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The Effects of Technology on the Accounting Profession

By drkiata Feb 19, 2006 504 Words
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 RFID initiative continues, it will be able to "[…] eliminate questions about the accuracy of shipments between distribution centers and stores" and "[…] inform stores about merchandise in their back rooms that needs to be moved to the retail floor" (Sliwa 45). With this new technology approaching, managerial reports will become even more efficient, as it is expected to greatly reduce the error rate. Electronic invoicing, electronic pay inquiries, and web based banking are also new technologies that this author encounters daily at the workplace. Invoices for major companies are submitted through a specially designed websites for instant receiving by the customer and payments are made directly to the bank via wire transfers, thereby eliminating handling time and reducing the average collection period. Although some new technologies are replacing areas that have traditionally been that of an accountant, it has opened doors to other opportunities, such as information system design, development, and management. Today's accountants must challenge themselves beyond the traditional accounting information system and not be afraid to become educated in the modern technological world.

Works Cited
Sliwa, C. (2005). Retailers Drag Feet on RFID Initiatives. Computerworld 39(4) 1+

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