ACCM 4600 - Technology Impact on Global Accounting Practices

This report evaluates the impact of technology on international accounting policies and practices. It highlights the necessity of adopting efficient technologies in financial sectors for accurate and transparent reporting. The study acknowledges the influence of IT on business operations and its effects on strategic, structural, and business processes. It discusses the decreasing need for extensive accountant training due to advanced accounting software and the constant need for accountants to update their skills. The report also addresses the rise in unqualified accountants and the importance of adapting to technological advancements for career progression. Furthermore, it elaborates on new technologies in accounting, how technology is changing the sector, the threats of neglecting technology, mitigation strategies, and provides recommendations for accounting firms to stay competitive in a digitized world. The report concludes that technology is a crucial competitive tool transforming financial reporting.

Running head: ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Accounting Theory and Contemporary Issues
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Letter of Transmittal
ABC Consulting Firm
24th September 2018
Mr. David Brown
Dear Mr. Brown,
I submit a proposal herewith in support of a research topic “The impact of the role of
technology in the international accounting practice” to be carried out under my supervision in the
organization. The questions associated with any technical aspect of the proposal should be directed to
me. Your consideration of my proposal is highly appreciated.
Regards,

2ACCOUNTING THEORY AND CONTEMPORARY ISSUES
Executive Summary:
The current report aims in evaluating the impact of the role of technology on the international
accounting policies and practices. 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.
The requirement for training the accountants has decreased due to decline in rise in technological
upgrade in different accounting software. 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. Since technologies are upgraded continuously, there is a constant threat to the
accounting profession. They have to keep up their skills and techniques in line with such
advancements. There is a rise in the number of unqualified accountants because of 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. Hence, for dealing with these
issues, the accountants need to cope up with the changing technologies and advancements for
progressing further in their profession.

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Table of Contents
Introduction:............................................................................................................................................4
New Technologies in Accounting:..........................................................................................................4
Ways in which technology is changing Accounting sectors:..................................................................6
How technology has changed accounting:..............................................................................................8
Threats and challenges of neglecting technology in Accounting...........................................................9
Mitigation strategies:............................................................................................................................10
Specialist team:.....................................................................................................................................10
Recommendations:................................................................................................................................11
Conclusion:...........................................................................................................................................12
References:............................................................................................................................................13

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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

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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.

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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

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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

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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

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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).

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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.

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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.