The effects of technology on the accounting profession

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The effects of technology on the accounting profession

By | Feb. 2006
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Accounting is the way we identify, record and communicate financial transactions in an organization, and how that financial information is processed has essentially remained the same for hundreds of years. However, with the arrival of the computer, we have seen the structures and operations of many companies, and even entire industries, become transformed by new technologies with the modern information technology system. Information Technology and mercantilism have literally become entwined, and to stay competitive in today's market, it would be nearly impossible to have one without the other. With all the promise that information technologies have given us, the accounting profession must embrace the changes that come along with new technology and learn to use it to our advantage, or risk being replaced by nonprofessionals. A case in point would be the inexpensive software packages such as QuickBooks, Peachtree, and MYOB. Because these programs are designed for easy use, they are often set up and maintained by non-accountants who are not normally trained or knowledgeable in accounting concepts. Another type of software design is the tax return preparation software such as TurboTax. No longer does an individual have to take a box of receipts to the CPA's office and wait days or weeks to have their return processed when they can do it themselves in a matter of hours. Another new technology is that of the barcoding system. While barcodes are not a brand new technology, it has increasingly been used in industry, and is currently evolving into the RFID, or radio frequency identification technology. Barcoding is used at this author's workplace to automate payroll, inventory, receiving, production, and shipping - all of which impact the accounting information system. Managerial accounting reports are streamlined and data is collected more efficiently and quicker than before because the data is no longer required to be manually entered into the system. As the...