...EFFECTS OF TECHNOLOGY ON THE ACCOUNTING PROFESSION PAPER JEANETTE SANDERS XACC/210 JUNE 8, 2014 RICHARD VINCENT Abstract THE EFFECTS OF TECHNOLOGY ON THE ACCOUNTING PROFESSION PAPER Thirty years age most financing accounting was done by hand, which indeed left a long paper trail. “Currently, most accounting information is recorded via computers and wide area networks (Journal of Accountancy, 1994). Technology has changed the face of accounting over the last fifty years. It is unclear whether technology’s has an impact on accounting which can be interpret as being positive and negative. It is clear that technology has changed the accounting period. Some of the impacts of technology are either positive or negative which are simply changes, The impacts of technology on accounting field has been positive, negative and neutral, but the impact results cause an demand on the profession to confirm ti the changes but sudden results ti cause a huge demand the profession to conform to the changes. The advantage of technology is the various tools that it has provided. One example would be computer-integrated manufacturing, communications technology, Image processing and the Internet. An example of the many tools of technology whose purpose is to provide detailed and correct information in a short period of time. The advantage of technology is computer-integrated manufacturing technology. Computer –integrated manufacturing has a significant and positive impact...
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...Forensic Accounting Forensic Accounting has a broad range of opportunity, and there are many different purposes for forensic accountants. Forensic Accountants are highly in demand during periods of financial crisis, and soaring bankruptcy rates (Chiang, 2013). The recession has generated a high demand for this type of accounting. Today we have decided to write about the two different types of forensic accounting, who they are employed by, and finally, how forensic accounting is emerging, and had changed over the recent years. “Forensic Accountants are often called upon to analyze, interpret, and present complex issues” (Forensic accounting.com) Forensics may also have refined computer programs that help with the process, while they assist in legal proceedings (Chiang 2013).Firstly, there are two different types of Forensic accountants; Litigation Support and Investigative. The nature of litigation support corresponds with economic damages (Forensic Accounting.com); this may include partnership disputes, criminal investigations, medical malpractice claims, personal injury, and loss of breach of contract (Chiang, 2013). Another type of Forensic accounting is investigative (Chiang, 2013). This type of forensics deals with professional negligence, business and/or employee fraud, embezzlement, theft, internal auditing, observing employees, etc. (Chiang, 2013). The list for investigative accounting is quite large. Secondly, in order for forensics to participate in law they must...
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...1. Describe clearly the accounting changes Harnischfeger made in 1984 as stated in Note 2 of its financial statements. The following summarize the accounting changes made and noted by Harnischfeger: a. Included equipment purchased and resold from Kobe LTD in net sales (full sales amount) as opposed to disclosing only margin. Since the purchase of equipment from Kobe Steel, Ltd. was for the purpose of resale (vs. use or lease), this change more accurately reflects net sales. b. Financial Statements of some foreign (consolidated) subsidiaries are included on the basis of fiscal year end (July 31) vs. previous of (Sept 30 as described in Note 1). c. Changed depreciation method from Declining Balance (accelerated) to Straight-line. Declining Balance method is good for assets that quickly lose their value and leads to higer expenses (lower revenues) in earlier years following purchase. Straight line spreads the expense over the assets useful life and results in a consistent (non-accelerated) expense year over year. During this process, the firm also changed residual values and useful lives of some of those assets. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years? The cumulative effect on the change in depreciation method resulted in an increase in net income of $11 million in 1984. Under the new method of depreciation (straight-line), depreciation...
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...Executive MBA Case Summaries Accy 401, EMBA; Fall 2000 Accounting courses are usually separated into five general categories. Two, taxes and auditing, are usually quite technical and often focus on CPA preparation. The other three categories are more general: 1. Financial accounting deals almost strictly with financial statement preparation. It focuses on pronouncements issued by the Financial Accounting Standards Board (FASB) and the SEC, and on accounting concepts such as materiality, matching revenues and expenses, relevance, and consistency. It also considers highly technical details about consolidated financial statements, leases, pensions, income taxes, and inventory valuation methods that are often found on the CPA exam. 2. Financial accounting from a management perspective covers many of the same topics as financial accounting but it does so from the view of a manager using financial accounting information to help make decisions or to report an organization’s performance to others. This is the typical focus of an MBA financial accounting course, or a financial accounting course in a non-degreed program for executives. It is the primary focus of Accy 401, EMBA. 3. Cost and managerial accounting deals almost exclusively with accounting as a tool to help manage and understand a business. These courses focus on areas such as fixed and variable costs, how costs behave over time (e.g., the learning curve), cost systems, and ways to allocate...
