Impacts of the Information Age on Accounting

1. Introduction

Over the years, diverse information technology (IT) applications have markedly reduced the amount of paperwork associated with financial accounting (United States, 1988). Presently, most of the information related to the accounting is documented, or recorded, through WANs (Wide Area Networks) and computers. The information age, which is defined by the usage of contemporary IT applications, has considerably transformed the accounting and the related professions both adversely and positively.

2. Positive Impacts of the Information Age on Accounting

   • Computer-Integrated Manufacturing (CIM)

CIM has markedly transformed cost accounting over the years. Organizations having CIM IT tools like computers gather and report accounting information concurrently, improving the speed with which the information is processed. The concurrent gathering and reporting of the information give rise to operational information systems integrating accounting information and marketing data with manufacturing data (Gelinas & Dull, 2010). That increases the information’s timeliness and quantity, assisting cost accountants put together costing systems that are based on particular activities.

• Accounting Data Transfer

IT tools are used in promoting efficacy in how accounting data is transferred between organizations or departments. Such tools are of marked significance in large firms dealing with accounting. The firms enjoy increased communication abilities, which help them to expand into new markets and enhance their global competitiveness. One of the tools is the internet. Internet-based accounting computations are timelier and more accurate than paper-based accounting computations.

• Image Processing

Image processing, a recent IT creation, helps accounting firms eliminate as much paperwork as is practical. That helps the firms hasten transaction time as well as reduce own maintenance requirements. The accounting documents resulting from image processing procedures are easily transferable, externally as well as internally (Gelinas & Dull, 2010). Their increased transferability gives rise to timelier and more efficient accounting information.

• Accounting Software and Expert Systems

Various accounting software, which include the Intuit’s Quicken 4, help accountants get help with multimedia tutorials, internet-based documentation, and expert advice in real time. The Manufactures’ Inventory software registers transactions in suitable accounts when particular inventories are moving through given manufacturing processes. Some software helps in the development of financial statements via the presentation of series of particular questions. Expert systems, which are essentially intelligence IT tools, help accountants in the formulation of decisions, especially those relating to taxes and auditing.

• Relationship Accounting Systems Based On Data

Over time, IT has given rise to tools that allow accountants operate effectively outside the accounting systems deemed traditional to the emerging ones that are more collaborative. The traditional ones come off as funnels with transaction moving through them and losing considerable, assistive information (United States, 1988). In the relationship accounting systems hinged on data such as CIBE (Completely-Integrated Business Environment) all foundational transaction data sets are retained within databases accessible by accountants from diverse sites concurrently.

3. Diminished Accountability Plus Confidentiality

IT presents accountants and the systems they use with heightened risks of losing own accountability plus confidentiality. The reduction of paperwork and paper-trail by diverse IT tools may allow for increased fraudulent accounting activities. Notably, electronic auditing trails are rather intricate to tag on especially with the utilization of collaborative computing and networking. Various technologies add to the heightened risk of losing accounting-related confidentiality. They include group work software and the internet (United States, 1988).

4. Conclusion

The information age has significantly transformed accounting and the connected professions both adversely and positively. It has improved the speed with which accounting information is processed. It has increased the information’s timeliness, efficacy, and quantity. Even then, the age presents accountants and the systems they use with increased risks of losing own accountability in addition to confidentiality.

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