Impact of Technology Development in Financial Reporting University - Literature review Example

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Williams, B. C., & Spaul, B. J. (1991). IT and accounting: The impact of information technology. London: Chapman & Hall.

The ICT has the capability of enhancing, coordinating and controlling various operation of the different organization. It also increases the use financial management. (Attom) Business, especially Small Medium Enterprise’s flourish well when their business process are recorded as well as reported appropriately. Usually, ICT is considered as one of the most consistent and reliable means of giving a stable platform for an efficient system of internal control over financial reporting. It is believed that ICT system delivers a sure as well as assurance medium of financial information provision that covers the complete accounting cycle of a particular firm. The ICT helps in creating a conducive atmosphere where intergration of all financial transaction is made possible that would have very problematic to prepare. They implied that accounting information system is the oldest as well as the most extensively and broadly used information system in a business setup. Accounting systems that are computer-based records as well as generate reports on cash flow within an organization on a historical basis and produce an imperative financial forecast of future situations. The ICT has, therefore, has helped a lot in eradicating the problem faced by Small Medium Enterprises in the generation of accurate and precise accounting information. Therefore, Small Medium Enterprises business and other operators with vital ICT absences are most likely to encounter problems such as misstated financial reporting. Utilization of ICT tools as well as their integration with customer relationship management applications are liable to bring numerous benefits such as enhanced product and service quality, improved convenience and customer service, customer satisfaction, enhanced financial performance, higher productivity through the advent of a new product as well as various delivery/service channels. The remote viewing, as well as printing of and other financial documents, loan applications, balance checking, effecting transfers among others, are part of the valuable benefits braced by the new Information and communication technology. The ICTs are employed impressively to provide the internet broadcasting of banking service.

Saudagaran, S. M. (2009). International accounting: A user perspective. Chicago, IL: CCH

ICT helps in creating enabling that integrates all financial transactions using various accounting software in the generation of financial reports needed to have an impact on the decision of potential as well as existing investors. Well-timed and precise accounting information is invaluable to stakeholders of diverse interest. They found that 70% of SMEs often use or employ the use of ICT in their financial and accounting reporting. Various technologies are available for financial reporting. Among them which is most common is the World Wide Web. Other technologies for instance direct access to computer center of various firms are also available. Given the effect of technology on rules of organizations, accounting texts, content plus financial reporting structure and professional organizations have come up with the various ways of applying the technology. Systems premeditated by authorities. Financial reporting using World Wide Web. Various technologies affect the reporting and moving it towards electronic reporting. An example of the technologies includes electronic paper and HTLM, Fixed display of data like CD. PLUG-INS, multimedia, for instance, Microsoft Media player, 3D picture VRML, Real Player and Apple’s QuickTime. The influence of users besides scientific managers like database searching instruments, JAVA and ACTIVE/X, intelligent software, XML as well as the language of financial reporting XBRL. Information technology enables finance to work globally in financial eporting. Financial markets can be viewed as the principal arrangement, global information markets operating through organized computers. Without information technology, financial markets couldn't respond to global advancements and finance organizations couldn't reliably procure information in the meantime as their rivals. For instance, the Internet enables continuous access to credit scores and credit ratings to all loan specialists, insurance organizations and businesses that need financially dependable clients. Saudagaran, S. M. (2009), suggests that the information technology that runs social media on the Internet gives financial institutions significant information on their customers. By encouraging online groups related to their items, finance organizations obtain information as well as empower mark steadfastness

Sahehi, M.,& Torabi, E. (2012). The role of IT in Financial Reporting Quality: Iranian Scenario.6(1), 127-127

The impact that technology has successfully made in financial reporting is the ability of various firms and companies to use the computerized system in tracking as well as recording a financial transaction. Information technology (IT) has drastically reduced or shortened the time spent by several accountants to prepare as well as presenting financial information to management. The system has allowed quick creation of individual reports for different companies. This is very vital since it has eased the management process through decision making. Other capabilities include; good external reporting, increased functionality, better accuracy and faster processing. The field of information technology is widely growing with various accounting software finding their way into the market. The new software helps in improving business’ accounting processes, creating user friendly, the creation of interactive reports consisting simple reports such as profit and loss statements to complex ones for instance complicated budgets, forecasts as well as “what if” analysis. The automation of accounting and financial reporting makes the programs easy to use across the world. However, heavy reliance on automation often increases the importance data control which in many cases might sabotage data integrity with the organization.

