A STUDY ON IMPORTANCE OF INFORMATION

TECHNOLOGY IN ACCOUNTING SYSTEM

A Project Submitted to
University of Mumbai for partial completion of the degree of
Bachelor in Commerce (Accounting and Finance)
Under the Faculty of Commerce

By
“Unmesh Santosh Bendal”
Roll No. 06

Under the Guidance of

‟PROF. MAHESH VAISHYA”

N. G ACHARYA & D. K MARATHE COLLEGE OF ARTS, SCIENCE AND

COMMERCE
Affiliated to university of Mumbai
CHEMBUR, MUMBAI - 400 071
YEAR – 2022-2023

1
 ACKNOWLEDGEMENT

I would first thank to UNIVERSITY OF MUMBAI‟ for Introducing the BAF

course thereby giving us a platform to conduct this study that has helped us to gain
practical knowledge about the course.

I would like to extend my thanks to our principle DR. VIDYAGAURI LELE & vice Principal

MRS.AKHILA MAHESHWARI‟ for their constant efforts to conduct this course smoothly.

I would also like to extend my heartfelt thanks to the course Co-Ordinator, my parents,
and librarian & friends for their constant support & encouragement.
 Certificate

This is to certify that Unmesh Santosh Bendal has worked and duly completed his / her project work for the
degree of BACHELOR IN ACCOUNTING & FINANCE and his / her project is entitled, ―A STUDY ON
IMPORTANCE OF INFORMATION TECHNOLOGY IN ACCOUNITNG SYSTEM‖ Under my
supervision.

I further certify that the entire work has been done by the learner under my guidance and that no part of it
has been submitted previously for any degree or diploma of any university.
It is his / her own work and facts reported by his/her personal findings and investigations.

Signature of the External Guiding Teacher

Date of submission:
 Declaration by learner

I undersigned “Unmesh Santosh Bendal” here by, declare that the work embodied in this project work A
Study on Importance of Information Technology in Accounting System‖ Forms my owns contribution to
the research work carried out the guidance of Prof. Mahesh Vaishya‖ is a result of my own research work
has not been previously submitted to any other university for any other degree / diploma to this or any other
university.

Wherever reference has been made to previous works of others, it has been clearly indicated as such and
included in the bibliography.

I hereby further declare that all information of this document has been obtained and presented in accordance
with academic rules and ethical conduct.

Certified by

Asst. Prof Candidate Signature

 INDEX

SR TITLE OF THE PAGE

NO. CHAPTER NO.

1 CHAPTER – 1 7-39
1.1 Introduction 7
1.2 History of Computerized Accounting System Technology 12
1.3 Current state of computerized accounting system technology 14
1.4 Future of accounting system 16
1.5 Types of accounting system 17
1.6 Types of technology used by accounting business 20
1.7 Impact of IT on Modern Accounting System 25
1.8 The Role of IT in Accounting 28
1.9 Advantage of Using Computerized Accounting System 29
1.1 Disadvantage of Using Computerized Accounting System 31
1.11 Objective of Using Computerized accounting system 39
2 CHAPTER – 2 40-44
2.1 Objective of the Study 41
2.2 Scope of the Study 42
2.3 Limitation of the study 43
2.4 Sources of data 44

3 CHAPTER – 3 45-50
Literature of Review 46
4 CHAPER – 4 51-62
Data analysis, Interpretation and Presentation 52
5 CHAPTER – 5 63-70
Finding 8
64
Bibliography 69
 INTRODUCTION

