THE IMPACT OF INFORMATION TECHNOLOGY ON THE ACCOUNTING PROFESSION IN NIGERIA
By: Idongesit Efiong Utah
ABSTRACT
This research focuses on assessing the impact of information technology on the Nigerian Accounting profession by examining four areas: Impact on the public and private sector, the challenges and reaction to the challenges posed by information technological innovation and information technologies enhancing effect on the Accounting profession.
INTRODUCTION
It is evident that we are in information driven age where information technology is a driving tool in the public and private sectors. The replacement of mainframe computers with personal computers which were affordable to most users has ushered us into an era of proliferation of information, speed of assess to and ability to disseminate information. The information technology revolution has brought about a drastic change in the business environment, its structure and the business process. Information technology has become a strategic tool that drives the strategic initiatives of organizations and businesses. Manual processes have been replaced with automated processes, routine bookkeeping and recording of financial information is being done electronically, and the ease and speed of transacting business has greatly increases. The accountant as a major player in the public and private sectors cannot afford to be left out. To function properly and competently the accountant must take the changes brought about by information technology in stride, the accounting professional must be proficient in the use of modern information technology tools in order to remain relevant , solve business problems and provide value added services to his clients in the public and private sectors.
In this paper we seek to assess the impact of information technology on the Nigerian Accounting Environment. Has the impact been positive? What is the effect of the impact? What are the existing challenges and what is being done in view of addressing the challenges posed by information technology on the accounting profession in Nigeria? To adequately assess the impact of Information technology on the Nigerian accounting Environment the paper has been broken down into five sections. Section 1: The impact of information technology on public and private sectors. Section II: The information Technology challenge on the Accounting Profession. Section III: The professions reaction to the Information Technology Challenge. Section IV: The Enhancing effect of information technology on the practice of accounting. Section V: Conclusion

I. IMPACT OF INFORMATION TECHNOLOGY ON THE PUBLIC AND PRIVATE SECTORS
The organizations in the public and private sector form a core of the accountants working environment. The accounting professional functions either as an employee in these organizations or as an external consultant rendering services to them. Information technology and the resulting information systems have had a tremendous effect on organizations. Information systems are becoming powerful instruments for making organizations more competitive and efficient. Information technology is being used to redesign and reshape organizations, transform their structures, scope of operations, reporting and control mechanism, work practices, workflows products and services. (Institute of Chartered Accountants of Nigeria [ICAN],2006)
The organized private sector is at the forefront of the use of technological innovations to improve its service delivery. Considering he fact that they are profit oriented they must constantly improve on efficiency and effectiveness in order to be able to survive the increasingly stiff competition. Though the public sector has been less responsive to the innovations of information technology, it has also been impacted. To examine the effect of information technology on both sectors we shall consider some areas in which they have been impacted.
Change in Organizational Structures: The explosion in the use of information systems has brought about the phasing out of bogus bureaucratic organizations with many hierarchical levels of management. The bogus bureaucratic structure has given way to a flatter structure where there are less hierarchical levels. Because more information is available to employees lower down the line they have assumed more decision taking roles and now actively participate in the decision making process. Modern organizations are using information technology to create more flattened structure that is very responsive to today’s market and business competitive demands. (ICAN, 2006)
Change in Organizational Processes: Organizational processes that were previously manual have now been fully or partially automated. Methods of storing information and data retrieval have moved to the use of data bases instead of the old file cabinets. The payment process adopted by the Federal Government gives credence to the wide reaching effect of information technology on the organizational process. Commencing for 1st January 2009, payments to employees and contractors are now to be made by electronic telegraphic transfers. A circular to that effect was released by the Federal treasury; it was dated 22nd October 2008 and signed by the Accountant General of The federation, Ibrahim Dankwambo. The Federal Inland Revenue Service in October 2008 issued a circular to the effect that from January 2009 remittances of the Pay as you Earn Income Tax and Withholding Tax would be done electronically and the receipts and credit notes would be generated electronically. Employees and companies have been given personal tax identification numbers which is used to track the taxes paid by them. By the use of information technology the Federal Inland revenue Service has been able to generate more revenue, be more efficient and effective in service delivery.
Information technology solutions are currently being deployed to solve identity management issues. The National Identity Management Commission in strategic partnership with leading information technology experts is using biometric data capture to obtain and store the data of registered individuals in a central data base. The National Pension Commission (PENCOM) currently uses the biometric data capture machines for registration and verification of pensioners.
The organized private sector to maintain its competitive cutting edge is championing the cause of the implementation of information technology in it operations. The financial sector is a typical case in point, most of its processes have been computerized, and thus there is a heavy dependence on information technology for the smooth running of its operations.

