Question

The landscape of accounting and auditing is changing rapidly because of the advances in technology. I want you to read, think about, and discuss how accounting/auditing is impacted by technology.

Your discussion should focus on how technology is impacting accounting/tax/auditing. It should go beyond analytics. You can use your experience in your work or internship to talk about how CPAs are increasingly relying on technology and what are the implications of such reliance.

Answer 1

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

All these combined factors and technologies generated different and innovative dynamics for the activity of the public accountant, improving and facilitating the interaction and the exchange of information with the client, reducing the amount of papers and in doing so, the archives and the size of offices decreased.

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.

New technology makes it possible for auditors to analyze large amounts of a company’s financial data and test 100% of a company’s transactions instead of testing only a sample. Sophisticated tools enable auditors to perform advanced analytics to gain deeper insight into the company’s operations.

Data analytics may also allow auditors to better track and analyze their clients’ trends and risks against industry or geographic data sets, leading to better assessments throughout the audit process. This frees up auditors to spend more time scrutinizing complex and high-risk areas that require increased judgment.

Technology could eventually enable auditors to provide a greater level of assurance than today’s level of “reasonable assurance.” Technological advances might even move auditors toward a more continuous auditing and monitoring model, because they’ll be able to access client data in a timelier, standardized format.

In the future, increased automation and the use of artificial intelligence could lead firms to hire fewer junior auditors who previously performed manual tasks. But some firms worry that this will eventually create a shortage of skilled senior auditors, leading to an increase in salaries to attract experienced, high-level staff.

Accounting firms could even find themselves competing with technology companies — such as Apple, Facebook and Google — to attract employees to design algorithms.