- Internal Code :
- Subject Code : MA619
- University : Melbourne Institute of Technology
- Subject Name : Accounting and Finance
Accounting Research
Abstract on Modern Technology in Accounting
Accounting and modern technology are interrelated with each other. Today, modern technology is part of accounting. In this study, the relationship between accounting and modern technology was measured to illustrate the level of employee satisfaction in their own fields with the use of modern technology. This study aims to describe the effects of modern technology on the accounting systems. One of the major effects of IT on accounting is the capability of organization to use and develop computerized system to record and monitor the financial transaction. Moreover, computer system and IT network have minimized the time needed for accountants to make and provide financial information on behalf of management. Also, other competences of computerized accounting systems include faster processing, better accuracy, efficiency, and better external reporting.
Finally, this researcher addresses the benefits and drawbacks of using several modern technologies in accounting systems. Although we have benefited from the use of modern technology in accounting, there are various difficulties related to the use of technology in accounting, complexity, electrical connections and security. At end, modern technology reduces some of the drawbacks and then acts as a supplementary and complementary with each other. In this way, this research study is intended to provide a case study on the role of modern technology in adapting to the accounting system as well as the business environment. Also, the research design is dependent on the review of literature and case study. Using case study, this study presents a more efficient accounting system as well as predictive experience of continuous improvement for companies operating in different business environments. Along with that, this research study found that more efficient modern accounting systems, which can be make sure by recognizing the external environment of the company as well as its responses to the internal factor of the business environment.
Keywords: Modern technology, Accounting, and Satisfaction.
Table of Contents
Introduction.
Literature Review..
Research Gap.
Research Aims and objectives.
Research Question.
Methodology.
Data Analysis.
Conclusion.
References.
Introduction to Modern Technology in Accounting
An accounting system is a system that organization use to measure their financial performance by classifying and measuring every transaction in a way that agrees with certain value formats for example purchases, sales, liabilities, and assets. It helps in evaluating the previous performance, current status and future prospects of the organization. Besides, a more proper meaning of accounting is the way of classifying, recording, interpreting, and summarizing money, transactions and events in a significant way from financial recording and impact. The advancement of information technology (IT) has made several organizations within the professional services industry, however maybe none as much as such within the public accounting industry. After a slow and traditional industry, the public accounting changed dramatically before the millennium, its environment spread rapidly as it accelerated. Besides, knowledge sharing applications and audit software are two important tools of this change. In addition, automation of audit task as well as the utilization of specific audit software have changed the structure of the IT manpower and audit team. The use of sophisticated systems for sharing changed knowledge is equally important (Esmeray, 2016).
Modern technology and accounting are now interconnected, this relationship has been analyzed through this study. Today, many companies use accounting technology as a daily necessity. In some cases, they may encounter some problems while using the technology. The report presented here attempts to determine whether he is satisfied with the use of modern technology in his day-to-day accounting practice (Klovienė & Gimzauskiene, 2015). Accounting information systems are a framework within which companies provide financial information to useful users through all accounting activities such as recording, classification, validation, interpretation and information technology. Modern technologies that use regular accounting practices are many firmware, online helpdesk, hardware, and security systems, which are applied in day-to-day accounting process which are several accounting software, audit software, Tally software, ERP software, electronic data interchange (EDI) software, word processing software, and more.
Literature Review of Modern Technology in Accounting
Klovienė & Gimzauskiene (2015) illustrates that over the years there have been some changes in the application of IT in banking. Currently information technology has turned into an integral part of the banking industry. The application of modern technologies in the banking sectors have led to the development of various banking concepts, for example internet banking, online banking, e-banking, ATM, mobile banking, investment banking, and universal banking. This makes sure fast service to the customers at low transaction cost. Besides, the actual success of IT in the financial industry based on the customer satisfaction. Thus, banks need to conduct and organize the customer awareness program in its service. Also, security is a crucial issue in relation to e-banking. The growth of technology is essential for a successful business and for identifying customers through various means of communication to reduce banking fraud. In this research paper the authors only study topics related to their clients. This article does not introduce any research associated with bank stuffs and its issues in regards to bank computerization.