II THE INFORMATION TECHNOLOGY CHALLENGE ON THE ACCOUNTING PROFESSION
Accountants are going through an identity crisis as advancement in Information Technology impacts on their age-long practices and mode of service delivery. Traditional accounting work is fast disappearing as businesses get global and are spurred on by technology. Thus, as we stand on the threshold of information technology revolution across the world, two parallel movements seem to be driving change in the accounting profession. (Omoregie, 2001)
Accountants must brace up to the challenges posed by information technology on the accounting profession. The accounting professional must align with the technological innovation so they can flow along with the changes and be able to cope with the challenges. To have an insight we shall consider some of the new challenges.
Unfamiliarity with new information technology tools: More organizations have automated their processes and use new information technology tools in their business dealings. Accounting information systems have been developed to facilitate the accountant’s work; numerous accounting packages and software are currently in use, and there is a constant stream of newer versions of existing accounting packages. In this state of constant flux some accountants find it difficult to keep abreast with the constant change, while some do not have the technical know how needed to adequately harness the vast array of information technology tools at their disposal.
Resources needed for Training: In view of the identified technological gap between available tools and the accountants technical competence there is a dire need to upgrade the skill set of the accounting professional. To achieve this there is a need to train and retrain accounting professionals in the use of modern information technology tools. The cost of training and also the time constraint poses a challenge to some accountants.
Employer Requirements: As we begin the 21st century, business organizations are facing an explosion of global competition and innovation. Facilitating this explosion is the increasing ability of organizations to make good business decisions based on the large amounts of information their enterprise produces. Economists predict that by 2010 the majority of … workers will be knowledge workers--those who make their living working with information. In this environment, it is necessary for a successful business to integrate information technology into its basic processes, and, to do that, it needs qualified, skilled information technology employees. In addition, these organizations need executive management and other functional workers who have IT skills. In fact, a company needs all its workers--accountants and financial executives included--to have a high level of computer and technical skills. There is a growing need for professionals with information technology skills; the accounting professional is not an exception as they play key roles in the business process. The modern trend is that employers require even university graduates to posses a high level of technical expertise in the use of modern information technology tools.
Organizing and interpreting vast amount of available data: Digital technology has made it easier for to collect vast amounts of information and also provided means of transmitting this information from one place to the other quickly, this has led to an incredible proliferation of data. Filtering, sorting, compiling, analyzing and disseminating financial data in ways that add real value to a corporation have become daunting tasks.
In the light of the challenges posed by the information technology revolution on the accounting profession worldwide and in particular on the Nigerian accounting environment it behooves the accounting professional to brace up to the new challenges, upgrading their technical skills in the use of modern information technology tools so as to flow along with the changes and continue to remain relevant in the scheme of affairs in the corporate setting.
III REACTION OF ACCOUNTING PROFESSION TO THE INFORMATION TECHNOLOGY CHALLENGE.
In the world over accounting regulatory bodies are taking proactive measures to ensure that accounting professionals are adequately equipped to meet the increasing technical demands of employers of labour, and to function effectively and competently in this information age. Educational institutions are also developing new curricula and course contents that adequately train the accountants for the use of information technology tools. “To this end the Education Committee of the International Federation of Accountants issued the International Education Guideline (IEG) 11. The Guideline, which is on Information Technology for Professional Accountants is intended to assist member bodies of IFAC to prepare professional Accountants to work in the Information Technology environment. According to the Guideline, the society expects professional accountants to do their work competently, and to do so, the professionals must demonstrate competence in the use of IT computer-based information systems. (Omoregie, 2001)
Narrowing down the focus to the Nigerian context we shall consider the measures taken by the Institute of Chartered Accountants of Nigeria (ICAN), the body that is designated to regulate the practice of accountancy in Nigeria (ICAN is also a member of the International Federation of Accountants-IFAC), to ensure that the accounting professional is equipped to handle the challenges of the information age.
The introduction of the Technology Competence Initiative (TCI): ICAN introduced this initiative in response to the issuance of the International Education Guideline by IFAC , TCI is the professional bodies instrument for empowering the accountants for the challenge of information technology. TCI is a deliberate effort of the Institute aimed at building Information Technology competence in Chartered Accountants. This is expected to enable them serve their clients, employers and the nation at large more effectively in the knowledge economy environment. (Omoregie, 2001)
It was decided recently by the ICAN Council that TCI is a precondition for the induction of new members; the standard has been raised to accommodate the current information trend.