1.1 INTRODUCTION

1.2 HISTORY OF COMPUTERIZED ACCOUNTING SYSTEMS TECHNOLOGIES

1.3 CURRENT STATE OF COMPUTERIZED ACCOUNTING SYSTEMS TECHNOLOGIES

1.4 FEATURES OF ACCOUNTNG SYSTEM.

1.5 TYPES OF ACCOUNTNG SYSTEMS

1.6 TYPES OF TECHNOLOGY USED BY ACCOUNTING BUSINESS

1.7 IMPACT OF IT ON MODERN ACCOUNTING SYSTEMS

1.8 THE ROLE OF IT IN ACCOUNTING

1.9 ADVANTAGES OF USING COMPUTERIZED ACCOUNTING SYSTEMS

1.10 DISADVANTAGES OF USING COMPUTERIZED ACCOUNTING SYSTEMS

1.11 OBJECTIVE OF USING COMPUTERIZED ACCOUNTING SYSTEMS

 1. Chapter 1
1.1. Introduction

Accounting is the system a company uses to measure its financial performance by noting and classifying all
the transactions like sales, purchases, assets, and liabilities in a manner that adheres to certain accepted
standard formats. It helps to evaluate a Company's past performance, present condition, and future prospects.
A more formal definition of accounting is the art of recording, classifying, and summarizing in a significant
manner and in terms of money, transactions and events which are, In part at least, of a financial character
and interpreting the results thereof. Advances in information technology (IT) have transformed many firms
in professional services Industries, but perhaps none as much as those in the public accounting industry.
Once a slow-paced and conservative industry, public accounting underwent tremendous changes at the turn
of the millennium, sparked largely by the rapid changes in its if environment (Elliott 1998). Audit software
and knowledge-sharing applications are two crucial components of these changes. Automation of audit tasks
and use of specialized audit software has substituted IT for labour and changed the structure of audit teams
Equally important is the use of advanced systems to share knowledge bases across different parts of the
organization that has cabled professional services firms to leverage their human resources more effectively
(Gogan CT al. 1995).
 What is accounting?

Accounting can be described as a way of estimating and recording a substance's money inflows and
outpourings. Accountants spend a lot of their time breaking down substantial arrangements of financial
information. A large number of people who have no accounting foundation are the ones meant to understand
this information.

Accounting Meets Information Technology

Data innovation accounting incorporates conventional accounting standards with programming and data
frameworks to make a brought together area for putting away a substance's money related information. This
digitization additionally streamlines the way towards investigating any such information, enabling one to
distinguish and revise blunders or wasteful aspects of their money-related systems.

Information Technology (IT): - is the area of managing technology and spans wide variety of areas that
include but are not limited to things such as processes, computer software, information systems, computer
hardware, programming languages, and data constructs. In short, anything that renders data, information or
perceived knowledge in any visual format whatsoever, via any multimedia distribution mechanism, is
considered part of the domain space known as Information Technology (IT). IT professionals perform a
variety of functions (IT Disciplines/Competencies) that range from installing applications to designing
complex computer networks and information databases. A few of the duties that IT professionals perform
may include data management, networking, engineering computer hardware, database and software design,
as well as management and administration of entire systems, Information technology is starting to spread
farther than the conventional personal computer and network technology, and more into integrations of
other technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing
the demand for such jobs.

The Influence of Information Technology on Accounting Computers

Computers, servers, the Internet, wireless and personal digital devices have forever transformed the way
companies conduct business. Software packages have also improved traditional operations and production
processes. Accounting has seen tremendous advancements thanks to the growth of information technology.
Accounting software automates the traditional paper ledgers and accounting books. These software
packages may come with a variety of specialized features or a generic program that can be customized to
current business operations. Companies usually choose accounting programs based on the size of their
operations and the number of users accessing the system. Large companies may choose system-wide
software packages, such as an enterprise resource planning system. Information technology (IT) has created
significant benefits for accounting departments. IT networks and computer systems have shortened the le ad
time needed by accountants to prepare and present financial information to management and stakeholders.
Not only has IT shortened the lead time required to present financial information, but it also has improved
the overall efficiency and accuracy of the information.

1.Computerized Accounting Systems: - The biggest impact IT has made on accounting is the ability of
companies to develop and use computerized systems to track and record financial transactions. Paper
ledgers, manual spread sheets and hand-written financial statements have all been translated into computer
systems that can quickly present individual transactions into financial reports, most of the popular
accounting systems can also be tailored to specific industries or companies. This allows companies to create
individual reports quickly and easily for management decision making. Other advantages of computerized
accounting systems can be summarized as follows:

1.1 Increased Functionality: Computerized accounting systems have also improved the functionality of
accounting departments by increasing the timeliness of accounting information. By improving the timeliness of
financial information, accountants can prepare reports and operations analyses that give management an
accurate picture of current operations. The number of financial reports has also been improved by computerized
systems; cash flow statements, departmental profit and loss, and market share reports are now more accessible
with computerized systems.
1.2 Faster Processing: - Computerized accounting systems allow accountants to process large amounts of
financial information and process it quickly through the accounting system. Quicker processing times for
individual transactions has also lessened the amount of time needed to close out each accounting period.
Month- or year-end closing periods can be especially taxing on accounting departments, resulting in longer
hours and higher labour expense. Shortening this time period aids companies in cost control, which
increases overall company efficiency.
1.3 Better External Reporting: Reports issued to outside investors and stakeholders have been improved by
computerized accounting systems. Improved reporting allows investors to determine if a company is a good
investment for growth opportunities and has the potential to be a high- value company. Companies can utilize these
investors for equity financing, which they use for expanding.
1.4 Software Tools in the Accounting Process: Up-to date accountants must be familiar with the software

tools to help them perform the accounting functions more effectively and efficiently.
Accounting software contains the basic accounting functions such as input, processing and output. There are
two classifications of accounting software as low-end and high-end. Low-end is all-in-one software, which
means all of the functions of accounting system are performed within one software. Therefore, low-end
software is used for small companies.

