Difference Between Statistics & Financial Accounting

The difference between statistics and financial accounting is in large part the difference between a general view and a particular one. Financial accounting is meant to discover the particular financial situation of either an individual or an organization. Statistics, on the other hand, are used to discover any number of facts about the world. Sometimes statistical facts will be used in financial accounting, but it's rare for an expert in one field to specialize in the other. A modern firm will usually find a place for both outlooks in the way it conducts its business.

The common thread linking both statistics and financial accounting is found in numerical data. This kind of data is information that can be quantified into precise numbers. Financial data is sometimes used by statisticians interested in the way that the economy works or how to improve some aspect of an organization's or individual's performance. This general information is then sometimes also used by financial accountants to better perform their job of keeping a budget and advising on financial planning.

Statisticians have gained a more prominent role in many businesses due to the increased amount of business data that's available thanks to computers and the internet. Many organizations have improved their performance by using such data results as web traffic hits and precise sales figures. As the economist Erik Brynjolfsson told the New York Times in 2009, "We’re rapidly entering a world where everything can be monitored and measured." The more factors of a business that can be put into precise data, the more areas statisticians should be able to apply their expertise.

Financial accountants are placed in a more restricted position by the many rules and regulations that exist for individuals and organizations for financial matters such as paying taxes and releasing a budget. In the United States, accountants are overseen by different agencies such as the Securities and Exchange Committee and the Financial Industry Regulatory Authority. The decisions that accountants make and the data that they use are more carefully scrutinized due to the larger impact that they can make in the average individual's or organization's life. Financial accounting is an everyday practical concern.

Both statisticians and financial accountants have discovered that newer computer technology has changed the way they do their work. Using computer programs specifically designed for the task, statisticians are now able to uncover patterns that had remained indiscernible in data before. Financial accounting software has likewise made it possible for accountants to develop a more sophisticated understanding of their client's affairs and to more quickly make sense of numerous forms of financial data. The simple ability of computers to crunch numbers and perform basic mathematical tasks has greatly improved the abilities of many statisticians and financial accountants.