The impact of information technology on accounting world Essay

The impact of information technology on accounting world - Essay Example BACKGROUND Accounting is as old as mankind and people used accounting to settle their scores even when the barter system was in place. People used different methods of keeping records of their transactions and claims to settle their exchanges as monetary transactions. When accounting was revolutionized, people brought up several new ways of book keeping which were beneficial and easy to go about. Different rules and principles came in to being when people gave rise to concepts of accounting such as accrual, matching, fair presentation and consistency etc. With progress in this field, people adopted the use of profit and loss statements as well as balance sheets to conduct their accounting but even then paper records were maintained. This was a hectic exercise which required a lot of time and tracking of records to keep them up-to-date with their daily transactions. This need of time gave rise to Information technology to come and level up the score where the requirement of time savin g and keeping track of records could be maintained. Not just that, the way conventional accounting used to take place could also be revolutionized and new and easy ways of book keeping can be brought up where standards and ease are both maintained simultaneously. BEGINNING ERA In the beginning era when information technology was introduced in the field of accounting, people started opting soft databases in place of hard copies of their records for the purpose of book keeping and tracking the transactions. This not only helped the hectic procedures of keeping the accounting records secure but also helped in the reduction of storage cost. The use of software that can calculate the results better and more accurately were used to make the calculations simpler and quick. Presentation was shifted from paper based presentation to soft copy presentation which required little time to make and edit the changes. New software was developed to cope up with the requirements as new standards of ac counting came into play and the level on complexity was increased. Both accountants and auditors started relying on the information technology far more than the paper work as it gave them time and cost saving and thus a new era on information technology was introduced in the field of accounting as well as that of auditing. CURRENT STATE OF INFORMATION TECHNOLOGY IN ACCOUNTING The current state of information technology in the field of accounting is very diversified and wide as the companies and information technology agencies have developed several ways of countering the needs and requirements of today’s fighting era. As the information technology has grown up in today’s era, it has persuaded the managers to implement it in their companies to manage their duties and responsibilities in a more appropriate and designed manner. The current state of accounting involves the use of following accounting software and techniques: Database management systems Spreadsheets Audit t echnique software Word processing and graphic presentations Tax assessment software Decision support systems Inventory and sales management systems Data evaluation and management software etc These are the major software that is implemented today in the field of accounting and management which have given this era of advancement a new dimension. The new era of accounting has also given rise to the in-house development of software and the companies have started their own software houses in