Income tax: Because tax laws are frequently changing, it is becoming exceedingly difficult to deal with
them. Therefore, manual tax preparation is becoming more and more difficult and time consuming.
Fortunately, tax preparation software is currently available for companies. Therefore, instead of processing
tax manually, companies can use computer software to perform the same functions. As a result, even
complex calculations can be performed via computers in a short period of time.

Audit: Information technology has also computerized the auditing profession. If auditors perform auditing
functions manually, it takes time. However, audit software packages are currently available for auditors. For
example, trial balance software enables auditors to input the working trial balance, handle all types of
adjusting entries, and automatically compute the adjusted trial balance.

Word processing: Word processing is computer-assisted creation, editing, correcting, manipulation, storage,
and printing of textual data (Romney et al., 1997: 246). Accountants use word processing software to
prepare reports, billings, memos, and financial statements.

Graphics software: Graphics can be prepared using graphics software. Graphics can be printed on paper or
displayed on slides, transparencies, and photos. Many auditors and managerial accountants use the graphics
software to graph the data in financial statements and reports.

Image processing: Creating, storing, and updating paper forms of documents take time. In addition, it is very
costly to process and store documents. Fortunately, these costs can be eliminated with the help of document
imaging systems. Image processing captures electronic image of data so that it can be stored and shared. With
the help of document imaging, accountants can scan paper documents into the computer and process all of the
files electronically. Companies that use document imaging are moving toward paperless offices.

Electronic data interchange (EDI): Electronic data interchange enables companies to communicate with
each other electronically. Therefore, EDI enables companies to exchange documents electronically with
each other. For example, computerized network enables purchaser and the supplier to exchange purchase
orders and invoices electronically in the form of images.
Electronic funds transfer (EFT): Companies can now connect to banks through EFT. This system enables
companies to make payment and collection electronically. In this case, when company wants to pay for accounts
payable to a supplier, it can do it via EFT. Furthermore, whenever company makes sales, transactions are
immediately charged to consumer‘s bank account and simultaneously credited to company‘s account. In
addition, all relevant accounts such as accounts receivable and cash are updated immediately by the
computerized system. The use of the computerized systems mentioned above has led to the automation of
accounting information system. Accounting information systems equipped with these kinds of technologically
advanced tools can now perform accounting functions more effectively and reduce costs.

Accounting programs or software can help accountants or business owners create sales forecasts, economic
business models and other business decision tools. They will also automatically input the business' financial
information, limiting the number of human data entry errors. Standard defaults and mathematical
verification processes are additionally important features of accounting software. These processes ensure
that the company's accounting books are always in balance and do not violate any pre-set requirements.
Small business accounting software packages are usually basic programs created with the non-accountant in
mind. This allows owners and managers to complete traditional accounting functions without much formal
training or technical knowledge. Small business owners may also be able to transfer this information
electronically to their public accountant for tax purposes. Electronically transferring information is usually
more accurate and timely than handing over a stack of manual accounting ledgers.
 1.2. History of computerized accounting system technologies

Till 1970th-80th the most common used system in accounting was ―general ledger‖. It was a book with assigned
pages for each account, such as cash, receivables, payables, stockholder equity. Everyday transactions were
entered by hand into a journal. After each transaction entry had to be posted in a proper general ledger account on
the assigned page (Hous). Next step was an input of the numbers from general ledger into financial statements
and preparing tax returns. All these processes where inefficient, slow, and manual. Even a minor mistake or
inaccuracy in these processes led to long time spent for recalculations (Hous).

Through the 20th century developments in computing, data modelling, and telecommunications influenced
accounting processes significantly. The first mention of the term ―systems‖ regarding accounting emerged
in the 1920‘s and was used widely in mass-media. At the same time many scholars considered that
development of computerized accounting systems technologies had begun even earlier. For example in
1890s, to meet needs of cost accounting, calculating machines, such as Hollerith device, were created
(Badua, Watkins 3). According to Badua and Watkins, some inventions went even in reverse directions
when particular area of accounting facilitated the creation of specialized machines or technology (3).

