Wednesday, April 4, 2012

Accounting Information Systems and Their Effects on the Accounting Profession

After accepting a position as a bookkeeper for a small, private surveying company in 1992, I was led to a room full of shoe boxes that was full of receipts and napkins with notes written on them. Under all of the paperwork were a couple of binders that were the make-shift ledgers that kept track of the credits and debits to each account. Since then, businesses have moved from shoe boxes to computer networks and advancements in information technology have streamlined how businesses collect, process and transform raw data into useful information. Accounting information systems (AIS) is the procedures used by organizations to create needed information for its users from raw data (Bagranoff, Simkin, & Norman, 2008). Beyond just accounting, AISs generate useful information for all aspects of business including finance, marketing, human resources and production (Bagranoff, Simkin, & Norman, 2008). This report will describe just how information systems have changed the accounting profession, how new technologies have effected accounting processes and how the private surveying company since 1992 has adapted to new technologies. 

Information Systems Have Changed the Accounting Profession

Technology over the last few decades has drastically changed the face of the accounting profession. For accountants, new technology is always trying to figure a more efficient way to do the same simple process of input, process and output (Bagranoff, Simkin, & Norman, 2008). The greatest step forward in processing systems data was the computer. Information technology (IT) created programs that crafted reports and produced information far quicker than by hand.

Originally AISs were only concerned with accounting data and were created to process accounting data. Today, however, AISs are an enterprise-wide information system that focuses on the business process of the organization as a whole (Bagranoff, Simkin, & Norman, 2008).  Accountants today, with the use of AISs, are able to process far more information and create reports for all areas of the organization. And with the new AISs comes new responsibilities. As a result of the corporate scandals of the early 2000’s, the Sarbanes-Oxley Act of  2002 required corporations to undergo much stricter audits and set new enhanced standards for financial statements  (Bumiller, 2002). 

The accounting profession has also significantly changed due to the fact that the new problems have risen out of advances in AISs. Problems such as information overload, input errors and insufficient audit trails have created a greater need for accountants to be trained and knowledgeable in information systems and IT (Bagranoff, Simkin, & Norman, 2008).

New Technologies and Their Effect on Accounting Processes

Computer systems and Information technology (IT) has played the largest part in creating greater efficiency and effectiveness in the accounting process. In this information age, fewer workers are producing goods while more employees are paid to analyze and manipulate information about the goods produced (Bagranoff, Simkin, & Norman, 2008). More attention in technology is being paid to information systems that help to streamline the accounting process and communicate the information being produced. This technology is helping AISs to capture more than just financial transactions, non-financial transactions as well (Bagranoff, Simkin, & Norman, 2008).

Another technology that is having a great effect on the accounting process is Wi-Fi technology.  Now accountants can be on the opposite sides of the country and work on the same problems without either being on site because of the advances of Wi-Fi technology (Scott, 2007). Accountants no longer have to be onsite to look at data but can upload information and reports from anywhere in the nation as long as he can connect to a Wi-Fi network. This does, however, create problems with security and safety of information from theft (Scott, 2007). So further technology is being created to protect from identity theft online so that greater access to information is available to anyone at anytime who has access (Scott, 2007).

Changes in Accounting Procedures at Samuel David Surveying Services

Samuel David Surveying Services was a private company that kept receipts in a shoe box when I began working with them in 1992. By 2006, the company had grown into a mid-size company with many more accounts receivable and accounts payable to attend to. The company was not a publicly traded corporation so the need for SEC approved financial statements was not needed but it did need to upgrade its AIS to keep pace with the new revenues and expenses that a growing business encounters.

The toughest upgrade the company made was from a written accounting system to a computer and IT based program. It took two weeks of inputting transactions and account information but after it was all in and the bank accounts were reconciled, it made keeping track of the financial status of the company much easier to handle for the owner, the bookkeeper and the CPA.

The surveying company was not a large company that had hundreds of accounts to keep account of, but it was just as important for them to upgrade with the newest technology to keep the company running efficient and cost-effective. The time the company saved with record keeping and maintaining accounts receivable helped the company to stay competitive in the local economy.

Conclusion

Changes in information systems and technology have greatly impacted the accounting profession in both large and small organizations. The invention of computers and IT has helped to create AISs that process information for the entire business of organizations. These enhancements have helped companies to have greater control of finances as well as making informed decisions to react to financial activities. And with Wi-Fi technology erasing boundaries between where work is and where work is done, the accounting profession can stay connected to clients more easily and with greater impact. And with further advances in technology, the survey company might be able to throw those shoe boxes away for good.











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