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...From the early days of clay tokens to the invention of the abacus, accounting is as old as civilization. It wasn’t until the commercial revolution at the end of the dark ages that double-entry bookkeeping came into existence. (It began in the Venice/Florence area in Italy.) A hundred years later, Luca Pacioli, a Franciscan monk, wrote a math book that suggested merchants needed three things: sufficient cash or credit, an accounting system, and a good bookkeeper. Today accounting is commonly offered as a major of study. What do you, as a prospective accounting major, need to know about the field and the technological advances in accounting? What is commonly known today as “cost accounting” (defined as “The discipline of estimating, tracking and controlling product and service costs”) didn’t start until the late 18th century, and was spawned by an unlikely source—a world famous potter. Josiah Wedgwood was a highly successful potter when a depression hit, and he discovered that not only were his clerks ignoring much needed paperwork, they were also stealing money hand over fist. He took the time to examine the books in detail, noting inaccuracies and becoming aware of the importance of calculating overhead into the costs of his pottery. He hired a new clerk and began weekly accounting reviews, and according to historians, the concepts of “economies of scale” and “sunk costs” were discovered. He changed the prices of his pottery to reflect the influence of demand, creating both...
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...Assets:- In accounting, a current asset is any asset sensibly anticipated that will be sold, devoured, or depleted through the ordinary operations of a business inside the current financial year or working cycle (whichever period is longer). Average current assets incorporate money, money equivalents, transient ventures, debt claims, stock and the parcel of prepaid liabilities which will be paid inside a year. On an accounting report, assets will commonly be characterized into current holdings and long haul possessions ( Sullivan, Arthur; Steven M. Sheffrin (2003)). The current ratio is ascertained by partitioning aggregate current stakes by aggregate current liabilities. It is habitually utilized as a marker of an organization's liquidity, its capacity to meet transient commitments. Current assets are essential on the grounds that they show the amount money an organization basically has entry to inside the following 12 months outside of outsider sources. It is characteristic of how the organization finances its continuous, everyday operations, and how liquid a firm is. The degree of current ratios for current liabilities is especially vital in judging liquidity. Non-Current Assets:- An organization's long haul ventures, in the case that the full esteem won't be acknowledged inside the bookkeeping year. Noncurrent assets are promoted as opposed to expensed, implying that the organization distributes the expense of the advantage over the quantity of years for which the...
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...1. Introduction “The only constant is change”, as Heraclitus points out (Brainyquote.com). There is no doubt that the world has changed over time physically, economically, and culturally. As the world has evolved, so has business, and as business has evolved so has auditing. The concept of auditing is as old as civilization. The need for a knowledgeable, external, third person to verify transactions or accounts and detect fraud has been present since the advent of trade and accounting. Thus the goal of auditing, in this sense, has not changed since. Teck-Heang Lee observed that “auditing serves as a mechanism to monitor conduct and performance, and to secure and enforce accountability (Lee 2008). All in all, an audit function plays a crucial role in maintain welfare and stability in society.” However, what has changed is how the roles and responsibilities of auditors have changed to reflect the needs of the business environment of the time. As such, auditors and the auditing profession have always played a very important role in business and, more recently, in society in general. As business in today’s world becomes more dynamic, accounting (and therefore by extension auditing) must also evolve to become more dynamic. The evolution of auditing is a complicated history that has always been changing through historical events. This can be seen in the shift in the role of external auditors from a cyclical audit approach to now more of a top-down risk-based continuous audit. The...
