Accm 4600 Accounting Theory And Assessment Answers

The key elements of your report should be understandable to both accountants and nonaccountants (the boards of the accounting firms often include non-accounting professionals).

Your manager has requested that the report contains (but is not necessarily restricted to)responses to the following aspects (as they impact on accounting):

1. What is the “issue of concern”, that you have selected?
2. How has this “issue” impacted the work of accountants in recent decades? 

Answer:

Introduction:

 The changing technology is on a sustainable path that makes most of the accounting firms to feel out of competition if they fail to update their technological capabilities. When companies make their annual reports that have financial reports within as well, most companies feel outmatched when the contribution of technology is mentioned to have made significant contribution to the reporting company. This means the technological focused companies that have made huge investments in technology have reaped massive returns as far as business is concerned. It is also important to realize the fact that there are some specific tech-related skills that are becoming increasingly important in many different industries, including accounting and finance. For example, most employees in the financial sectors of the world will agree that expertise in Excel is both sought after and critical for one’s day-to-day work. While this program is not new to the digital world, it has vastly advanced over the years, introducing new features and functionalities that provide better accuracy. This study, therefore, aims to discuss keeping up with the new technology in accounting the issues involved in the process.

New Technologies in Accounting:

There are a number of new technologies in accounting sectors of various industries in the world. The changing business environment and competitiveness requires adoption efficient and effective technologies in the financial sectors. Accurate, transparent, and updated accounting information is mandatory for sustainable reporting and accountability in any company. For purposes efficiencies in financial reporting, it is prudent to acknowledge the fact that dramatic change in the business operation under the influence of Information Technology has also changed the facets of strategic, structural, business process as well as the objectives of the companies (Alles, 2015). Today, companies are investing heavily on the technology, Information Technology, in particular. Based on the arguments the rapid dependence and development of information technology as well as the increasing demand for the accounting information, the accounting products and services that were part of the traditional accounting standards are being broadened currently in order to cater for the analytic information as well as adding management and the decision supportive functions.

Most markets are becoming digitized and the pace of technological advancements has revolutionized business processes. As a result, there is a strong shifting from analogue to digital forms of doing business in terms of structural changes within the economy (Brynjolfsson and McAfee, 2014). Through these structural changes in the industrial affairs, there is a pressured scheme of techniques to adapt to the digital world by the various industrial players in order to keep up the competitive ladder in their areas of operation. These techniques are also made amply with the structural changes in order to survive the shifts in technical models.

It is also important to realize that the massive changes in the technical facets of accounting processes have also inserted massive pressure on the business strategies and requires companies to model new ones. Within the perspective of the keeping up with the technology in accounting reports, there are new requirements that are coming up among the companies so that they can develop new models of business, value chains, as well as organizing new ways of activities to manage these new business strategies (Church, Schmidt and Smedley, 2016). As a result of all these, the whole market is changing with the changes in the processes that are innovative and experts adapting quickly to technological links to accounting processes.

Change is inevitable and the accounting industry, like many other industries in the various sectors of the global economy, are already involved in technological changes in the face of a more digitized world and growth that has the precedence to continue on a sustainable path. In this way, it is prudent to state that the accounting industry is like many other industries are experiencing the need for a change due to digital technologies (Collier and Dercon, 2014). Therefore, technology is becoming a competitive accounting tool that that is capable of transforming the mainframe financial reporting. 

Ways in which technology is changing Accounting sectors:

Today, when an accounting company is not fully digitalized, they are likely to use offline software that storage data in different offline systems, divided in different software programs as well as analog storage. This makes the processes of collecting, analyzing and storing data more complex, time demanding and demands parallel data storing. There have not been many transformational shifts in the accounting industry, considering the age of the profession (Coyne, Coyne and Walker, 2016). The trend occurring with technology of the accounting industry is leaving the traditional billing system with hourly billing for client communication technology and the efficiency it has brought the accounting industry through the benefits mentioned before, makes it possible to take fixed fees and package the company services.

