Question

What is the benefit of contemporaneous reserve accounting?

How do the advances in the information technology affect this benefit and cost of contemporaneous reserve accounting?

Answer 1

Contemporaneous reserves are a form of bank reserve accounting that requires a bank to maintain enough reserves to cover all deposits made during a week. The use of contemporaneous reserves accounting is designed to reduce short-term monetary fluctuations. The Federal Reserve required banks to use contemporaneous reserve accounting between 1984 and 1998.

Following are the ways in which information technology helps contemporary reserve accounting-

Artificial Intelligence & Robotics - Artificial intelligence and robotics is automating complex and repetitive tasks and processes, with extreme accuracy, reducing operating costs and increasing efficiency

Cloud Computing - Cloud computing is a type of Internet-based computing that provides shared computer processing resources and data to computers and other devices on demand. This allows accountants to perform accounting tasks from any location as well as the ability to deliver financial information and reports through the cloud

Innovations in Tax Software - The tax software of today has helped improve accuracy while reducing margins of error - something businesses want to embrace in order to avoid tax penalties and prevent issues with stake holders.