Santouridis (2015) discusses that the liberalization of Indian banking services took place almost 15 years after the liberalization of the banking sector in India. Every bank has adopted or shared “core banking system”. The results of a survey of 292 respondents about their perceptions on the electronic banking channel show that banking sectors have exceeded the prospects in technology-dependent services as well as its professed service level on the branch networks, which is under the expected level of the people. Due to the modern technology and the need for people to communicate with the client through the bank, this result is consistent with the responses of the respondents to the supposed “gap”. This is a challenge for the banking industry. Moreover, technology alone cannot provide the sustainable competitive edge for the banking sector. When each bank introduces IT, they will lose their place as a differentiator. At one stage, IT with “personal touch” will be required for the banking sectors to hold present customers and attract new consumer. The banks should include this in its operational strategy.
Taiwo (2016)) explained that the banking sector has entered a new world and the present development of the banking industry is altering the appearance of banking. Besides, modern technology has reformed the banking industry in a huge way as well as the banks across the world are investing heavily in technology. Besides, modern technologies have facilitated banks to increase its profitability and product delivery. When the bank relied upon the technology for their business on a daily basis, they need to be aware of their technical complexities and risks and create backup plans to ensure continued customer service. Additionally, the demand from customers will continue to increase due to technology dependent services are provided and as a result banks will face a technology war. To win this battle, the investment in modern technology is going to enhance and the proper use of this investment is required for banking sectors to make sure that the system installed are completely combined with its operations.
Cernusca & Balaciu (2015) argues that modern technology affects the profitability of commercial banks as well as argues that there is an important relationship between software (computer) and commercial bank profitability. The efficiency of the employees working in the information system affects the profit of the commercial bank. It has been found that there is a statistically significant relationship between the data and profits of commercial banks. The authors further explore how the Management Information System (MIS) affects the profitability of commercial banks. Along with, it recommended that the bank ought to continually retain its MIS polices to increase the extent of efficiency of information technologies which can generate profit.
Appelbaum, Kogan & Vasarhelyi (2017) analyzed the use of modern data technology of big data in the area of auditing. First, they define big data technologies as unstructured data and structure data, which are defined through the four V’s, including volume, veracity, velocity, and variety. Moreover, their research primarily concentrated on the four components of big data in finance and accounting, for example financial deception modeling, stock market forecast and numerical modeling, auditing, as well as financial suffering modeling. Along with that, the financial distress modeling has decided to use big data strategies like data mining technique, decision tree, regression tree methods to predict financial stress. Furthermore, it helps the auditor in identifying the financial capability of the organization in the future. In addition, the auditors can likewise detect financial scams and access the risk of scam by applying modern big data techniques and models. The auditors can predict financial markets by analyzing macroeconomic variables as well as financial ratios using a neutral network. Further, the method for numerical modeling include service design for managing capital market scheme, managing metadata in the business analytic software, categorizing positive initial public offers, and so on. Big data is also widely used in the auditing profession as it allows auditors to assess the procedures that make data, including complete population analysis that increase value to the accounting and auditing profession and to the consumers for whom they work.
As stated by Nurhidayati Sensuse & Noprisson (2017), modern information technology has an important impact on accounting. Besides, it has become possible for organizations to prepare and to implement computerized system to record and store financial transaction. With the advent of high technology and the high demands for accountant, accounting information technology has turned into a high marketplace. Accounting can be described as a way to evaluate and document money flow and substance outpouring. The accountant spends most of his time trying to push the financial information system towards a discrepancy. Knowing such information, many people do not have basic accounting. Data Innovation Accounting combines conventional accounting standards with programmatic and data-driven programs to create collectible fields for clearing up a financial information. Moreover, this digitization also provides an opportunity to investigate any such information, allowing one to revise and distinguish wasteful aspects and misconceptions of its accounting system.