There are a number of ways in which technology has change accounting processes and procedures as well as the accounting outputs. In the wakes of all these, there are also ways in which technology is continuously transforming the accounting sectors. Some of them are discussed below in the following arguments. There are certain software that are indispensable for the modern day accounting processes. These programs makes accounting process very accurate, effective and more efficient than the ancient analogue accounting systems. Based on the key technological trends, the following analysis focuses on the key features of accounting and technology affecting both small and large businesses that rely on their accounting reports and processes to increase their value or worth.

In most cases, the changes that are introduced in the rules of the VAT (value added tax) in a country must affect the tax software. In order to keep up with the technology and the economic systems, it is important for the various accounting experts to update their technological aspects and the businesses that supply the digital services to become upfront in all these (Ellison, Gibbs, and Weber, 2015). More than that, the firms supplying the technological support services to the consumers, that are mostly firms, normally registers with the HMRC section of the government that institute the VAT systems or schemes. It is also important to keep up with the accounting and financial compliances that are always modifies based on the present economic statuses of the various countries.

The periodic investments like the annual investments require an updated programs and accountability to align with the tax systems. Most tax systems are in the process of assisting companies and individuals to cut costs of registrations, submissions, or correction by making the process attainable through the online platform. This is also done in the process of harnessing and enhancing efficiency in the process. However, ultimate aim in all these is to keep up the speed with the technological advancements. Most of the changes involving cutting costs through the online platforms have affected the tax software on the ground as well as some of the business models that are used in many practices of accountancies (Gaviria, Arango, and Valencia, 2015). For the purposes of keeping up with the technology in accounting processes, the taxpayers who log on to their digital account will be able to pay the tax at any time in the year. Businesses will still need help and advice from tax specialists, but the nature of that help will inevitably change. The advising firms, who offer technological services to their client firms, will therefore need to consider what tools they will need in future.

Technology to improve efficiency: The growing changes in the financial systems is expanding the demand from the accountants as well as the taxation advisory and policy makers for tools that help them improve their efficiency. These tools are also significant in managing risks because of the increasing commoditization of the various work compliance. Most of the analytical tools in accountancy and in tax systems are vital in assessing, evaluating, and identifying anomalies in the accounting data, thus the need for further investigation and report of error as they occur (Najam, Runnalls and Halle, 2016). These are the precedents of auditing because these technological advancements helps the client firms to spot the problems earlier enough to make changes. Therefore, they enable accountants to set custom alerts among others.

Technological advancements help firms to find new business: The software used in tax systems and accountancy help them to find new businesses in the changing market. With the increasing need for high level value added functions, the management practices in the financial sectors are gearing up for new courses of business.

Mobile working: The mobile working has also enabled many to be able to have access of tax as well as accounting data, which is remotely useful. The small and large businesses have the need to record expenses any time they want, even on the finger tips. They also need to check their financial data and being in a position to manage their accounts from their mobile devises (Keep, 2014). The accountants as well as the management have a high demand from the technological tools of analysis because there is increased need for financial analysis, interactions between firms to firms as well as accountants and clients. This is, according to Parker and Fleischman (2017), the aspect of having an easier access to information when out of the office and be involved in innovative and creative strategies.

How technology has changed accounting:

The relationship between technology and accounting has enabled the accountants to obtain tools and procedures that help them to be in a position to reduce the margin of error. The available processing tools with specialized software of accounting have allowed some dramatic improvement in accuracy in the field of accounting and reduction of the margin of error.

According to the statement of Schneider, Dai, Janvrin, Ajayi and Raschke (2015), the accounting use of technology is advancing from the use of simpler software like Microsoft Excel, which is normally used in data entry and running ledgers, to the use of specialized software. These specialized software are used in the provision of simplified data entries while providing guarantee of the ledgers and accurate financial reports. In most cases, since high margins of error leads to tax penalties as well as uninformed decision makers, these technological enhancements helps in eliminating tax penalties as well as helping these firms to make informed decisions.

The use of these specialized software programs has reduced the need for accounting training. Due to these specialized programs of accounting, accountants are in a position to easily access the computer and have the right system that can perform tax preparation services, the statistical analyses as well as forecast modeling with more efficiencies than ever before (Watty, McKay, and Ngo, 2016). With the technological helps, accountants in the client firms are becoming professionals with effective production output due to their diversified roles in the strategic arms of the firms.

