The Economic Feasibility of Big Data Adoption: The Influence on Risk Reporting and Risk Management Quality

Risk reporting and risk management are critical issues in any business environment. Different stakeholders need high quality risk information about the business risks and managers need also effective mechanisms to assess, measure those risks before managing and disclosing them. Big Data has a potential to improve financial reporting, enhance transparency and the accounting information quality (Warren et al. 2015) and enrich the information content of financial reporting (Moffitt & Vasarhelyi, 2013). Financial reporting is the final product of financial accounting and a basic interest for management and stakeholders as well. The attention paid to risk reporting and management is increasing day after day. Recently, Basel Committee asked banks to publish a standalone report devoted to disclosing information about the different risks that face banks and how they manage them. Many banks have already published this report in addition to the annual reports starting from 2016. Moreover, Avantage Reply (2014) argues that Big Data has the potential to enhance monitoring of risk, risk coverage, and the development of advanced risk-assessment models.

How the new technology of Big Data and analytics can help in improving the quality of risk reporting and risk management is a major research question. The literature on this relation is very rare. After an intensive research, we found no study that examines how Big Data could improve the quality of risk reporting. However, there are some studies that discuss how Big Data could improve risk management such as ICAEW (2014) and Chen et al. (2015). Chen et al. (2015) conduct a case study on how Alibaba Group uses Big Data in fraud risk management, they state that Alibaba Group has a fraud risk management system based on real-time Big Data processing and intelligent risk models. Moreover, Al-Htayb & Alberti-Alhtaybat (2017) examine the relation between Big Data and corporate reporting in general but not risk reporting.

Finally, the solutions of Big Data are presented by technology companies such as IBM and Microsoft, but managers need empirical evidence on the economic feasibility of adopting such solutions for their businesses.

Accordingly, many research questions in this regard that need answers include:

1.What is the economic feasibility of investing in Big Data technology?
2.Will Big Data adopters provide a higher quality risk information and manage risks more efficiently than non-adopters?
3.What are the most suitable Big Data solutions to be employed to improve risk reporting and management quality?

How to apply:
We welcome applications from highly motivated prospective students who are committed to develop outstanding research outcomes. You can apply online at www.port.ac.uk/applyonline. Please quote project code ACEF3920218 in your application form.

Applications should include:
-a full CV including personal details, qualifications, educational history and, where applicable, any employment or other experience relevant to the application
-contact details for two referees able to comment on your academic performance
-a research proposal of 1,000 words outlining the main features of a research design you would propose to meet the stated objectives, identifying the challenges this project might present and discussing how the work will build on or challenge existing research in the above field.
-proof of English language proficiency (for EU and international students)

All the above must be submitted by the 11th of February 2018.