Introduction of the Mandatory Continuous Professional Education (MCPE) programme: In addition, it is contemplated that special certificate courses in IT for members could be organized by the Institute in conjunction with other organizations through its MCPE programme. Such courses that would serve as proof of proficiency of members could earn MCPE credit hours. Given the rapidity of the changes in information technology, their likely effects on the accounting profession in this 21st century are going to be so overwhelming and wide ranging that the character and complexion of the profession will almost certainly change beyond recognition by the present breed of accountants. What we are presently experiencing, in fact, represents a tip of the iceberg. Thus, it should be expected that the competence and relevance of present day accountants will be severely tested. This is a serious challenge to the very essence of accounting services. The enormity of these challenges has made a more aggressive, continuous pursuit of knowledge the inevitable strategic option of our time. Therefore, the intensification of the current continuing professional education training programme will continue such that the mandatory aspect becomes unnecessary. Chartered accountants of my dream should be professionals who would not be coerced to learn by fear of sanctions but by the constant need to the fight obsolescence of knowledge. (Omoregie, 2001)
Introduction of Accounting Information System (AIS): Universities and Colleges in the developed countries have introduced Accounting Information Systems as a major course on its own and in some universities it is a major component of the curriculum in the training of accountants. The emergence of accounting information systems programs: as more and more companies seek out accounting professionals with IT skills, some universities now are offering a major in accounting information systems, which mixes topics from each area to provide students with the requisite skills employers want. (Dillon & Kruck, 2004). The Nigerian University system is currently grappling with the development of adequate information technology curricula for the training of accountants.
IV ENHANCING EFFECTS OF INFORMATION TECHNOLOGY ON THE ACCOUNTING PROFESSION
Tool for enhanced performance: Information technology is enhancing accounting processes and procedures. Through the use of software, hardware, databases and network systems, financial information can be captured processed and transmitted at the touch of a button. Powerful analytical software futures exist today that that provide management accountants with the capabilities to perform data analysis forecasting, trend analysis and other managerial accounting functions. Databases provide easier and faster access to historical and current financial records, thus making auditing and financial analysis much faster and effortless than the traditional methods that involved flipping through massive paper documents. (ICAN, 2006)
Reduction of Human Error: Technology has been the major key in the accounting profession therefore eliminating the possibility of human error. Now, with the current technology tax software programs accountants can perform an individual's tax return in a matter of minutes. By simply, clicking on a few buttons, answering a few questions, providing the individual has the correct information and can easily prepare their own returns. Regardless of how hard a person try to be error free, it is nearly impossible, to compete with the accuracy of information processing systems. An example would be tax preparation. Without the help of computers and its software such as excel, quick books the accuracy of the work I produce would lend itself to costly errors as well as costly hours invested. Human error is one of the greatest obstacles that technology has helped the accounting profession overcome. Accountants are no longer pushing pencil and stacks of paper. (Mega essays.com, 2009)
Stimulus for Development: The monumental challenges posed by the use of information technology on the accounting profession has stimulated the development of the profession in a bid to come to speed with the current demand being place d on the accounting professional. The development of improved curricula in the colleges and universities, the introduction of mandatory continuous professional education by the accounting regulatory bodies and the raising of technical competence standards for the accounting professional has served to improve the skill set of the accountant and invariably has caused the profession to move forward, placing it on a better platform to serve its clients better.
V CONCLUSION
Information technology has greatly influenced the tenor of human existence; there is no sphere of human endeavor that has not been affected by the innovations brought about by information technology. The accounting profession is no exception, the business environment in which the accountant functions has undergone, structural and procedural changes and these have impacted the practice of accountancy in theses business environments. The challenge of technical gap, posed by constant technological innovation has caused the accounting profession to mandate it professionals to increase their technical competence by the introduction of mandatory continuous professional education. Accounting information systems curricula are being introduced as major curses of study, and as part of the accountant’s course content. Information technology has made available data processing and analytical tools that has simplified the accountants work, making it faster, error free, efficient and effective. From the forgoing research we can conclude that information technology has had a tremendous positive impact on the accounting profession in Nigeria as it has spurred the profession to higher levels of technical competence and professionalism.
REFERENCES
Dillon, T.W., & Kruck, S.E. (2004,Spring). Technoloqy in accounting. Management Accounting Quarterly,6-7
Institute of Chartered Accountants of Nigeria. (2006). Management information systems ,professional examination I study manual. Nigeria: VI Publishing.
Mega Essays.com.(2009). Affects of Technology on Accounting Profession. Retrieved March 24,2009 from www.megaessays.com./
Omoregie, P.A.(2001, October). The future of the ACA holder. At the 31st Annual Accountants Conference of the Institute of Chartered Accountants of Nigeria, Abuja , Nigeria.