Advancement of Technology in Accounting - Research Paper Example

“Technology in Accounting” Introduction: The world is moving too fast and so is the pace of development in different fields. The use technology has incorporated almost every field of life. Nowadays, people enjoy and make the most of modern technologies at work, home, educational institutes, and service industries and so on. The uses and advancements of modern technologies are not limited to some particular area of any organization for instance computers are not only used in schools, colleges and universities for educational purposes but they are also commonly used in the administration departments. Similarly, if we talk about modern business environment, we cannot ignore the use of soft-wares which help storing and managing vast amounts of data. Modern technologies and increasing awareness of its benefits are making the tasks of the accountants and auditors easier. By using the specially designed software packages, it has become easier and more efficient to record the transactions, manage them, execute the related operations and at last check the reliability of the entered data. Advantages of Technology in Accounting: Accountants and auditors require dealing with relatively larger amounts of data. Their career is dependent on the efficiency and accuracy of their work. Modern software and programs have helped a lot in making their work easier and less troublesome. The specially designed software helps them in organizing data and transactions in standard formats. These special formats are then used to create financial reports of the organization. The introduction of technology in the field of accounting has greatly influenced the work of accountants. The use of these technologies has helped a lot in reducing the tiresome process of manual recordkeeping (Rezaee & Reinstein, 1998). The most crucial advantage of using technological advancements in accounting is the speed and accuracy of work. Moreover, the use of modern technologies has put the accountants and auditors at ease. They are now able to manage large amounts of data accurately and update it easily by using the available options in the modern machines. The use of modern soft-wares have helped in minimizing the workload of the most tiring tasks like posting to ledger which can now be completed directly by making use of the specially designed software like accounts payable or receivable modules. Moreover, modern technology has made it possible to obtain balance sheets, income statements and other important accounting records to be transferred easily and within a matter of seconds. It is also now possible to handover some nontechnical works (like data entry) to unskilled labor. It was not possible in the era before the introduction of technology in the accounting as it was a difficult task to manage the information within a proper format. It required skills, knowledge and perfection to maintain those important accounting records up to date. The advantage of computers being a cheap and less capacious source to save large amounts of data cannot be ignored. Disadvantages of using Technology in Accounting: It is, however, important to know the darker side of selecting computer and accounting software package to hold and manage the administration and accounting tasks of an organization. The organization’s requirements must be identified before choosing the type and category of computer and accounting software package. It is a common mistake made by managers to purchase a computer system and later on assimilate or change things to make it according to the organization’s needs. It is important to evaluate the nature, requirements and purposes of the organization before opting for any accessories to be used for business purposes (James & Harley, 1992). Since computers are now designed with the capability to perform all the accounting applications, it is important to keep an eye on the drawbacks of using this technology as an accounting instrument. One of the most apparent and commonly known uses of technology is the lesser amount of paper work and more dependence on computers’ RAM, ROM and external memories. Hence, one must keep in view that the data may be lost as a consequence of hardware and software damage. The use of technology can make the work less burdensome, but it may also expand the work if there is some mistake in data entry. Computers cannot identify logical mistakes like human beings do. Hence, in case of any error in data entry or any logical error, it becomes difficult to complete the task and balance the records (especially while making balance sheets). It becomes more difficult to protect against fraudulent activities. The failure to attain a perfect security check may end up in exposure of some secret and important information. It is somehow impossible to achieve 100% secured network within an organization. Wherever a computer is employed to hold an organization’s accounting books, it can be utilized as a way of misusing the finance it manages. For example, computers, when used for credit transfer operations, may be misused easily by creating false account names, by changing the costs or by changing the title of accounts somewhat. Technological Advancements: The concept of accounting is not new and hence the techniques to keep track of merchandise are not new as well. In the beginning, manual bookkeeping was the most frequent technique used by businesses to keep track of their business transactions. Organizations and businesses were required to hire a bookkeeper whose duty was to record, manage and track the day to day accounting entries. The bookkeeper had to change the records and pile up new transactions on regular basis. The use of calculators, pencils and other stationary in order to maintain a well structured financial record was hectic. The introduction of accounting software helped reducing the mistakes made by the bookkeepers. These soft-wares facilitated reducing the burden of work from them and helped them record and maintain the transactions in a relatively short time. The development of accounting software was gradual. In the starting, accounting machines were designed for the basic bookkeeping purposes. Basic arithmetic functions in vertical and horizontal columns were introduced in the beginning. Further development in this regard resulted in the making o the billing machine. It was designed to create the bills of customers with information about them. The bills created with these billing machines contained the customer’s names, addresses, discounts, total amounts and other necessary information. These machines, though marvelous achievements, were not considered as very effective and useful. However, they were one of the first steps to move towards a better technological environment for accounting. The accounting machines, in the beginning, consisted of various calculating devices and typewriters connected with each other to perform different tasks. The operating and mechanical complexity of these basic machines was reduced by further advancements and ended up in the attainment