“Provide Insight or Face Extinction,” by Noah P. Barsky and Anthony H. Catanach
has been on accumulating, processing and reporting the results of economic
activity for many types of organizations. Recently, due to increased competition
usefulness of this equation.
they need proficient information. Information however, can only be gathered by
assessing collected data, and adding personal insight, if it is to assist the
thinking leads us to a new equation, which is more suited to today’s competitive
Data + Insight = Information
that it is most effective when data processing technologies and creative
thinking are used together. This supports the reasoning behind firms beginning
added insight to the data. Data that hasn’t been evaluated has much less value
to management because it can’t be utilized as effectively in decision making.
Computer software packages can now perform a broad range of traditional
accounting functions making it easier for businesses to generate financial
statements or leases using very little human involvement. Still, those programs
can only produce data and are not able to create information because they cannot
provide any insight. Insight requires value-adding human qualities to deliver
analysis and interpretation and can’t be found in any computer program.
If they don’t want to be made redundant by computers, accountants should realize
that they are no longer expected to just prepare financial statements that
simply comply with the minimum standards and requirements of the past. Companies
executives should therefore seek individuals who can provide them with
information, and not just routine data-creation.
Decision-making is perhaps the most important role of management, and without
useful information provided by accountants, it would be difficult to make a
choice among alternative business strategies. We have learnt that providing
information for decision making is the first objective of managerial accounting
formulate plans based on their data. As long as this is the case, the new
accounting equation is more suitable because it encourages employers to draw on