How Technology is Changing Accounting Accounting 525
Melissa Holland-Mitchell
December 20, 2014
Professor Jones K. Kasonso

Computer technology is always changing, so fast that many companies will simply update their current computer system continuously. Technology and the computer are a part of our lives; it helps managers make decisions to improve business operations, allows for faster transfer of information, and is simply a basic necessity to do business in many professions including accounting. There are technological trends that will have a tremendous impact on the accounting profession: cyber security, cloud, mobile devices, and big data.
The Cloud and mobile technology available today is transforming the job of the tax and accounting professionals (Proformative.com, 2012). Where technology used to be behind the scenes at the office, its use is increasingly extended beyond internal use and out to the client. Mobile accountants work remotely between 5.8 to 8.6 hours per week. By 2015 the number of mobile workers is in North America and Latin America is to exceed 212 million (Proformative.com, 2012). More accountants are using smart phones for work; mobile access allows firms to connect with clients outside of regular business hours, and other locations. Smartphone’s are quickly being adopted by the accounting professional, many still think of the Smartphone as just a mobile phone with additional features such as texting and music player. However with the advancements of the phone it would be more accurate to say that it is a small computer that can also act as a phone (Jagst, 2011). Of course laptops will continue to play an important role in the accounting practice of the future, but the tablet computer will be much bigger. Mobile computing will continue to develop in the accounting profession with applications improving on a daily basis. Capabilities that will be possible include receipt scanning and expense entry, full document viewing and editing in the field, and tax returns status viewable by clients on their own mobile devices (Jagst, 2011). Bruce Feinberg, a CPA from Michigan states that “mobile technology has really helped his firm stick out in the minds of our clients. Now when I visit client’s offices, I carry a small mobile device that gives me access to all the information I need. As a result, I can answer client questions on the spot without having to look up the answer and get back to them. This simple, time-saving addition has allowed us to provide more timely client service overall.” (Jabst, 2011). Cloud computing enable an organization to get its computing resources and applications from anywhere, the company’s resources are located in a shared technology center (Kinkela). This means there is no need for businesses to have servers, with information easily assessable through PC’s, Ipad’s, and other mobile devices. The cloud allows for instant communication and storage capabilities, businesses have a place to permanently store data and use business apps over a remote server. This technology is changing how accountants work and addresses any inefficiency that the business has, the accountant has faster access to business intelligence (Blumer). The accountant job has always been paper based and now the profession can stop using it, the Cloud has disrupting this process. The technology brings with it efficiency, less staff costs, and more timely financial information. By using Cloud technology and advanced computing tools accounting firms will realize effective automation of data collection, improved quality of data, and a reduction in the time required for data validation (Bromwell, 2013). With the increase in productivity the accountant will have more time, shifting the focus from computing to consulting as clients rely on their accounting professional to analyze information and provide advice (Bromwell, 2013). Some advantages to using mobile and Cloud technology include: it allows for an unlimited number of computers without impact to the server, it cuts costs for the business because there is not a need for computer equipment and servers in the office, information is a easily accessible from anywhere with any mobile device connected to the internet, and the companies information is organized and stored in one secure location to be retrieved by those with clearance. Cloud computing will also allow for integration of document scanning enabling invoices to be scanned and automatically sent to the accounting system and then the accountant can then go in to system to check and confirm the entry (Kinsella). Some risk or disadvantages of mobile and Cloud technology are finding ways to implement controls for employee devices for those who have access to the stored information, compatibility with other organizations tools used (Drew, 2012). With the large number of employees with access to the information there is risk for a security breach, also increasing the risk is the fact that the firm is using cloud software and the data is live on the internet (MacQuarrie CPA). The growth in the market of mobile devices has resulted in a rise in malicious software targeting Smartphone’s and tablets, along with this is the a rise in the number of employees wanting to use personal devices for work (Drew, 2012). Another worry is what happens to the data if cloud vendors are switched, or can the business get their information back (Defelice, 2010). The Journal of Accountancy article from 2010 Cloud Computing: recommends that a review of infrastructure, software, personnel, procedures, and data be evaluated before any cloud based applications are use in the accountancy process (Kinkela). The increased use of mobile devices, cloud, social media and the internet has resulted in a false sense of security and has created the perfect mix for cybercrimes. There is no doubt that the new technology has brought with it efficiency, connectivity, and productivity. However these new benefits also bring risks that result in millions of dollars in losses, from criminals invading a business’s virtual environment (Singleton, 2013). CPA’s are on top of the list for victims of cyber crimes, along with their clients, and entities they serve. The greatest threats to CPA’s are theft of sensitive data, identity theft, and corporate account takeover (Singleton, 2013). Accountants must exercise caution when it comes to clients information, in this day and age where mobile devices and other technology are allowing the employee to connect to business information through the internet and having access to very confidential information. CPA’s therefore need to work with the client to perform privacy and security reviews to assess risks levels for the CPA and the client (Singleton, 2013). Accountants should understand the flow of data, if using a Cloud provider always know where their data is and how it is being protected, who has access to their information, and how it could be destroyed (Drew, 2013). One major risk that will affect not only accounting firms but all businesses are the Bring Your Own Device to work, which allows employees to use their own device for work, downloading identifying or confidential information of clients to their personal smartphones or tablets. If a device is lost, stolen, or otherwise compromised, the critical information will more than likely fall into the wrong hands (Drew 2012). The consequence of a security breach for an accountant can be devastating, when accounting data is lost, changed, or deleted on purpose or by chance it can lead to questions regarding the reliability of the data and records (Shanker). Having internal security audits can help identify cyber security risk, all systems whether in an office or mobile should require some sort of login for verification, and ensure they have access to the information requested. Others things to consider is when you need to have your computer system looked at that this will open access to your confidential information (Shanker). Big Data is another advance in technology that accountants will eventually have to embrace. As professionals, accountants are use to being surrounded by data in all forms. What is big data: large amounts of unstructured data that is continually collected through devices and technology such as credit cards, the internet, online profiles, cloud, and Wi-Fi sensors (Chua). Big data is an incredible opportunity for an accountant, it is a rich source of data to collect, process, and analyze for their clients and their own professional business purposes (Economia, 2014). An example as to how accountants use big data is with payroll information held by accountants to ensure proper calculation and payment of tax and national insurance due for a client and its employees. When that data is collected over time it can also be used to show trends in salary, or show patterns in sick time and peaks in business activity. This data can be passed on to the client as another service (Economia, 2014). Using industry data can give your practice understanding about what is going on and then allows the accountant to pass that knowledge on as services that can distinguish their practice (Biery 2013). Accountants can use big data from the industry to: 1. Advise clients, current tax and audit clients can benefit from advice on business operations and finances. Use data to help the client see how the compare in sales to competitors (Biery 2013). 2. To gain new business, find new customers and examine industry data, this will let the possible client know that you have an understanding of their work area (Biery 2013). 3. Bring information to their clients that could help them expand in their market, by using industry data and their relationship with the client to give advice. Show the client some possible areas to expand services (Biery 2013). 4. Help current clients plan for the future, accountants can use data to show the client industry trends that could lead to a loss or profit (Biery 2013).
Some accountants and financial professionals are not ready for the big data move.
Professionals in these fields are used to more structured data that can be used in tables. The problem for accountants and those in finance is that the future is headed towards unstructured information (Katz 2014). An advantage to big data is being able to provide real-time updates to management, it will also make it easier for the auditors and regulators to sport fraud, and it is already being used in investigations (imanet.org). The main disadvantage to the use of big data is privacy, there is a large amount of data being held by businesses and they must ensure that the information remains confidential and safe. Researching and exploring by professionals in the accounting and finance profession will help them manage and extract what is needed from big data, and ensure that it is used in a competent manner, and applied strategically (Brand 2014). While accountants will find themselves going through boxes of receipts for clients, they will soon find those days gone. All financial records are in the process of becoming digital and available on online networks so that they are easily accessible from anywhere, changing the job of the accountant (nola.com). Keep in mind that smartphones, tablets, notebooks and other mobile computing devices will become the main gadgets involved in the accountants’ complex routine at home and work. These technologies will change how the workplace functions, allowing greater flexibility around when, where and how work is done (intuit.com). With these and other forms of advances the accountant can spend more time with their client, providing services that they may not have had time for in the past. Efficiency is at the hands of the accountant with mobile technology, but they still have to be diligent in keeping the clients and employers information confidential and safe. The focus of accounting will shift from computation to consulting as clients increasingly rely on their accounting professionals to analyze business information, support decisions and provide strategic advice (intuit.com).

References

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