Accounting Principle Technological Changes

Question: Discuss about the Accounting Principle for Technological Changes. Answer: Introduction The society has evolved through various technological changes in last two decades. The organization earlier needed a wide range of employees for administrative functions have now adopted integrated management system to manage their activities in real time with fewer employees. This phenomenon has also affected the accounting professionals. The Accounting professionals have always embraced technological innovation for performing their task more efficiently, effectively and accurately. Throughout the history accounting professionals for calculating simply and quickly have used clay tablets, then adding machines and calculators on 19th Century to the computers on 20th Century. The pace of technological development in recent times has increased thus changing the business and professional landscape very rapidly (Taipaleenmki Ikheimo,2013). Thus adopting to these technological changes rapidly is the biggest challenge for accounting professionals. The technological changes have necessitated the accounting professionals to broaden their education and skills. There may be other effects of the information technology innovation on accounting professionals. But no details study has been made to answer the question of impact of future technological innovation on accounting professionals in Australia. It is not possible to predict the future with certainty but there are certain measures that can be adopted so that burden of technological changes could be minimized and benefit derived from such changes could be maximized. This measures includes being informed about new technological innovations and assessing their impact on accounting profession. In this report an attempt has been made to study and evaluate the impact of technological changes on the skills, Ethics and carrier opportunity of accountants. Technological Innovations and Accounting Profession In recent decades there are numerous technological innovations that have taken place. But among them there are few path breaking technological innovations that have reshaped the accounting profession (Drew, 2015). Mobility The recent developments in information technology have changed the way business functions. The modern workplace has changed; employees have become increasingly interconnected and have access to information at their finger tip. The wireless networks, operating systems and application system have enabled access to information anywhere and anytime. Espousal by Accounting professionals. The Accountants have adopted this mobile technology for providing effective and efficient service to their clients. It has allowed the professional to be always connected with their business and client from any place (Zeff, 2003). So the opportunities provided to the accounting professionals by this technological advancement are: Connected workplace; Improvement in efficiency and productivity; Smooth communication with client thus helping to provide better service; There are certain challenges faced by accounting professionals due to this technological improvement. They are: It is necessary to have proper understanding of the communication service and devise that are suitable for the purpose. This requires continuous study and broadening of knowledge; There is a growing concern about cyber security and theft of information; As internet becomes more pervasive it will lead to change in working pattern. Social cooperation In last two decades social media has grown tremendously and the scope its of use has also widened over the years. It was initially just used for sharing pictures and information but the development of social media sites for instant messaging, blogging; crowd sourcing etc. has made social media sites hugely popular. As the social media sites started to attract large audience the business organization started to exploit these sites for gaining popularity and attract customers (Suddaby, et. al., 2015). Espousal by Accounting professionals. The social collaboration and new possibilities has reshaped accounting profession. The professionals are increasingly using crowd sourcing sites for improving and developing their services. The businesses all over are using social tools to collaborate with their clients as this are becoming new norms so accountants are also expected to collaborate with through social platforms. The professionals are required to reassess their working methods and business model in the light of new technological improvement. Accounting Professionals are required to: Develop new skills; become accustomed to changing professional requirements; and Educate and enforce better controls for governance. Big Data As per study every day 2.5 quintillion bytes of data is created from various sources. This data if collected and analyzed can help businesses to make better decision and effective planning. The big Information Technology giants like Google, IBM etc have used this data to their advantage by generating sales, personalizing products, making services more efficient, achieving higher productivity and customer satisfaction (Vasarhelyi et. al., 2015). Espousal by Accounting professionals. As huge volume of information is generated from every business activity so accountants are required to: Analyze the data critically so that meaning information could be derived from huge volume of data; Find new way to manage this huge volume of data; Audit and analyze complex data; Find innovative ways to estimate cost and return on investment. Cyber Security The organizations have become reliant on digital information this has exposed them to modern threats of data theft, hacking, infectious files in the system etc. The theft of digital information has become more common than physical theft and also a recent study has shown that medium and small enterprise are less digitally secure so are prone to more cyber attacks (Chou, 2013). Espousal by Accounting professionals. The use of internet has increased so also the risk of data security. To prevent data theft and other cyber crimes various data security tolls have been developed. Most of the prevalent security models reactive thus providing advantage to cyber criminals. So countering this cyber threats requires the accountant to: take more active steps to mitigate threat ; review its cyber security on a regular basis by taking into consideration new risks and threats; and Integrate cyber security with the business model. Virtual Reality Augmented Reality helps in enhancing perception of real environment. Virtual experiences are becoming interactive thus accounts are required to deal with new threats and opportunity. Espousal by Accounting professionals. A need for change is felt so the accounting professionals are required to prepare or a change in education, customer service, data processing and analysis. Accountants are required to Find innovative ways of attracting talent and training; Developing new ways of conducting with the help of virtual reality. Cloud Computing The internet has evolved from being computing machine to networking machine. It has now interactive computing platforms that are connected online to provide internet based technology resources such as