Question

Examine the role of Information Technology (IT) in the following areas of accounting - financial accounting, taxation, management accounting, auditing and public sector accounting. (150 words each)

Answer 1

Role of information technology in various systems :-

Information technology (IT)

1. Role of information technology in financial accounting :-

A. IT enables time to time delivery of the required reports to the senior management for decision making purpose.

B. IT enables organization with speedy and accurate recording of all financial transaction on time

2. Role of IT in taxation :-

A. Human beings may forget some compliances of taxation but IT never forget if we have programmed it correctly, it means IT enables use to comply all the applicable tax compliances.

B. We can get more tax benefits in the same way of tax compliances.

3. Role of IT in management accounting :-

A. IT enables us to fix optimum and realistic standards and budgets and can make speedy rectifications or ammendments for fixed budgets.

B. IT enables us to quickly compare performance of one employee to other and actual performance with standards, comparison of our performance with competitor and industry averages.

4. Role of IT in auditing :-

A. Now-a-days auditors has to verify, vouch a lot of transaction, manually no one can do it, but IT enables to vouch all the required transactions by using computer assisted audit techniques (CAAT)

B. IT enables us to get a complete confidence if whole transactions by selecting and small proportions also.

5. Role of IT in public sector accounting :-

A. in public sector accounting there will be a lot of transactions to record and summarise which cannot be done by manually, but IT enables and works it very accurately

B. As public sector entities are highly regulated, they will be requirement of high reports and statutory compliances, the IT enables us to generate all the required reports and comply with all the regulatory norms.

These are all the information required to solve the above given question.

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