Challenges of Accounting and Technology: An Essay Analysis

This essay explores the profound impact of technology on the accounting profession, tracing its evolution from manual bookkeeping to the integration of complex software systems. It highlights the benefits of technological advancements, such as increased efficiency and accuracy in the accounting...Read More

Running head: ACCOUNTING AND TECHNOLOGY 1
ACCOUNTING AND TECHNOLOGY
Institution
Lecturer
Name
Date

ACCOUNTING AND TECHNOLOGY 2
Introduction
It is among the oldest professions that we have since the 14th century, Accounting as a profession
has been in operation. A lot of development has since then taken place. Talk of new standards
that are coming up, while some rules are being modified to suit the emerging trends in this field.
The regulatory bodies such as International Accounting Standard Board (IASB) and the
professional organizations have as well had drastic changes from management to structure and
general guiding principles to allow them to face emerging trends currently. With such parameters
of growth, challenges are inevitable (Heintz & Parry, 2007). Over time, however, the most
outstanding problem has been the issue of technology which keeps on changing and thus causes
new enigmas.
Technology in the Accounting Profession
From the beginning, bookkeeping was done manually, and the entire accounting cycle
activities were done on manually opened journals and ledgers. With the introduction of
computers and office work becoming paperless it was necessary to maintain these records in
computers (Smith 2002). Simple computer programs such as Spreadsheet and office word was
used. There were a lot of advantages that came with this trend, but challenges were as well
inevitable. The shifting from manual basis to computer base knocked out accountants who were
experienced but too old to learn out of the profession (Lorkard, 2010). Work slows down before
learning curve is fully achieved.
The inbuilt computer programs were not modified correctly to suit the accounting needs such
as balancing of accounts, extraction of trial balance and other financial statements necessary for
reporting purposes. Accounting software was thus introduced to satisfy these requirements. The

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initial installation of this software is great exclusive of training costs. Most small audit firms
could not afford it, and such they were knocked out of the practice. The big ones thrived, and
survival for the fittest ideology was coming in the industry.
Another challenge that has come up with technology is the issue of manipulation. This
software is easily tampered with to produce cooked results that do not reflect an accurate and a
fair view of the state of affairs. The major issue of Enron is a perfect example of how the books
were manipulated to give false results, and thus people make falsely guided investment
decisions. Fake subsidiaries accounts were created for non-existing corporations. Another case
study is that of Parmalat where auditors colluded with the management to give false reports to
the shareholders. (Gibson, 2011) All these were facilitated by manipulation of books and as a
result, the corporations collapsed, something that I would say was made possible by the
integrated accounting systems.
Accounting systems are protected by passwords to keep off unauthorized individuals from
accessing them. There is thus a possible threat of hacking into the software and making
adjustments that are not supported by the occurrence of transactions. An excellent case study is
that of Neiman Marcus where hackers accessed credit and debit information of over 1.1 million
customers the breach occurred allowing malicious hackers to steal from the clients and the
organization (Melona, 2015). The hack exposed the books of the firm for four months. Other
examples are those of Sally Beauty sores and Affinity Gaming casino.
Some of the accounting systems are hard to customize and as such are not user-friendly.
These systems are made for general accounting work and not specifically for particular firms.
Different businesses have various formats of maintaining books to reflect their diverse needs. A

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non-profit making organization will not have same accounts as a partnership or a company. It is
challenging to customize these systems to perfectly suit the needs of the organization. Some
firms even engage in different lines of activities, and it could be hard to have each line of
operation with its various software to suit the requirements.
Conclusion
Finally, most of the accounting software requires constant upgrading or update, and this is costly,
and in some extreme cases, data may lose. New features are introduced, and accountants may
find it hard to adopt the upgraded system. Some of the software also becomes outdated very fast,
and this leads to constant additional costs (Carlton, 2013). Technology will remain very
important in this profession by making the accounting cycle faster, accurate and easy to retrieve
but challenges will always arise from its application.

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References
Carlton, J. (2013). Implementation costs. New York: ASA Report.
Gibson, T. &. (2011). Using Financial Accounting System. Financial statement Analysis, 2-3.
Heintz, J. &. (2007). Accounting Software. University of San Diego: San Diego.
Malone, S. (2015). Computerization of Small Business Accounting System. Journal of Small
BUsiness Management, 12-18.
R, L. (2010, November 11th). Inventory software Advantages of using them. Los Angles.
Smith, J. (2002). Getting down to business with Accounting Software. The CPA Journal, 56-60.