How IS Has Affected the Accounting Profession
Sarah Ralston Empire State College
This Paper was prepared for Management Information Systems SMT 273754 taught by Professor Catherine White. Abstract
This research paper will show the impact of information technology and information systems on the accounting profession. It will focus on internal and external auditing practices as well as the expansion of career opportunities in the accounting field. The information provided will be useful to decision makers of organizations in understanding the auditing process and to those looking to pursue a career in accounting. Keywords: information technology, information systems, accounting, finance, business processes, organizations, auditing, careers, decision making
How IS Has Affected the Accounting Profession
Developing and ever changing information technology and systems have greatly affected the accounting profession, especially in the finance practices of business. The business processes of organizations have not only become automated for productivity that is more efficient, but has changed the way in which financial information is accessed and shared internally and externally (Laudon & Laudon, 2014). Increased use of information technology has also increased crimes such as financial statement fraud, embezzlement, and securities fraud, therefore affecting auditing processes. This cross functionality of accounting, auditing and technology expands the career opportunities within the accounting field (Pepe, 2011). Brief History
Although the accounting profession did not emerge until the mid-1800s, since “the early days of clay tokens to the invention of the abacus, accounting is as old as civilization”. The idea of cost accounting-“the discipline of estimating, tracking and controlling product and service costs”- originated in the late 1700s when a famous potter realized his clerks were stealing from him. Josiah Wedgewood began looking over his books, and upon noticing the clerks’ inaccurate record keeping, he realized just how important accurate accounting practices are to a business. As more businesses emerged, so did business regulations as well as increased taxes; it became obvious there was a demand for “professional number crunchers” and in London 1845, a group of clerks opened the first accounting firm (Anonymous, How Technology has Impacted Accounting, 2013).
Evolution of Technology
Since accountants were computing and recording financial information via paper entry, they needed to be “methodical, detail oriented” people. The invention of the adding machine, then later calculators and computers, helped to ensure accurate computing and bookkeeping that was more efficient. The creation of accounting software for computers completely changed the accounting profession. With the use of electronic spreadsheets, accountants no longer needed paper, pencil and calculators. Their jobs became less monotonous “with less margin for error”. The evolution of technology for accounting purposes has done more than make an accountant’s job process more efficient, it has given them the ability to interpret and analyze the financial information more effectively. By being able to comprehend this language of business, accountants have become one of an organization’s most trusted advisors (Pepe, 2011). Information Systems for Business Processes
There are different types of information systems that link the many business processes of an organization. Having access to these systems allows accountants insight and to accurately advise the decision makers of a business. Three main systems that are important to managing an organization’s information are Transaction Processing Systems (TPS), Enterprise Resources Planning Systems (ERPS), and Supply Chain Management Systems (SCMS)....
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