Technological Advances: The Accounting Profession’s Obligation to Stay Informed

By Jennifer A. Moore

As the Internet has evolved, businesses have altered their traditional structures and now are able to offer web-based products and services. New technology has given businesses the ability to internetwork, creating wireless channels of electronic transactions as a result. The accounting profession should take steps to better understand emerging technologies that impact the business community. The profession also should utilize this information as a tool that aids the accounting industry in providing objective analysis and reliable data.

Information technology is becoming increasingly complicated due to the many demands placed upon it by society at large; however, a critical aspect of business is to leverage technological change in order to maintain a competitive advantage in the marketplace. There have been instances where businesses have hesitated to implement new technology because of concerns related to issues such as information integrity and security. This hesitation stems from the knowledge that technology can be both beneficial and detrimental to an organization’s future. Because of this dual potential, the accounting profession should be knowledgeable of the economic feasibility, as well as associated risks, of emerging technology.

Surfacing technologies are able to increase the accountant’s understanding of a client’s business structure. This understanding can strengthen the application of functions such as auditing. Moreover, auditing, using real-time data, as opposed to the traditional point-in-time focus, can be structured in a way that improves the understanding of business operations. Technology also can assist in areas such as forensics, in which technical knowledge is crucial to understanding both the relation and application of a given business system. Thus, emerging technologies can be viewed in the accounting profession as both a source and a tool of information.

Emerging technology should be examined, acknowledged and utilized by the accounting profession to help facilitate the continued accuracy and reliability of financial statements. It also should serve as an information source for explaining the overlapping business structures in today’s world. New technology can provide countless benefits for the accounting profession, but the CPA who wishes to use it for business transactions must be willing to stay abreast of advancing technology to properly assess the associated risks and advantages of its implementation.

If you would like more information on this topic, look for these publications: The Innovator’s Dilemma by Clayton Christensen, Harvard Business School Press, 1997, and Intangibles: Management, Measurement, and Reporting by Baruch Lev, Brookings Institute, 2001.