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...September 12, 2011 Over the years modern accounting systems have changed for the better and the worse as well. The topic I picked to write of is, how have modern account systems made a difference in modern organizations? Before taking this course I was unsure of how accounting was used in businesses or the way it was formatted. I learned so much from taking this course as how to analysis transactions and use these format correctly. I have made Excel spreadsheets in other courses and for my personal use but they do not compare the assignment in this course. I have learned how to successful create balance sheets, income statements, and so much more. Lastly, I have learned the correctly in order to create successful and understandable business financial statement. The smallest corner store or largest multimillion organizations created their own innovations on which they believe to be the best account perspectives. They were successful for a short time by applying new cost such as JIT systems to improving the cost systems. Their sociological perspective can be understood as a point of view that focuses not only on individuals in a company but on the whole group or society, unfortunately many flaws and late technology slowed their progress down. Many flaws that could have been improved with their value of modern management accounts systems. The main change has been the amount of money spent by organizations. In the past, companies big or small needed a dozen accounting clerks in order...
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...1. The company began to include its net sales products purchased from Kobe Steel Ltd. and sold by the corporation in its financial statements instead of only reporting the gross margin on Kobe-originated equipment. Secondly, in 1984 they changed to a straight-line method to depreciate their plants, machinery and equipment. They had previously been using an accelerated method. With these two changes, the company was able to report an increase of net income of about $16.4 million dollars. 2. The depreciation accounting method change on the reported income in 1984 caused a net income increase of about $11 million or $0.93 per common share. Since they were previously using the accelerated method, which would have lowered the amount they depreciate every year, now, by using the straight-line method, they must depreciate the same amount for the life of the asset. Due to the change to a straight-line method, its profits will decrease in future years. 3. The depreciation lives changes will decrease the annual depreciation expense. Harnischfeger will continue to use the plants, machinery and equipment for a longer period of time before it is replaced. This might have a negative effect on efficiency and productivity due to outdated equipment. It might also increase the probability of the machines to breakdown due to their age. This will cause future reported profits to lower, which will have a negative effect on the overall reported profits. 4. According to their statement...
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...accepted accounting principles (GAAP) allow companies wide latitude in the choice of accounting policies. After a firm chooses a set of accounting policies, current accounting rules permit changes from one alternative policy to another at the discretion of the management. Since reported accounting figures are widely used by a number of external parties, managers of firms have incentives to choose accounting policies in order to influence the behavior of these parties. A variety of managerial motives for accounting policy decisions have been identified in the accounting literature. The Harnischfeger case is designed to encourage students to explore these motives. Harnischfeger Corporation, a large New York Stock Exchange company, faced a financial crisis in 1982. New management was appointed to turn the company around. As part of its restructuring strategy, the new management team made a number of financial reporting policy changes in fiscal 1984. Together, these changes accounted for most of Harnischfeger's reported 1984 profits. More significantly, these changes represented a substantial switch from the company's earlier conservative reporting philosophy to a more aggressive one. The case describes the company's financial crisis, the turnaround strategy of the new management team, and the accounting policy changes that took place in 1984. This case is a by-product of my field research, which is described in the paper, "The Anatomy of an Accounting Change...
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...Generally accepted accounting principles (GAAP) allow companies wide latitude in the choice of accounting policies. After a firm chooses a set of accounting policies, current accounting rules permit changes from one alternative policy to another at the discretion of the management. Since reported accounting figures are widely used by a number of external parties, managers of firms have incentives to choose accounting policies in order to influence the behavior of these parties. A variety of managerial motives for accounting policy decisions have been identified in the accounting literature. The Harnischfeger case is designed to encourage students to explore these motives. Harnischfeger Corporation, a large New York Stock Exchange company, faced a financial crisis in 1982. New management was appointed to turn the company around. As part of its restructuring strategy, the new management team made a number of financial reporting policy changes in fiscal 1984. Together, these changes accounted for most of Harnischfeger's reported 1984 profits. More significantly, these changes represented a substantial switch from the company's earlier conservative reporting philosophy to a more aggressive one. The case describes the company's financial crisis, the turnaround strategy of the new management team, and the accounting policy changes that took place in 1984. This case is a by-product of my field research, which is described in the paper, "The Anatomy of an Accounting Change." ...
