The impact of technology on the public accounting profession

International Committee member for MGI Latin America Area and partner at MGI P&P Asociados Contadores Publicos in Caracas, Venezuela, Ricardo Ruiz Betancourt discusses the impact of technology on the public accounting profession.

To ask oneself what impact technology has on the public accountant’s work is redundant. The reason for this, is that the development of technology has been inherent to human progress and it has affected practically all aspects of life; the accounting profession not having escaped this influence.  However, if this question were to have been asked merely thirty years ago, the answer would not have been so obvious.  In my opinion, the change that has had the greatest impact on this profession is, without doubt, the electronic worksheet.  “Visicalc, the first worksheet would take some 20 hours of work per week for an accountant and has now been reduced to 15 minutes, allowing accountants to be more creative”[1].

When I first used this worksheet back in 1986, I immediately sensed the effect that it would have in my work.  In particular, I had that same sensation when another important moment for my practice came about which was the widespread use of personal computers - the PCs.  At that time, a computer was assigned to me at my job and with it, I was able to perform a series of analyses that complemented the reports issued at that time by an AS 400 from IBM.  I even became an expert in Lotus 123 and was given the opportunity to give courses on this program.

But this was not only a change at a personal level. Agnes Ann Pepe pointed out that “towards the ending of the twentieth century, the accounting profession began to take on a whole new look.  Computers and accounting software has changed the industry completely. With programs such as Microsoft Excel, the accountant is enabled electronic worksheets. With the use of these technologies, the CPA can make statistic analyses, financial forecasts and calculations with great efficiency. Accounting technology has allowed the accountant to move from a desk, covered with papers making calculations that took hours to be completed, to more dynamic ways of performing and, it has allowed the accountant to find new challenges and much more to offer than in the past”[2].

The use of the internet and electronic mail facilitated even more the access to information, allowing the transmission of information by email and thus reducing, the number of visits in person to the client’s offices. At the same time, external memories reduced the size of the equipment and the space required for information storage. In addition to this, auditing software programs were developed that made the auditor’s work more efficient and reduced the use of paper.

These technological advances have contributed to the reduction and transformation of accounting departments. The accounting departments disappear from the organizations in the same proportion in which the organizations acquire integrated information systems, reducing the time invested in transcribing data and placing before company management, updated information of their operations. Nowadays, “book-keeping” can be done from outside the company, thus increasing the possibility for more accountants to work under their own initiatives. Many accountants even work from their own homes. Simultaneously, corporations have reduced the accounting work per se, transferring this task to more economical and efficient places. Such changes undergone at the corporations have converted the accountant in a financial specialist, increasing his/her capacity to analyze and interpret data, thus improving the quality of the financial information reported in the entities’ financial statements.

What is the latest?

Now then, what has been occurring and what is the latest in regard to accounting? Osmond Vitez from ehow.com comments that “accounting softwares are evolving from data loading report generating programs to applications where such loading is not necessary; instead of using employees to load information on financial transactions to the general ledger, the current accounting systems can import information electronically. Proprietors and managers can define internal procedures within these accounting programs to process the information according to specific rules and instruction guides. This allows the accountants to invest more time in analyzing information than in loading information”[3].

Cloud computing is based on software, platform and infrastructure through the internet.  Users do not need to invest in servers, nor in licenses nor in updating, maintenance, renovation or in the processing of resources; all this is the responsibility of the cloud administrator who shall only bill the purchaser what is used, in effect, in the period accorded.