As stated by Al-Shbiel & Al-Olimat (2016), the business environment turns into gradually more turbulent by more unexpected and rapid changes, increased complexity, intensified competitive pressure as well as the greater diversity. In the present times, companies are facing unprecedented fundamental changes that have never been able to survive and succeed before. In the face of growing challenges in a competitive situation, the successful companies must become accustomed to changing conditions on a regular basis. The reaction and adaptation process can be confirmed through quick decision-making process, suitable information and appropriate data flow. In this case, companies are trying to find new systems, methods, and alternatives to get more useful, original and accurate information in a changed environment. Moreover, the computerized accounting system allows auditors for processing large quantity of financial data as well as process by accounting systems. In other words, quicker processing time for different transactions has reduced the amount of time required to close out every financial year. In addition, month- or year-end closing period can be particularly taxes on the accounting department, ensuing in high labor costs and longer hour. The shortening of time helped organizations in cost control that increased the efficiency of the company as a whole.
As stated by Diatmika, Irianto & Baridwan (2016), the corporate scenario is rapidly approaching the no-coding period of accounting that mean there will be virtually zero data entry essential in the business. Furthermore, automated technology has constantly provided the double-edged weapon of expediency as well as the replacement of human with the modern technology. It noted that automated technology would make the lives of accountants more efficient, reduce the time spent on manual entries and minimizing human error. It is great news for the future, as the research predicts that general accounting tasks for example tax preparation, auditing and payroll will be completely automated by 2020. In other words, cloud-based accounting systems, like QuickBooks are determined as automated accounting programs. The automated accounting will enable professionals to use modern technology by highlighting patterns or anomalies without manual data entry.
According to Crookes & Conway (2018), the exchange of information and exclusive terms leads to the development of accounting method, application, and function. But the existing accounting system has been confronted by major environmental changes and the rapid development of information technology. However, it should be noted that the correct and reasonable use of accounting and information systems influences the selection of structural features and attributes relevant to the accounting system. In 2016, Optical Character Recognition (OCR) hit the field running in tax software, which makes it much easier for accountants. Along with that, OCR application scan handwritten and printed documents as well as convert them into machine readable text. The best part is that OCR allows accountants to work a few hours away from tasks such as receipt items, invoice management, expense tracking and paperwork removal. Having a good knowledge of OCR, among other trends, can be a very rewarding employee for the largest accounting firm. In fact, OCR automatically detects homes, cloud-based applications, such as Neat and Yooz. Individually, new technologies in accounting have changed the practice of accounting over the last few years.
Summary of Modern Technology in Accounting
From the above review of literature on modern technology in the field of accounting, it can be concluded that modern technology encompasses each aspect of modern activities extending from medium to large and from of small to medium sized operations and applications. Moreover, the trends in the human-centered system that were prevalent and popular since ancient times are now coming down from public and private corporations. The most versatile, popular, emerging, efficient technology behind the computer-based modus operandi approach is to protect from the initial steps of developing the need for end-to-end results in almost every modern industry genre. Information technology is the central system of this computer. Modern technology has added efficiency, reliability, efficiency, performance and other features to modern features. Modern technology has improved and refined the financial structure in terms of quality and quantity. Modern technology has revolutionized the way we manage transactions in the financial system with high efficiency and efficiency. Now is the time to think outside the screen and adopt the right technology and ensure the treatment of information technology.
Research Gap of Modern Technology in Accounting
The above literature review is an attempt to explore whether an identical academic work related to this study has been previously undertaken by way of research, books, papers, articles etc. A digital search has been made through World Wide Web and numerous journals investigated to get similar or related literature. It was found that immense theoretical as well as empirical research has been carried out in the field of accounting information system. Most of the above studies revealed that accounting information system have a significant positive impact in product pricing and cost measurement, accounting information quality, organizational effectiveness, managerial performance, ownership and timeliness, data quality, firm performance and profitability, corporate governance, and social responsibility. On the contrary, few studies critically examined accounting information system and revealed that it has no significant effect on financial reporting, management performance, organizational profitability. The review of literature has given an insight view in both positive and negative aspects of accounting information system.
Methodology of Modern Technology in Accounting
Introduction
The way researchers conduct research is known as the research method. This helps the researcher to construct their objectives and problems as well as to illustrate their results from the data collected throughout the study period. From now on, this chapter will discuss the research design, research philosophy, research methods as well as data collection methods for the current study (Leitch, Hill & Harrison 2010).