of highly flexible, speedy and capacious accounting machines. Nowadays, computers have replaced most of the accounting machines and are widely and most commonly used globally. Different soft-wares have been introduced and further improvements are being made to make accounting easier, faster, more flexible and proficient. Due to the continuous change in capital, it is important but difficult to maintain accurate records. The use of computers to produce payrolls, sales ledgers, purchasing ledgers, subsidiary ledgers and other accounting purposes have paved new ways to improve workplace efficiency. It has also speeded up the process of acquiring important accounting records like business’s balance sheet, income statement etc. within a couple of minutes. It has facilitated the process of transferring these important documents securely from one place to another using web, USBs, external memory units etc. Moreover, the use of computers to store this data has helped minimizing the risk of losing important information due to unidentifiable risk factors. However, risk can’t be considered as NIL due to threats like viruses, electricity breakdown, memory destruction etc (Lin, 2004). Technology in Accounting Education: Knowing the importance and usefulness of technology in all fields of life, it becomes crucial to include the use of technologies within the classrooms. The awareness and knowledge of powerful impact of technology, if developed during the educational period, helps students overcome the obstacles in handling these new and advanced technological innovations in their latter life. It is apparent from many studies that people (including, students, parents, teachers, employers etc.) accept and promote the use of technology within the schools. A survey indicates that around 90% parents believe that students must know the technique to handle computers before they are done with graduation from their high schools (Chmielewski, 1997). The view of teachers in this regard is even stronger. Another study reveals that teachers in Unites States consider the education of technology and computers as more important than other subjects (particularly, history, biology, American literature, chemistry & physics) and studying practical skills (Oppenheimer, 1997). This importance given to technology and computer education must have some great advantages. The world has changed a lot in the past few decades. It is not difficult to determine the reasons behind these enormous changes. Without any doubts, technology and modern advancements have changed and facilitated the modern world. The advantages of technology have grabbed the attention of educators and researchers towards making the use of technology in the education field. It is a fact that students make the future of the world and if they are not given proper knowledge and education about things, they will not be able to modify and improve the existing technological resources (Ahadiat, 2005). Today’s business is highly influenced by latest technology. Universities and colleges are trying to find easier and more effective ways to promote the education of technology in all fields. Students are provided with proper guidance and lessons to use, manage and handle modern technological machines and innovations. Businesses are now nearly controlled through modern resources like computers, latest machinery and modern techniques. Students, hence, require a complete knowledge about how technology is being used in their field and how its use can be improved to achieve a greater efficiency. Employers of today’s technological arena are looking for more and more educated staff with higher knowledge and skills to use technology. Businessmen are fully aware of the fact that proper use of technology not only reduces the cost but also save a lot of time and energy. These advantages of technology make a business more profitable creating a good reputation and status in the world business market. Accounts department is present in all organizations regardless of its size, nature and type. Hence, the use of information and technology in higher education institutes of accounting is continuing to expand. Especially, Association of Chartered Certified Accountants (ACCA) and other professional bodies are taking an important part in promoting the use of e-learning or web-based learning. However, a study suggests that the use of technology in the field of learning cannot be as fruitful as it is expected unless the learners, themselves, are interested in utilizing and knowing it. It also depends on the availability of technological resources required to build up an e-learning environment. Moreover, the success of such a technique also depends on the availability of internet self-efficacy and the prior experience of using such technologies (Pituch and Lee, 2006). Conclusion: In conclusion, it can be said that the use of technology has remarkably changed the lives of people. Information and technology is getting more and more attention in schools, universities and colleges in order to prepare the youth for the upcoming challenges bring by the technological advancements. Technology has somehow become important for successful running of today’s businesses. Accounting being an important part of every big and small organization has also adopted the modern techniques of calculations and record keeping. Many soft-wares have been designed to facilitate the accountants and auditors. These soft-wares and accounting machines have helped them make more flexible and efficient records of the organizations. There are some disadvantages and threats of using new technologies as well. However, the advantages gained by the use of technologies are far more than the disadvantages. Hence, technology in the field of accounting has not only facilitated accountants but also made it easier for the stakeholders to get the necessary and relevant information about the organization in a matter of minutes. Bibliography: Pituch, K. A., & Lee, Y.-k. (2006). The influence of system characteristics on e-learning use. Computers & Education. 47 (2), 222. Ahadiat, N. (2005). Factors that may influence or hinder use of instructional technology among accounting faculty. Campus-Wide Information Systems. 22 (4), 210-232. Warren, Gorham & Lamont, inc. (1984). Computers in accounting. New York: Computers in Accounting. Chmielewski, D.C. (1997), Computers’ benefit in classroom questioned, The Orange County Register, November 10, pp. 1, 6. Oppenheimer, T. (1997). The Computer Delusion: Schools around the country are dropping traditional subjects to lavish scarce time and money on computers and computer education - with results that may be at best negligible and at worst harmful. ATLANTIC -BOSTON-. 280 (1), 45-65. James, E. H., & Harley M. C. (1992) How to Match Computers and Accounting Software. Journal of Accountancy. Vol. 173 Lin, P. P. (2004). Technology Software Web-based Accounting Systems. CPA JOURNAL. 74 (10), 68-70. Rezaee, Z., & Reinstein, A. (1998). The impact of emerging information technology on auditing. Managerial Auditing Journal. 13 (8/9), 465. Read More