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...2012 Sarbanes-Oxley Act’s Impact on Corporate Business Business scandals, Ponzi schemes and fraud are something we have all heard of. Over the years there have been many accounting scams from companies all over the world. We all remember one of the most publicized cases of fraud, Enron. For many years there has been fraudulent activity in many companies. Sarbanes-Oxley was established to prevent these types of scandals. Some believe it is not as valuable as once predicted, but is anything 100% preventable? Prior to Sarbanes-Oxley Act, the Securities and Exchange Commission was in place since 1934. It was established to police U.S. financial markets. However after years of failure and proof that the Securities and Exchange Commission’s wasn’t enough, the Sarbanes-Oxley Act was born. In 2002 Sarbanes-Oxley Act was created by Senator Paul Sarbanes and Representative Michael Oxley. Several large company failures not only sparked the public on fraud activity, but also these two gentlemen who decided to put into place something that would enforce financial honesty in businesses. There are several layers to the Sarbanes-Oxley Act. ,For example section 404 requires companies to have internal control report with their annual audits. This section of Sarbanes-Oxley also puts accountability and personal liability on the accounting teams of the companies. The infamous Enron scandal unraveled itself in 2001. Enron marketed gas and electricity among other public utilities...
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...How Technology Has Changed Tax Accounting How Technology Has Changed Tax Accounting The profession of tax accounting has been around for almost a century with the ratification of the 16th Amendment in 1913, which allowed the United States Federal Government to levy taxes on individuals’ income (Rettig, 2006). At that time, the tax laws were fairly simple and most people could complete their tax returns and the required calculations without the help of an accountant. Since then, the tax laws have increased so vastly in number and complexity that the average person cannot understand the laws enough to prepare their own return without assistance. This may come in the form of a tax accountant or software that walks the taxpayer through various rules that may apply to them. This paper focuses on how technology has changed the tax accounting profession throughout the years, highlighting the various innovations that have had the most significant impact. First, I will focus on how technology has changed the various aspects of tax accounting from recruiting clients and communicating with them, to filing completed tax returns and interacting with the Internal Revenue Service. Following, I will describe what tax accounting is likely to look like in the future due to some of the latest technological advances. Finally, I will summarize the major changes in the tax accounting profession over the years, and how tax accounting will continue to evolve moving forward. ...
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...clearly all of the accounting changes Harnischfeger made in 1984. -In 1984, there was a switch from accelerated to straight line depreciation retroactively. Because of this, the depreciation expense decreased. -The estimated depreciation lives on certain U.S. plants, machinery and equipment changed. The economic life of these assets was increased, so the depreciation expense was lowered. -The company entered into a long-term agreement with Kobe Steel, Ltd, to supply Harnischfeger requirements for construction cranes for sale in the United States. -There was an improvement in the minimum pension benefit. This change produced a lower pension expense. -The accounts receivable were net of allowances for doubtful accounts of $5.9 million and $6.4 million at October 31, 1984 and 1983, respectively. This decrease results in higher accounts receivable. -The was a change of the fiscal year from July 31 to September 30. This increased the sales by $5.4 million. -The R&D expense was decreased by $7 million -The was a liquidation of LIFO inventory quantities carried at lower cost compared with the current cost of their acquisitions. Because of this, COGS decreased. -The structure of the long-term debt was changed. Subordinated debentures replaced term obligation and the debt payable in German marks retired. 2. What is the effect of the depreciation accounting method change on the reported income in 1984? How will this change affect profits in future years? In 1984, the...
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...CHAPTER 22 ACCOUNTING CHANGES AND ERROR ANALYSIS TRUE-FALSe—Conceptual Answer No. Description F 1. Change in accounting estimate. T 2. Errors in financial statements. F 3. Adoption of a new principle. T 4. Retrospective application of accounting principle. F 5. Reporting cumulative effect of change in principle. T 6. Disclosure requirements for a change in principle. T 7. Indirect effect of an accounting change. T 8. Retrospective application impracticality. F 9. Reporting changes in accounting estimates. T 10. Change in principle vs. change in estimate. F 11. Accounting for change in depreciation method. F 12. Accounting for change in reporting entities. T 13. Example of a change in reporting entities. F 14. Accounting error vs. change in estimate. T 15. Accounting for corrections of errors. T 16. New principle created by FASB standard. T 17. Correcting entries for noncounterbalancing errors. F 18. Definition of counterbalancing errors. T 19. Accounting for counterbalancing errors. F *20. Changing from equity method. Multiple Choice—Conceptual Answer No. Description b 21. Accounting changes and consistency concept. b 22. Identify changes in accounting principle. c 23. Identify a non-retrospective change. d 24. Identify a change in accounting principle. a 25. Entry to record a change in depreciation methods. c 26. Disclosures required for a change in depreciation methods. c 27. Change from percentage-of-completion...
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