Invention of accounting software revolutionized accounting processes. Multiple developments forerun

present-day technologies. A countess Ada Lovelace computing machine was the first machine created and
used for accounting. The IBM 9Pac was one of the first programming systems that preceded the invention of
many modern accounting systems (Novinson). SAP software was created in 1973 and provided opportunities
not only for automated financial transactions but also for supported executive decision making. Before the
invention of Peachtree program, all accounting computerized programs were unavailable for broad public.
Peachtree was the first program sold in stores and accessible for everyone (Novinson).

In 1983 company Intuit introduced a computerized computing program for personal finance Quicken. After
that TurboTax for calculation of federal and income taxes and QuickBooks for small business accounting
purposes were presented to wide public (Novinson). At this point of the development of accounting
technologies manual journal entries were left in the past and computer technologies made profession of
accountant easier. Accounting software gave an opportunity to professional accountants to do their job faster
and more productive. At the same time owners of small businesses, who had limited knowledge in
accounting area, could keep their finance statements in order to use accounting software (Hous).
The last decade of 20th century brought significant changes to data communication. It became faster, more
reliable, and less expensive. The client/server applications in a ―hosted‖ environment became popular
among technology manufacturers and suppliers. This kind of model allowed a firm to operate complex
accounting systems with just a little investment. The model also gave way to the on demand Software as a
Service (SaaS) financial systems. SaaS application is designed in such a way that it allows user to work with
rich accounting application through a thin client web browser (Accounting).

For larger firms, it may be beneficial to hire someone specifically tasked with supporting the firm’s IT
infrastructure and related accounting information technology. Or it may be more cost-effective to outsource
this position from an IT staffing firm. Yet another alternative is to rely more heavily on your accounting
technology provider as many provide round-the-clock assistance, as well as personalized on boarding and
training. As you contemplate tech staff, it is important to note that a significant portion of today’s accounting
curriculum is dedicated to teaching aspiring accountants how to use current technology. And many graduates
are likely looking forward to learning even more advanced technology on the job.

That said, entry level or new hire staff may be eager to learn and take on an additional role in supporting IT
activities. It also may be beneficial to look outside of the box. Recent college grads with skills or majors
related to analyzing and using data are often a great fit for firms that use advanced technology. Consider
candidates from non-accounting backgrounds including science, technology, engineering, and math (STEM)
degrees. Given the digital disruption taking place in the profession, evolving the recruitment process can
give your firm new ways to thrive. At the end of the day, accounting information technology provides a
foundation for what prospective employees want—more high-value work, flexible working arrangements,
increased productivity, and support to grow their skills.

The use of APIs in accounting automation is critical in creating a custom solution tailored to your firm’s
unique compliance processes. Open API connectors can easily integrate with third party vendors, so the
ways in which your firm uses APIs depends on your workflow. APIs increase efficiency and reduce
redundancy by enabling disparate systems to work together to compare data sets. This helps reduce
redundancy in workflow processes and facilitate automation, which saves a significant amount of time. And
once you’ve solved your disconnected workflow issues, you’ll enjoy the ability to collaborate without
version control issues, pass data seamlessly between platforms, and shift your focus to more value-added
work. Financial accounting is another common course requirement for a major in accounting.
This course is also typically taught in two semesters and covers more theoretical aspects of accounting. In
particular, the course introduces students to the concept of annuities and present value, depreciation and
depletion, and intangible assets. Degree programs require students who major in accounting to understand
these concepts well so that they can develop proper understanding of accounting processes and procedures.
Other common topics covered in this course include stockholders’ equity, equity method, revenue.

Requirements vary greatly across degree programs and universities, but many require students who major in
accounting to complete an accounting internship. An accounting internship, also known as a residency, asks
students to work for a real accounting firm for some period of time. The aim of the internship is to give
students hands-on experience doing accounting and the opportunity to apply what they have learned in their
major to real-life situations. This internship is typically completed in the last semester of the program.One of
the core requirements of any bachelor' degree program in accounting is a principles of accounting course.
This course is typically divided into two semester-long courses that introduce students to different aspects of
accounting and accounting procedures. In addition to teaching students introductory financial and managerial
accounting concepts, it also covers topics such as recognition and creation of accounting information.