Ramin, K. P., & Reiman, C. A. (2013). IFRS and XBRL: How to improve Business Reporting through Technology and Object Tracking. Chichester: John Wiley & Son

According Ramin, K. P., & Reiman, C. A. (2013). He views the phenomenal upsurge growth in the internet, telecommunication technology as well as the software as a great and having vital impact on the financial reporting practiced globally. He says that technology has eased the preparation of financial statements. This has provided information promptly especially when investors need them. This is compared to the traditional mode and frequency of reporting financial matters which is viewed as slow and lack relevance. According to Ramin, K. P., & Reiman, C. A. (2013) technology has the impact on minimizing the geographical distance, and therefore investors will be able to receive timely financial reports regardless of the nationality as well as the geographic distance of the entities where they have invested. They suggest that the traditional hard copy yearly reports might soon be wiped away and become obsolete. It will be interesting and fascinating how the arising development will affect various constituents of international financial reporting in the near future.

Yang, David C, Guan, Liming (2004). The advancement of Information Technology Auditing and internal control standards in financial reporting audit: The case of the United States.

Computers and networks give the majority of the data required for auditing. To be compelling, auditors must utilize the computer as an auditing tool, audit mechanized systems, and information, comprehend the business purposes for the systems, and comprehend nature in which the systems work. The other critical uses for computers and systems by auditors are in audit organization. By looking for new uses for computers and correspondences, auditors enhance their capacity to survey systems and data and deal with their exercises all the more viably. Mechanized devices enable auditors to expand profitability and that of the audit work. By perceiving the significance of rising condition and prerequisite to performing audit undertaking adequately, auditors must understand the key motivations to utilize audit instruments and programming. David Yang and Liming Guan (2004) examined the advancement of auditing in the fast heightening of innovation, which transparently adds to information technology (IT) auditing and inward control principles and rules. Innovation, information system, and electronic information processing have changed the way associations carry out their business, advancing operational effectiveness and help basic leadership. In this pith, and on account of United States (US) as being explored by the authors, different definitive bodies, for example, the American Institute of Certified Public Accountants and the Information Systems Audit and Control Association (ISACA), have issued norms to encourage and give adequate direction to auditors.

Parker, X. L., & Graham, L. (2008). Information technology audits. Chicago, IL: CCH.

The outcome of this research work demonstrates that the utilization of IT has impressively changed financial reporting, particularly to the accounting data. The use of IT especially the Internet, its instruments, and conventions have brought about online financial reporting in which IT enables clients to settle on better financial and administrative decisions. By expanding the importance of information, some of these advancements and the way that they affect decision making. For instance the databases for information analysis, proficient systems helping in breaking down deviations, obligation and hazard examination), neuron systems (as prediction tools), XBRL (making access to information less demanding for investors and investigators, an effective instrument for amend misuse and appraisal of information by clients. Utilizing IT, financial reporting of firms will move towards online financial reporting, in which firms utilize a specific design and define suitable reporting techniques, upgrading the steadiness of this procedure in those firms.

Bergeron, B. P. (2003). Essentials of XBRL: Financial reporting in the 21st century. Hoboken, N.J: Wiley.

