, such as actuarial science and finance. Statistical knowledge may also be useful if you pursue a certified management accountant credential.

Explore the many uses of statistics in accounting and how statistics coursework or degrees can impact your career prospects.

Popular Online Accounting Bachelor's Programs

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Accounting Jobs That Require Using Statistics

Many accounting careers regularly use statistics concepts. However, some roles are more likely to involve statistics than others. The list introduces some accounting-related career paths that often involve statistical analysis.

Actuaries

Statistics is a key part of actuarial accounting or risk management. Actuaries are frequently required to determine the discount rate that reflects the risk, or range of error, with any given forecast. Accountants often use statistical principles, such as correlation and distribution, to anticipate this risk and account for it when setting a valuation. More recently, accountants are using more sophisticated statistical techniques, such as covariance and beta models, to limit valuation error.

Auditors

Accountants who perform audits can benefit from understanding and using statistical analysis. For example, when conducting a reliability assessment, one of the accountant's first tasks is to gather evidence. Auditors may do this by looking at a portion of the whole, rather than gathering every bit of data available. Reviewing statistically representative samples helps auditors work more efficiently and objectively.

Benefit Accountants

Accounting standards are front and center when determining retirement and other benefits. Accountants set premium adjustments to account for future risk and artificial fluctuations in short-term interest rates using statistical models and methods. For example, accountants and others with the American Benefits Council have used historical statistical data to develop policy recommendations to help control defined benefit plans and promote retirement security.

Controllers

Controllers typically oversee all of an organization's finances including cost analyses, budget reports, and forecasting. Controllers may also provide financial analysis and advice to the head of the organization. They have a thorough understanding of the statistical principles to create analyses and forecasts, ensuring that their organization operates profitably and efficiently.

Forecasters

Accountants use statistics to forecast consumption, earnings, cash flow, and book value. Forecasting involves an amount of guesswork about the future. Having a thorough understanding of the distribution and metrics for evaluating potential errors, accountants can more efficiently make predictions about the future.

Forensic Accountants

The detectives of the accounting world, forensic accountants use accounting and legal principles to detect financial fraud. With today's incredibly complicated financial instruments like credit default swaps and collateral debt obligations, forensic accountants need to understand statistical principles, such as Benford's Law, to detect fraud.

Mortgage Underwriters

Mortgage underwriters anticipate and predict the risks associated with any given loan. They need a thorough understanding of statistics in order to set a price that is reasonable for the borrower and profitable for the lender.

Popular Statistics Courses

Many accounting programs include core or elective statistics coursework. Explore some commonly offered statistics courses relevant to accounting and business fields:

Should You Get a Degree in Statistics or Accounting?

Whether you should get a degree in statistics or accounting depends on your interests and the types of careers you want to pursue after graduation.

While both fields involve organizing, curating, and analyzing quantitative data, statistics is more theoretical and based on mathematical theory. In contrast, accounting covers accounting concepts with financial applications.

Institutions usually offer statistics coursework through their mathematics, engineering, or computing colleges. Some even have dedicated statistics departments. In comparison, accounting is typically classified as a business discipline.

This table presents a high-level comparison of key points that differentiate statistics and accounting.

Comparing Degrees in Statistics and Accounting
Key Factor	Degree in Statistics	Degree in Accounting
Core Concepts	Descriptive, predictive, prescriptive, and regression analysis Statistical correlation Statistical modeling Probability	Accounting information systems Auditing Cost, financial, and managerial accounting Financial reporting Taxation
Specialization Areas	Applied statistics Data science Statistical analytics Mathematical statistics	Auditing Forensic accounting Financial accounting Managerial accounting Tax accounting
Career Paths	Actuary Data scientist Financial analyst Health scientist Statistician Systems analyst	Accountant Actuary Auditor Budget analyst Financial analyst Financial manager

As you compare statistics and accounting, know that the two disciplines are not mutually exclusive. In fact, they complement each other well. Pursuing an undergraduate degree in one subject and a graduate degree in the other can prepare you for an accounting, actuarial science, business, economics, or finance career.