Research philosophy
Ethical Aspects
The ethical aspect was considered to be the most important part of the research work and while collecting data from several secondary sources, the ethical aspect was properly maintained by the researchers. Researchers use only original sources to gather potential secondary data (Mackey and Marsden, 2015).
Data Analysis of Modern Technology in Accounting
Taiwo, J. N. (2016). Effect of ICT on accounting information system and organisational performance: The application of Information and Communication Technology on Accounting Information System. European Journal of Business and Social Sciences, 5(2), 1-15.
Taiwo (2016) conducted a study on “Effect of ICT on accounting information system and organizational performance: The application of Information and Communication Technology on Accounting Information System” and stated that, ICT has become a key component of efficient accounting systems and also current excellent performance of an organization depends on this technology. In addition, in an attempt to upsurge the dependability of the performance of the organization as well as the accounting information ICT has been applied. Software and hardware bases which are used for accounting information are included in accounting systems. This study of the performance capabilities of an organization and the capability to achieve set objectives and activities requires the use of appropriate implementation and recruitment practices for maximizing the aids of information technology systems. Impact of ICT on the performance of the organization as well as on the accounting system is discussed in this study. Secondary method of data collection was used in this study and in order to use SPSS software Pearson correlation was established for analyzing the sample twenty employees in financial services at contract universities and other related accounting departments. It is showed by the outcome of the study that an important optimistic association is there among the accounting system and ICT system.
Lim, F. P. C. (2013). Impact of information technology on accounting systems. Asia-Pasific Jornal of Multimedia Services Convergent with Art, Humanities and Socialgy, 3(2), 93-106.
Lim (2013) conducted a study on “Impact of information technology on accounting systems” and sated that the rise of information technology in accounting is an innovative system. Currently, most business entities from large enterprises to micro enterprises have accounting information systems that help them conduct their business. This paper outlines the impact of information technology on accounting systems. This paper also describes the accounting process and its types. A key aspect of the accounting business is that IT touches increase the speed and accuracy of calculations and the flexibility of data exchange and security storage. Accounting systems in corporate sector has been mostly benefitted by the Advances in information technology. In addition, business efficiency appears to be developing by means of the computerized accounting information systems of these days.
Therefore, lots of transaction processes have been simplified to create efficient operations. Advances in information technology improve the efficient and efficient flow of information for systematic decision making and improve the efficiency of organizations in achieving their goals. As a result, the effectiveness of the organization increases. Information technology applied in accounting is not accurate. These systems connected to the corporate accounting information system are very effective in the accounting process but using accounting software can stop working on your system. Businesses prefer compatible systems and software for their functionality. In this advanced age of information technology computer has improved the accounting process, but cannot replace the role of humans in computer accounting systems.
Taipaleenmäki, J., & Ikäheimo, S. (2013). On the convergence of management accounting and financial accounting–the role of information technology in accounting change. International Journal of Accounting Information Systems, 14(4), 321-348.
Taipaleenmäki & Ikäheimo (2013) conducted a study on “On the convergence of management accounting and financial accounting–the role of information technology in accounting change”. This article provides theoretical and conceptual information on the recent changes in Management Accounting (MA) and Financial Accounting (FA) with the advancement of Information Technology (IT) and how these changes can and should be made. Explain not only in attendance but also at the behavioral and organizational level. How the connection is reflected.
The FA positive approach led to an analytical model drawn by Hummer and Labro (2006) in MA and this transformation creates a conceptual framework for analysis. According to this framework, Information Technology (IT) acts as a promoter, catalyst, catalyst and even competitor in MA and FA conversions. First, it incorporates technology methods and technology domains, including the deliberate integration of information systems and software into deliberate integration of methods and values, and then expands into behavioral and organizational domains with relevant (and) intentional integration with both activities and processes. This is illustrated by multiple examples of conceptual framing application.
Authors are interested in both technical and procedural (accounting standards, prudent reporting, performance measurement, transfer pricing, competitor, customer and contractor analysis, due diligence as M&D) and behavioral and organizational representation. Here. Based on observations of processes, actions, accounting roles, incentives, accounting and management of multinational corporations, business networks, boards and directors, directors and venture capitalists we associate FA material of front runners with MS associate it is decided that there are many cases. In contrast, this transition between technical and technological domains occurs before the transition to behavioral and organizational domains. In most of our observations, IT plays a key or even an important role in this transformation process. We pave the way for further research from the point of view of observing this change.