softwares, applications etc. The accounting package system was one of the first software that became available online and since then various softwares as service is becoming available online. Espousal by Accounting professionals. The cloud technology has the potential to provide immense benefit to the business. The accountants can use this technology pro actively to make better strategic decision and gain advantage. The Accountants are required to: Asses the actual cost of implementing cloud technology; elucidate domestic and international tax regulation ; and Obtain detail price data from infrastructure vendors. Skill Development and Carrere Opportunity of Accounting Professionals The technological innovations have made it necessary for Accountants to continuously learn and new skills along with traditional accounting knowledge (Pan Seow, 2016). There are increasing needs for accounting professionals to collaborate and work in a virtual environment. This requires the accountant to develop a new type of inter personal skill that are quite different from traditional communication skills. The Accounting professionals of this century are not only required to use technology but the professionals are also expected to deal with challenges and exploit opportunities arising from technology (Henry Hicks, 2015). Accounting profession was one of the safest careers to be perused in Australia. But as the number of student perusing accounting courses has increased the employability for accounting professional has decreased (Cernusca Balaciu, 2015). This huge increase in accounting graduates has made a demand supply imbalance. The supply has far exceeded demand thus reducing the value of accounting profession. Accounting Profession can be broadly classified in four major fields they are Public Accountants; Government Accountants; Management Accountants and Auditors. The public Accountants mainly work in the field of audit and tax. The big accounting firms usually employ public accountants having master degree in accounts. Management Accountants main function is reporting, planning and decision making (Murphy, 2015). An individual having bachelors degree with professional qualification is preferred for this position. Government Accountants work in various department of government organization and a bachelors degree is preferred. Auditors are required to establish internal control, develop accounting systems etc. Thus a professional degree is preferred for this position (Apostolo et. al., 2015). In this report an analysis is made on the current requirement of skills that an accountant need to posses. This analysis is done on the basis of advertisement of accounting jobs that are available online. The study has shown that the accountants are required to have the following sets of skills to increase their employability: For most senior accounting position being a Chartered Accountant or Certified Public Accountant is mandatory; For intermediary positions having a bachelors degree is mandatory; An accountant is also expected to have advanced knowledge in excel and other MS office suite. In many cases it was observed that being having knowledge in SAP s preferred but not mandatory; Apart from academic skills importance is also given to interpersonal skills; All the job advertisement requires an accountant to be an excellent communicator; Should have the ability to work in team and lead the team; An accountant is also expected to work accurately under pressure and strict deadline. This analysis has shown that expectation from an Accountant has broadened. It is not only expected that an Accountant should have sound knowledge in finance but it is also expected that they have an overall characteristic of being friendly, good communicator, a team man and a problem solver. Ethics in Accounting Profession The financial information of an enterprise is monitored and controlled by the Accountants. The roles of accountants have come under public scrutiny after recent debacles and collapse of important organizations. As per Walsh (2014) the ethical role of accounts is not only important for internal functioning of an enterprise but it is also similarly important for outsiders. The Accounting professionals are expected to act in public interest (Sharpe, 2016). They have a unique responsibility of providing professional service to their clients and also an accountant is required to be truthful and uncompromising in providing financial information to the public. The Accounting professionals are required to follow the fundamental principles of objectivity, integrity, confidentiality, professional behavior, professional competence and due care (Welsh et. al., 2015). Objectivity and independence are important ethical values for an accountant. An accountant should be free from conflict of interest while providing its services otherwise it may hamper his/her ability to provide an objective accounts of the company. Integrity is an important principle that requires the accountant to be honest in providing financial information. An Accountant is required to maintain confidentiality of informations that are statutorily not required to be disclosed by an accountant. An account usually has access to vital information regarding a business thus this ethical principle is very essential and is always required to be followed. An Accountant is required to take due care of all the technical and ethical standards. Due care means exercising diligence, competence and having complete understanding of financial information presented. The need to follow Ethical principles has increase with improvement in technology because it has become easier for an accountant to manipulate information and indulge in window dressing of financial statement (Andon et. al., 2015). The advancement of technology can also be misused by the accounting professionals thus a strong moral and ethical principle can act as a deferent for those indulging in unethical activities (Traisatru, 2016). Conclusion The technological landscape has changed so is the Accounting profession. The recent development of accounting softwares has made maintaining accounts an easy task. The higher level of skills and knowledge once required for doing basis accounting work can now be done with little knowledge in accounting. Thus it can be argued that bookkeeping has become so easy due to advancement of softwares that one need not be a professional accountant to do be a bookkeeper. But the overall scope of the accounting profession has broadened bringing forth new challenges that requires accountant to learn new sets of skills. The accounting skills may provide excellent career opportunity but the employability of bachelors in accounting has reduced due to demand supply imbalance in job market. But in spite of this an accounting profession has wide variety of career path to choose from. An accountant can work for public accounting firm, public sector, self employed and small business. A highly qualified ac countant is employed as directors of the company, board member, chief executive officer and many other senior posts. It can be concluded that a degree in Accountancy offers a lucrative, challenging and dynamic career. Reference Andon, P., Free, C., Scard, B. (2015). 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