What Is The Role And Impact Of Technology On The Accounting Process? Accounting was once done by
hand but now technology has made it possible and also very easy to record information in real-time, collect
and compile information from various sources and also automate repetitive tasks. This allows the
professionals to focus more on other important tasks like giving financial advice and monitoring the
performance. IT has also helped industries and companies reduce errors and make better financial decisions.
Technology has impacted the accounting field in more than one ways- Accessibility Of Accounting Data Has
Improved A Lot With the use of technologies like cloud accounting services, any authorised user can access
the information required from anywhere they have internet. This saves the time of an accountant physically
downloading files and sharing it with other users. These services can also be accessed from the mobile.
Accounting is the system a company uses to measure its financial performance by noting and classifying all
the transactions like sales, purchases, assets, and liabilities in a manner that adheres to certain accepted
standard formats. It helps to evaluate a Company’s past performance, present condition, and future prospects.
A more formal definition of accounting is the art of recording, classifying, and summarizing in a significant
manner and in terms of money, transactions and events which are, in part at least, of a financial character and
interpreting the results thereof. Advances in information technology (IT) have transformed many firms in
professional services industries, but perhaps none as much as those in the public accounting industry. Once a
slow-paced and conservative industry, public accounting underwent tremendous changes at the turn of the
millennium, sparked largely by the rapid changes in its if environment (Elliott 1998). Audit software and
knowledge-sharing applications are two crucial components of these changes. Automation of audit tasks and
use of specialized audit software has substituted IT for labor and changed the structure of audit.
 1.3. Current state of Computerized Accounting Systems Technologies

Today accounting Information system integrated into business Information systems of a company. As soon
as accounting information system provides information necessary for internal and external reports, it
becomes a vital component of decision-making process (Knievel 64). Internet technologies play an
important role in the development and implementation of accounting systems as well. Internet facilitates
direct transactions between customers, suppliers and businesses (Maracas 310). It is also important that a
present day accounting system has to be adopted not only to fast changes in technologies, but also to
accelerate changes in accounting standards (Arnold, Brizard, and Duggan 37).

Accounting technologies are important not only for big companies but them also vital for small businesses.
Nowadays among the most popular accounting software for small businesses the following computer
programs can be mentioned: Multitier Enterprise, NetSuite Financials, Intact Financials and Accounting
System, Microsoft Dynamics GP, SAP — Accounting, Sage 100 Standard and Advanced ERP, QuickBooks,
and etc. (Singleton). All these information technologies give a huge number of benefits to accountants.
Accounting technologies help to increase productivity, decrease input errors, make reporting faster, make
accounting information more valid and accurate, help to react on changes in economy faster, create
centralized accounting, and make the process of accounting available for non-professionals (Singleton).

There are several important factors that have to be taken into account in the process of selecting proper
accounting software: (l)ease of use; (2) help and support; (3) ability to manage core accounting tasks such as
accounts receivable, accounts payable, banking, payroll, inventory control, time and job costing, fixed assets;
(4) updates and, reporting. Most of the software programs provides core accounting services. But there are a
lot of differences that allow companies to select the software that suits their business's needs in the best way.
In case the company has its own specific needs and none of existing systems smut the company's purposes;
modern technologies allow customizing accounting software. The short overview of the main small business
accounting solutions will help to create a picture of diverse technologies in this area (singleton).

For example, NetSuite Financials and Intact Financials, and Accounting System provide Cloud-based
accounting software. In addition, NetSuite provides human-resource, customer marketing and inventory
management options. Microsoft Dynamics GP can be used not only as an accounting solution, but as an
enterprise resource planning system. EPCOR Financial Management provides ERP based on Cloud
technologies (singleton). SAP software is popular among large companies as long as it facilitates all wide
range of their needs. Sage 100 Standard and Advanced ERP can be recommended to manufactures and
distributors. Such software as Bill Quick adapted to be used with Android and Blackberry devices. Adaptive
Planning software focuses on budgeting, forecasting, and reporting and can be used by businesses of any
size (singleton).
 1.4. Future of Accounting System

Modern accounting systems and technology provide companies with the capability of gathering real-time
data for quantitative and qualitative analyses. A modern accounting system needs to include these essential
components:

● Automated, flexible processes for the analysis, management and presentation of financial
information according to instruction standards. Processes must also be customized to the needs of the
organization, with flexibility to accommodate future needs.

● Business insights that offer in-depth, real-time looks at activities, costs and profitability, enabling
decision-makers to change direction, if necessary, and to capitalize on new opportunities.

