The influence of Technology in Accounting

in finance •  last year 

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Technology in Accounting

Technology is directly proportional to transformation in accounting field, they are factors that work hand in hand to increase the pace of change in accounting as a field; that is, increase in technology will definitely leads to an increase in transformation or change in accounting and vice-versa.

What is Accounting

Accounting in an ordinary parlance can be said to mean justification or review of actions but professionally, it is an act or a process of collecting, recording, classifying, summarizing, analyzing, presenting and interpreting financial information to the users of financial statements.

Accounting in ancient times

Financial records keeping (Accounting) were said to have begun at about 4000 years BC in the kingdom of Babylonian, Sumeria and Assyria. Accounting before the advent of technology can also be traced back to a region in southwest Asia called Mesopotamia where earliest known writings discovered by archaeologists are accounts of ancient tax records on clay tablets.

It also leads to the development of writing system that was started due to a need to record business transactions. During this period, the double entry accounting system was invented, it is a system whereby each transactions has both debit and credit entries and this made the businessmen (merchants) put their trust in bookkeeping to record and review several transactions.
During this ancient period, people started keeping records of their transactions manually by marking clay tablets with the end of sticks (dried and hardened to form records), inscribing on walls and other means of keeping memory. During this period were two methods that aided accounting namely Abacus and Papyrus.
Before the advent of modern numerical system, Abacus was first used about 5,000 years ago in Sumeria to help ancient accounting users such as merchants, farmers etc in counting and other simple calculations like addition as subtraction in order to have accurate financial records. Papyrus on the other hand is a paper-like material which was believed to come in existence about 4,000 BC. It was used by rulers for recording tax receipts, tributes, courts documentations etc and also to account for their wealth. Although accounting during this period has came to practice but it lacks adequate facilities due to absence of technology which resulted to inadequacy of financial records, difficulty in preparing the records, wastage of time and efforts and other inherent problems.

Accounting in electronic age

After the advent of technology, it is rare to see anybody using old equipments such as abacus and Papyrus to do simple calculations when there are now highly computerized calculators with amazing function of solving loads of mathematical problem that may occur while recording and sophisticated software of spreadsheet programs such as Microsoft office Excel for recording and reporting transactions, keeping all data well organized and classified in a single location. In which these accounting programs has made accounting as a field easier, faster and worth doing.

Another impact of technology on accounting is the eradication of using clay tablets, paper and pencil, inscribing on walls and other ancient method of keeping records and replaced them with highly programmed equipments such as computers, faxes, scanners, printers etc and in which these equipments are fast and very easy to use. Another good thing about these equipments is that they are not costly and can even be purchased by small scale business.

Another part that technology has vehemently helped accounting is the issue of security. Prior to the advent of technology, there was nothing like adequate security for financial transaction recorded.

Walls and clay tablets are visible to everyone either authorized or not, papers are left around and make financial records vulnerable to external threats but after the intervention of technology, highly protected identification password known only to the authorized person to the records have been created, accounting programs are encrypted to prevent them from external use or threats and lost files can be found distantly.

The advent of technology in accounting led to great advancement in this professional field, numerous positive impacts are being seen and cannot be overlooked, I only took out only few from lots, to let people know what a great help technology is to accounting.

Thank you for reading (Gracias)

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