The Effects of Technology on the Accounting Profession Cace

Abstract

Technology related to the accounting profession has dramatically evolved since the times of simply bringing a box of receipts to an accountant to balance a company’s books or manually making journal entries into an organization’s general ledger.  The accounting profession now utilizes sophisticated software such as QuickBooks, Peachtree, and Xero just to name a few.  This paper will explore the advantages and disadvantages of how current technology has affected accounting processes.  Such advantages would include the ability to generate and share financial reports within minutes and such disadvantages as the infinite security threats to accounting information systems.  In addition, this paper will discuss how technology has affected accounting processes within public sector organizations (government and non-profit).

The Effects of Technology on the Accounting Profession

        Changes in technology have had a profound impact on the way businesses and public sector organizations operate. Technology upgrades have made a significant impact on accounting processes.  Prior to advancements in technology, most accounting was performed manually which involved a great deal of paperwork.  Reliance on manual ledger inputs with a pencil has been all but eliminated with the introduction of Microsoft Excel and the electronic spreadsheet for the microcomputer.   Accounting professionals have all but eliminated the need to work long and tedious hours on accounting tasks with the integration of accounting and information technology.  Accounting information systems now have a variety of capabilities dedicated to accounting data processing and storage.  In today’s public and private sector organizations, accounting professionals are utilizing the internet, local area networks (LANs), peer-to-peer file sharing (P2P), as well as the implementation and operation of complex, integrated enterprise resource planning systems (ERPs) (Garcia-Manrique, 2005).

        Over the years, the accounting profession has experienced a change in technology and it has brought with it many advantages and disadvantages on accounting.  On the pros side, there is real-time reporting which ensures accuracy and timeliness of how information is provided has greatly improved organizations’ efficiency.  Also interactive data allows information to be transferred effortlessly and used in number of different ways between different computer applications (Bagranoff, Simkin, & Norman, p. 15, 2007).  This helps accounting professionals provide the most up-to-date and relevant information.  

Also according to Bagranoff, Simkin, and Norman (2007), the accessibility of accounting information systems over the internet is a strong advantage, however its greatness weakness is the vulnerability this new technology presents.  A threat to the privacy and security of confidential organization information is a top concern (p. 387).  It is important for companies and organizations to safeguard its employees’ personal information, company financial information, and proprietary data related to the organization.  It is important to have internal controls set in place to monitor and intercept any compromises to a company’s accounting information system.  This is an important step in safeguarding an organization’s electronic resources.