Fig. 1.5.1 Examining the details.As is the case with all data analysis, the first consideration of analysis is whether the
analysis will be a formal analysis or an informal analysis. A formal analysis is one with
corporate or even legal consequences. Occasionally, an organization has to do an analysis
that is governed under rules of compliance. Typical governing bodies are Sarbanes-Oxley
or HIPAA. And there are plenty other types of compliance, such as audit compliance.
When a formal analysis is occurring, the analyst has to concern himself/herself with the
validity and the lineage of the data. If incorrect data are used for a formal analysis, the
consequences can be dire. Therefore, if a formal analysis is to occur, then veracity and
the lineage of the data are very important. In the case of public corporations, an external
public accounting firm must sign off on the quality and accuracy of the data.
The other type of analysis to be done is an informal analysis. An informal analysis is done
really quickly and can use any available numbers. While it is nice if the data used for an
informal analysis is accurate, the consequences of using less than accurate information
for an informal analysis are not severe.
When doing data analysis, constant awareness must be made as to whether the analysis is
formal or informal.
The first step in doing corporate data analysis is physically gathering the data to be
analyzed. Fig. 1.5.2 shows there are usually many diverse sources of corporate data.
Chapter 1.5: Corporate Data Analysis