Christauskas, Č., & Misevičienė, R. (2012). Cloud-computing based accounting for small to medium sized business. Inžinerinė ekonomika, 14-21.
Christauskas & Misevičienė (2012) conducted a study on “Cloud-computing based accounting for small to medium sized business” and stated that SMEs are young and constantly change their areas of business in response to the fluctuations of the marketplace. Accounting information is used by the Companies on a daily basis. It is used to evaluate the economic situation of a business, make proper decisions, evaluate the economic situation of the business, plan for the future and manage the entire organization. A significant role is played by accounting information in order to offer the economic information for making decision inside the company. These organisms concurrently provide a extend range of information to different decision makers in marketing, production, HR, finance, supply chains and management. Inappropriately, accounting systems every so often do not adequately support the business.
This is because most of the time the system is large and complex, it has a complete understanding of the system and is not proficient in traditional information technology, so SMEs need to adopt the latest technology. Research studies have shown the greatest trend in accounting information systems for small businesses. A new trend in the world of information technology is cloud computing-based technology. Accounting Transfer in the "Cloud" is a new and innovative solution that helps small businesses save millions of dollars. Small businesses can benefit greatly from new technologies. But they have their own risks. This paper identifies the strengths and weaknesses of new business technologies. A study of Lithuanian small business accounting systems in the context of cloud computing is part of this study. Lithuanian companies have great opportunities to use cloud computing capabilities. Of the accounting systems, however, only one developer provided a cloud-based accounting program.
Conclusion on Modern Technology in Accounting
From the above study on modern technology on top of the field of accounting, it can be concluded that the development of information technology has greatly helped the accounting system in business ventures. Due to the current computerized accounting information system, the effectiveness of the business seems promising. Many transaction processes make it easy to manage efficiently. Besides that, the affordability of modern technology for small business organizations created great prospects for business improvement. Advances in modern technology improve the flow of information for efficient and systematic decision-making, which in turn enhances the strategic ability to meet corporate and business strategy goals. Businesses prefer compatible systems and software. In the modern age of information technology, the computer accounting process has improved, but the role of humans in the computer accounting system cannot be changed. Along with that, advances in information technology have allowed firms to computerize its information system. Because accounting information system has also been computerized as a result of noteworthy enhancement within the technology.
As a computerized accounting information system, accountant need to be able to implement the computerized system. The use of computerized AIS for computer accounting information systems has made it possible for organizations to perform more efficient and efficient accounting functions by saving significant money and expenses. In other words, the use of modern technology, like big data to perform accounting functions has given the opportunity for organizations to go to paperless offices. If the organization use a computerized system, production systems that affect the organization can be effectively implemented. Besides that, several tools such as electronic fund transfers and electronic data exchanges can enable firms to implement the production systems and save cash more competently.
From the finding discussed in the section of data analysis, there are some suggestions on how to reduce the difficulties in the use of modern technology in everyday accounting practice. To solve technical problems, companies should hire a lot of staff with high technical knowledge. To solve network problems, large or big companies may hire network engineers. To make sure uninterrupted modern technology is not disrupted within the firm, it must make sure all the forces of time. In other words, it is recommended to all companies is to use the benefits of electricity, generator and UPS facilities. Furthermore, a help desk should be set up to resolve these issues quickly in order to manage customer care for the convenience of maximum customer service. Moreover, companies required expertise or efficient manpower for implementing the accounting software or other modern technology. Thus, the company will allow employees to receive regular training in the latest technology as well as application. The lack of knowledge of management systems found in this study, which can train proper inventory management personnel, can help solve this problem. There are some complications when using modern technology in daily accounting practice, system damage, hardware failure, data loss. To address these issues, companies may use passwords to access sophisticated or important data, back up files to as many sources as possible, review systems regularly, and restrict unauthorized use of hardware.
References for Modern Technology in Accounting
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