The Effects of Technology on the Accounting Profession Paper
New developments in information systems have bought significant changes in accounting profession, practices and processes.It has not only increased the efficiency and accuracy in accounting and has speed up the process for cumbersome and long accounting tasks, but also improved security of accounting data and increased transparency.
Large organizations and multinationals are making increasing use of new information systems and technologies to carry out their accounting tasks on global basis.These information systems has led to a great degree of standardization not only among the different divisions, locations and offices of a single organization, but also on a global basis.
New technoligies and systems from various vendors such as Microsoft, Oracle for accounting have greatly reduced the time taken to prepare the financial statements and benefitted auditors and accountants to complete and submit their statements in timely manner.
MIS reporting with respect to accounting has been made possible by Information systems only to take timely decisions.
New payroll management systems from companies like Paychex have greatly improved payroll accounting and is a boon for accountants handling large payrolls. Similarly, sharing tools allow accountants to collaborate and merge their work with accountants of the same company located at different location.
Development of new legislations such as Sarbanes Oxley Act has been the result of increased availability of quality information systems, without which, it is impossible for the companies to remain in compliance of these legislations.
One aspect of accounting that IT seems to have impacted is security. I know I have recently had credit cards canceled because a company’s database was compromised. Accountants now have to be experts in computer networking vulnerabilities as well as finance. It seems that this would force accountants to become more interdisciplinary. Certainly, they need a lot of computer skills beyond number crunching software.
At the same time, information technology is a great asset to accountants. By making information more easily accessible and shareable, these technologies enable accountants to provide higher-quality services to clients in the same amount of time – or even less – than they would have spent just a few years ago.
Financial documents that a client formerly had to assemble, print and send to the accountant by postal or courier service – which often had to be re-entered into the accounting firm’s IT system – can now be exchanged, analyzed and updated electronically.
Like any other business, accountants also benefit from such conveniences as Web meetings and the Internet.
Let us take the example of a multinational company like IBM, whose offices are located throughout the world and accounting is done at various locations, according to local laws, customs and currencies prevalant in the particular countries. But since IBM is a US based multinational and the final preparation of all these statements will be according to the GAAP principles and in US dollars, it is important for global companies like IBM to maintain similar accounting practices and standards everywhere.
Such large scale deployment of accounting policies and practices with global standards is impossible without the new information systems and technologies. With the use of these technologies, companies like IBM have no worries or fear in preparation of accounting statements, payroll related issues and management information systems(MIS) issues as the processes are standardized with the deployment of standard accounting and ERP packages such as Oracle.