According to the statement of Schön (2017), the accounting industry is estimated to have a high probability of becoming automated. It means that companies of the industry need to meet this change and need to understand what it will require of their businesses for survival. Even though the need for business modeling seems to be evident for digitalized accounting firms, no general mapping exist to serve as guidelines for the needed elements.

Threats and challenges of neglecting technology in Accounting

Technological advancements in the world are causing numerous changes, some of which are opportunities to firms while some are threats. Having studied the advantages of technological use to the accounting systems, it is important to examine the threats offered by the technological use in accountancy. Based on the statement of Sharon and Zandbergen (2017), one of the threats of using technology or neglecting technology is the risk of losing control through digital technology. This is due to the fact that advancements in technology are offering new opportunities to clients and as a result, putting accountants at risk of losing their clients. In this way, in order to avoid and counter the effects of the threats neglecting technology in accounting and remain relevant in using technology wisely to stay ahead of competitors, the accountants are encouraged to be aware of market risks and take steps to harness these threats.

With the continued upgrading aspects of technology, there is a constant threat that the accountants face. They have to keep up their skills and techniques in check. There is a rise in the number of unqualified accountants that is based on qualification and professionalism. This means that unqualified accountants have very narrow sets of skills even though the firms that employ them rely heavily on them for help and guidance. These risks have negative effects on their growth and development leading to deterioration in the trusted as well as the goodwill of the status earned in the industry (Vasarhelyi, Kogan and Tuttle, 2015).

Apart from the unqualified accountants, there is also the threat of online technologies that are constantly giving providing pressure on the accounting departments of the various firms. With the coming of the new online technologies as well as the advent of the culture of the mobile internet, there has been a proliferation of the number of cloud-based accountancy programs. As it stands, the services of the qualified accountants does not match the interferences or threats given by the online technologies (Slavin and Schoech, 2017). Expertise in the accounting systems and advances on the tax planning with business decision making procedures help the large firms due to their broad accounting and financial analytical tools and skills.

The increasing sectorial costs, the decline in the expenses and overheads, the public resources that are shared as well as expansions that provide diverse selection of services to customer may not be relevant sometimes. Therefore, as a result of this, there are many in the accounting industry who would argue that firm consolidation is actually a solution to problems facing a number of accountants.

Mitigation strategies:

It is necessary for the accountants to enhance their understanding of the new accounting software programs along with other business and financial applications for ensuring effectiveness in auditing work by performing responsibilities adequately. This mandates the need of ongoing professional judgment, research and education as components for the auditors. The auditors are required to develop insight of and practical skills needed for using technology as leverage. For instance, the integration of information arising from integrated enterprise resource planning having virtual access to smart phones, communicating via social media and adoption of web pages. These need to be accessed to the clients, which would be fundamental for the business practices.

Specialist team:

The growing changes in the financial systems is expanding the demand from the accountants as well as the taxation advisory and policy makers for tools that help them improve their efficiency. These tools are also significant in managing risks because of the increasing commoditization of the various work compliance. Most of the analytical tools in accountancy and in tax systems are vital in assessing, evaluating, and identifying anomalies in the accounting data, thus the need for further investigation and report of error as they occur.

It has been often witnessed that the organizations fail to maintain the confidentiality of client information. With the help of a specialist team, it is possible to assist the clients and the employers in handling risk and avoiding litigation arising from viruses, thefts and other violations of the securities of the systems. Even though the role of the electronic tools and techniques are immense in assuring that only particular persons have access to information stored in computer system, the individual behavior plays a role in determining the effectiveness of security structure, After breaking into a large computer system, the hacker could copy datasets easily including numerous user passwords containing necessary information about the clients. Therefore, if a specialist team is appointed, it would avoid such issues. In this way, in order to avoid and counter the effects of the threats neglecting technology in accounting and remain relevant in using technology wisely to stay ahead of competitors, the accountants are encouraged to be aware of market risks and take steps to harness these threats. Expertise in the accounting systems and advances on the tax planning with business decision making procedures help the large firms due to their broad accounting and financial analytical tools and skills.

