Implementing Changing Technologies In Accounting And Finance Sector
Abstract
An increase in Information Technology has opened new doors of opportunity in the business management. Also, the systems are accurate and help the top management in strategic decision making. Policymakers use cloud computing system to evaluate different techniques of finance and accounting. The accounting system has proven to be integrated with the traditional method of accounting. The competition in the business environment has increased and therefore helped in strategic planning. Secondary data was used o analyze finance technology on organizational performance. The result of the research is that the implementation of finance technology has a significant impact on the organizational performance
Background
Finance systems measure the numbers and transactions of organizations. The performance of the firm is measured through the transactions like sales, purchases, assets, and liabilities. These systems help organizations evaluate the past information, present condition, and forecast the future. As per Ghasemi, et al. (2011) the definition of accounting is the idea to classify, summarize, and record in form of money. Information technology has changed the way processes work in an accounting system thereby the financial and accounting system has been adopting technological changes. Audit and knowledge sharing are two fundamental keys of accounting.
The growth of information technology has modified the way accounting works. Software automates the traditional ledgers and processes of financial management. Companies choose accounting packages according to their size and the number of employees using the system. Large corporation choose larger network that is interconnected with several different departments within the organization ( Taiwo, 2016). Information technology has proved to be significantly efficient in the finance department. With shorter lead time, the reports generated are accurate and efficient.
The technological implication has transformed the accounting system and organizational performance (Francis, 2013). The decisions of accounts and finance departments need to be made after keeping in view the information and communication technology. The decisions made through the systems are relevant and competitive to stay on top of the other companies. Accounting information is provided in a timely manner and enables to make analysis accurately. Growth and survival in the business market is today a challenge. However, Information and communication technology plays an integral role and help sustain the business (Ali, Abbas & Reza, 2013). According to a study, Gartner (2010) states that even when the world witnessed slowdown in the year 2009, the It industry’s spending reached $3,4trillion in 2010. The industry will see more changes in the future and the processes will see continuous updates in the processes (Keller & Gracht, 2014).
Research Questions
While conducting the research there were certain aspects of the study that needed to be focused upon. The questions that were generated for better understanding the implication of information technology in accounting and finance. The research questions are:
- What are the technologies and tool used in process of accounting and finance?
- What impact doe technology has on the accounting and finance processes and how does it affect the productivity?
- Does technological implementation improve the quality of output?
Research Objectives
To meet the criteria of the research there is a need to define aims and objectives of the research. The objectives are as follows:
- To study the impact of technology in the finance and accounting sector.
- To assess the advantage of technology in finance processes.
- To recognize challenges while implementing finance related technology.
Literature Review
Fordham & Hamilton (2019) investigated about “Accounting Information Technology in Small Businesses“. As per their study, that small businesses adopted computerized accounting system for accuracy. 90% of the small businesses are using general software rather than specialized integrated systems. The study suggests that owners should explore and work on integrating changes in their software.
Taiwo (2016) explored the effects of information and communication technology (ICT) on accounting information systems and organizational performance. The research concluded that ICT boosts the performance of the organization and creates reliable accounting information. Further, the positive impact of the ICT can only be seen if it’s implemented and adopted accurately. The study uses secondary data along with Pearson’s correlation and SPSS. A sample size of 20 people was taken. The results indicated a positive significance between ICT systems and organizational performance.
Clancy & Collins (2013) inquired about “CAPITAL BUDGETING “. The aim of the study was to analyze the changes in the recent years. The secondary method of data collection was used in which 110 studies were evaluated. The research implicated that the size has an impact on the financial reporting quality. Also, the result of the research presented that the structure of the organization and performance measurement can deform finances. Additionally, personal differences between employees can influence decisions.
The impact of Information Technology on modern accounting systems is a paper studied by Ghasemi, et al. (2011). The study reviews the effects o information technology on the finance department. However, the study states that the main impact is to keep track of the records and maintain a database of financial transactions. The paper has inquired about aspects of IT and concluded that it saves time for the accountants. Individual reports are created and available quickly for decision making to the top management.
Lim (2013) inquired about the impact of Information Technology on accounting systems. In today’s world, information systems have occupied great interest among business owners. The paper discusses aspects of accounting and its processes. Finance is a crucial factor in business and improves the speed and accuracy. Information technology adapts to new changes and helps the company evolve with time.
Watts, et al. (2014) studied about a newly implemented modern management accounting system in a manufacturing firm. Contemporary accounting systems acknowledged is TQM, BSC, and JIT. The research plans to determine the usefulness and relevance of the management system in the accounts department. An interview was conducted with accounting and finance professionals in a multi-national manufacturing firm that recently implemented a new system. The results of the study showed some elements in the system were deactivated because of its irrelevance. However, relevance has a connection with implementation. Planning and training are crucial elements when implementing management systems.
Zhang & Yang (2019) researched about Financial Technology. In the study, the finance technology proved to create a way t reduce poverty. The study is for economical development. Concept and technological innovation are of great importance. Therefore, the findings of the study are that there are many management systems that can help in financial development. Countries should personalize the systems as per their own economic requirements.
Prawirasasra (2018) studied about the financial technology in Indonesia. Information technology and financial services when combined together form financial technology. Companies use the technology for relevance and accuracy. Indonesia has seen an economic rise due to its shift in technology. The technological progress has guided them towards successful financial practices. However, the shift has created new challenges. Hence, the financial technology has been upgrading itself and reducing risks from the environment.
Treleaven et al. (2019) studied the block chain technology in finance. The model explains that the blocks help better transactions and gives support to financial services in an organization. Furthermore, the new technology can be challenging as it has an enormous impact on the way finance work in the system. The evolving enormous change will help develop a transform the accounting system.
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