ACCA Performance Management (F5) Certification Practice Exam

What is a significant risk associated with using Big Data?

1. Inaccuracy of data

2. Cost-effectiveness

3. Increased data privacy

4. Enhanced data reliability

The correct answer is: Inaccuracy of data

A significant risk associated with using Big Data is the inaccuracy of data. In the vast realm of Big Data, the sheer volume and variety of information collected from numerous sources present challenges in maintaining the quality and reliability of the data. Data can become inaccurate due to various factors, such as data entry errors, outdated information, inconsistencies across different datasets, and biases within the data collection process. Since decisions are often based on data analysis, any inaccuracies can lead to misguided insights and poor decision-making, potentially affecting the overall performance of an organization. In contrast, the other choices do not represent significant risks associated with Big Data. Cost-effectiveness generally refers to the potential for Big Data solutions to optimize expenses through better insights and efficiencies, while increased data privacy and enhanced data reliability suggest positive outcomes rather than risks. Therefore, it is crucial to focus on ensuring the accuracy of data in Big Data applications to mitigate this inherent risk.