This study demonstrates that using IT results in expelling negative effects and reducing prevailing impediments on the nature of financial reporting is for the most part because of the season of data. IT utilization will prompt online financial reporting that make the data constantly accessible on the Internet. Decision-makers would thus be able to utilize time and different data for making decisions and they can find specific data that they requirement for a specific objective. In this manner, by methods for on line financial reporting, financial data will dependably be given on time. Results of this research demonstrate that IT affects the nature of financial reporting and this effect is made through reporting. IT moves reporting towards online reporting, and this sort of reporting produces data using specific qualities. Considering the continually expanding advances of IT. It is normal that the effect on reporting and like this on subjective attributes of accounting data will progressively enhance because by utilizing more propelled advances will the data be more applicable as well as the consistent quality and likeness of data will be hoisted, and constraints will be lessened. Then again, considering the educational prerequisites of clients and the deficiencies of the present reporting model (conventional), it winds up plainly clear that the financial reporting model ought to finally push toward online financial reporting. Along these lines, it can be normal that the accounting arrangement of the nation will change the accounting calling at the same time with changes in IT, keeping in mind the end goal to adjust financial and accounting data to the fast changes of the present business world. If this was not really, the status of the accounting calling and the bookkeepers' status would experience an emergency in this general present day congruity.

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An example of the technologies includes electronic paper and HTLM, Fixed display of data like CD. PLUG-INS, multimedia, for instance, Microsoft Media player, 3D picture VRML, Real Player and Apple’s QuickTime. The influence of users besides scientific managers like database searching instruments, JAVA and ACTIVE/X, intelligent software, XML as well as the language of financial reporting XBRL. Information technology enables finance to work globally in financial eporting. Financial markets can be viewed as the principal arrangement, global information markets operating through organized computers. Without information technology, financial markets couldn't respond to global advancements and finance organizations couldn't reliably procure information in the meantime as their rivals. For instance, the Internet enables continuous access to credit scores and credit ratings to all loan specialists, insurance organizations and businesses that need financially dependable clients. Saudagaran, S. M. (2009), suggests that the information technology that runs social media on the Internet gives financial institutions significant information on their customers. By encouraging online groups related to their items, finance organizations obtain information as well as empower mark steadfastness

Sahehi, M.,& Torabi, E. (2012). The role of IT in Financial Reporting Quality: Iranian Scenario.6(1), 127-127

The impact that technology has successfully made in financial reporting is the ability of various firms and companies to use the computerized system in tracking as well as recording a financial transaction. Information technology (IT) has drastically reduced or shortened the time spent by several accountants to prepare as well as presenting financial information to management. The system has allowed quick creation of individual reports for different companies. This is very vital since it has eased the management process through decision making. Other capabilities include; good external reporting, increased functionality, better accuracy and faster processing. The field of information technology is widely growing with various accounting software finding their way into the market. The new software helps in improving business’ accounting processes, creating user friendly, the creation of interactive reports consisting simple reports such as profit and loss statements to complex ones for instance complicated budgets, forecasts as well as “what if” analysis. The automation of accounting and financial reporting makes the programs easy to use across the world. However, heavy reliance on automation often increases the importance data control which in many cases might sabotage data integrity with the organization.

Ramin, K. P., & Reiman, C. A. (2013). IFRS and XBRL: How to improve Business Reporting through Technology and Object Tracking. Chichester: John Wiley & Son

According Ramin, K. P., & Reiman, C. A. (2013). He views the phenomenal upsurge growth in the internet, telecommunication technology as well as the software as a great and having vital impact on the financial reporting practiced globally. He says that technology has eased the preparation of financial statements. This has provided information promptly especially when investors need them. This is compared to the traditional mode and frequency of reporting financial matters which is viewed as slow and lack relevance. According to Ramin, K. P., & Reiman, C. A. (2013) technology has the impact on minimizing the geographical distance, and therefore investors will be able to receive timely financial reports regardless of the nationality as well as the geographic distance of the entities where they have invested. They suggest that the traditional hard copy yearly reports might soon be wiped away and become obsolete. It will be interesting and fascinating how the arising development will affect various constituents of international financial reporting in the near future. Read More