Recommendations:

If technology is ignored, it would show hostility. Therefore, it is necessary to change the thinking patterns in relation to book-keeping and attitude towards the same as professionals. If this is managed effectively, the potential profits that could be obtained with technology should be huge. A bundle of data is deemed to be observed, which are to be transformed. Therefore, the first question is to ascertain whether technology should be a threat for the book-keepers. In order to deal with this issue, the accountants need to be provided with adequate training of the accounting software programs and thus, it would assure effective client services.

Conclusion:

There are many current issues and emerging trends that are constantly affecting accounting, positively or negatively. Among these factors, technology is a stand out that cannot be neglected. Technology is virtually running the world, and every sectors and department depends highly on the technological output. In the systems of accounting, financial outputs and reporting are massively reliant on the technological tools and skills to make effective meanings that project the firm to the next level. In this way, there is a sustainable relationship that will go to the future between accounting and technology. Despite all the threats, challenges, trends, and emerging issues in this industry, the good news is that the accountancy industry is still seen as trustable and reputable, and in continuing to develop professional relationships with other industries and supporting new businesses, the future is looking positive. 

References:

Alles, M.G., 2015. Drivers of the Use and Facilitators and Obstacles of the Evolution of Big Data by the Audit Profession. Accounting Horizons, 29(2), pp.439-449.

Brynjolfsson, E. and McAfee, A., 2014. The second machine age: Work, progress, and prosperity in a time of brilliant technologies. WW Norton & Company.

Church, K.S., Schmidt, P.J. and Smedley, G., 2016. Casey's Collections: A Strategic Decision-Making Case Using the Systems Development Lifecycle—Planning and Analysis Phases. Journal of Emerging Technologies in Accounting, 13(2), pp.231-245.

Collier, P. and Dercon, S., 2014. African agriculture in 50 years: smallholders in a rapidly changing world?. World development, 63, pp.92-101.

Coyne, J.G., Coyne, E.M. and Walker, K.B., 2016. A model to update accounting curricula for emerging technologies. Journal of Emerging Technologies in Accounting, 13(1), pp.161-169.

Ellison, N.B., Gibbs, J.L. and Weber, M.S., 2015. The use of enterprise social network sites for knowledge sharing in distributed organizations: The role of organizational affordances. American Behavioral Scientist, 59(1), pp.103-123.

Gaviria, D., Arango, J. and Valencia, A., 2015. Reflections about the use of information and communication technologies in accounting education. Procedia-Social and Behavioral Sciences, 176, pp.992-997.

Keep, E., 2014. Corporate training strategies: the vital component. New Perspectives, pp.109-125.

Najam, A., Runnalls, D. and Halle, M., 2016. Environment and Globalization: Five Propositions (2010). The Globalization and Environment Reader, 19(8), p.94.

Parker, L.D. and Fleischman, R.K., 2017. What is Past is Prologue: Cost Accounting in the British Industrial Revolution, 1760-1850. Routledge.

Schneider, G.P., Dai, J., Janvrin, D.J., Ajayi, K. and Raschke, R.L., 2015. Infer, predict, and assure: Accounting opportunities in data analytics. Accounting Horizons, 29(3), pp.719-742.

Schön, D.A., 2017. The reflective practitioner: How professionals think in action. Routledge.

Sharon, T. and Zandbergen, D., 2017. From data fetishism to quantifying selves: Self-tracking practices and the other values of data. New Media & Society, 19(11), pp.1695-1709.

Slavin, S. and Schoech, R., 2017. Human services technology: Understanding, designing, and implementing computer and Internet applications in the social services. CRC Press.

Vasarhelyi, M.A., Kogan, A. and Tuttle, B.M., 2015. Big Data in accounting: An overview. Accounting Horizons, 29(2), pp.381-396.

Watty, K., McKay, J. and Ngo, L., 2016. Innovators or inhibitors? Accounting faculty resistance to new educational technologies in higher education. Journal of Accounting Education, 36, pp.1-15.