● Cloud-based systems typically integrate well with other software systems and provide the advantage
of being able to be accessed from anywhere.

As business technology advances, there undoubtedly will be improved systems for essential accounting
functions, such as accounts receivable and payable, financial close, project accounting and revenue
recognition and management. Ideally, a company's accounting system will integrate seamlessly with major
suppliers, streamlining processes such as purchasing, inventory control and just-in-time manufacturing. A
facility with technology will enable future accountants to help businesses and organizations make the best
use of resources and to plan efficiently for the future.
 1.5. Types of Accounting System

Accountants use accounting systems to manage an organization‘s financial activities, including income,
expenses and transactions. An accounting system helps accountants create financial reports that aid in a
business understanding and recording its financial information.

Specific components of an accounting system include:

● Accounts payable
● Billings
● Accounts receivable
● Fixed assets
● Inventory
● Payroll

When you create a streamlined accounting system for your business, you can improve your record-keeping,
organize your financial information and make better financial decisions for your business.

The two different types of accounting systems differ in how each transaction is recorded. In a single-entry
system, only one entry is recorded—either debit or credit. Double-entry accounting systems record both
debit and credit.

1. Double-entry accounting systems

In double-entry accounting systems, every accounting entry has a corresponding entry in another account.
Many businesses choose to use double-entry accounting because it can improve data accuracy. Accounting
software can help to properly manage double-entry accounting systems.

Benefits of double-entry accounting systems include:

● They‘re easier to spot and fix data errors and gauge profit and loss
● Reduced risk of fraud and increased fraud detection
● Simplified financial statement creation
2. Single-entry accounting systems
Single-entry accounting systems differ from double-entry in that they involve only one entry per transaction
instead of two entries in different accounts. Single-entry accounting systems often do not require software,
and can be done on simple paper or computerized spread-sheets.

Although many businesses choose double-entry accounting to reduce the risk of data errors, benefits of
single-entry accounting systems include:
● Simplified accounting processes with information in a single spread-sheet
● Bookkeeping process ownership for small businesses
Software vs. manual accounting system methods

Each accounting system type has different benefits and is best suited for different businesses. The two ways
accounting systems are structured are software versus manual.

Accounting software
Many business use accounting software, or computerized accounting systems, to process financial
information. Different types of accounting software offer various features, and you can typically customize
them with add-on options.

Using accounting software has many benefits, including:

● Reduced time on manual accounting
● Reduced risk of data errors
● Real-time data
● Automated business and accounting processes

The right software combines the features you need for your business, which may include
automated processes, cloud services and integration with other productivity applications.

Examples of accounting software options include:

● FreshBooks
● Intuit QuickBooks
● GoDaddy Bookkeeping
● Zoho Books
● Xero

Manual accounting system

You can also use a manual accounting system. Unlike a computerized accounting system that uses accounting
software, a manual accounting system involves maintaining accounts by hand, using physical books and
registers. Some small businesses may use manual accounting systems because of their lower costs.

Some of the key benefits of using a manual accounting system include:

● Saved money on accounting system set-up
● Reduced risk of data loss or corruption
 1.6. Types of Technologies used by Accounting Business

Accounting technology has always played a role in making the accountant‘s life that little bit easier. It‘s one
of those professions that involve a lot of numbers, paper, and thinking. However, technology has enabled
accounting firms to take their pursuits to the next level with enhanced analytics and more effective data
interpretation.

In today‘s age of digital transformation, we‘re all pretty used to technology rapidly advancing right before our
eyes. It‘s essential for accounting professionals to be familiar with the biggest trends in accounting technology.

From cloud-based communications solutions to mobile accounting, leveraging the power of such technology
can not only boost productivity and efficiency, but streamline the entire process of corporate finance
management.

Top 8 Essential technologies for Accounting Business

1. Cloud-based communication platforms

Cloud-based communication platforms allow for not only a better way of communicating with clients, but
also a less clunky way to store and access an ever-growing amount of data online in ―the cloud.‖ The cloud
is essentially what allows you to work from anywhere.

2. Block chain
Block chain is a technology that‘s rapidly gaining traction in the accounting business. If you know how to
use it, it can be a powerful tool to help you stand out among your competitors.

Block chain refers to the distribution and decentralization of database technology and protects encrypted
data while recording and adding transactions to participants‘ ledgers.

Contemporary accounting functions via a double-entry bookkeeping system, where the accountant and
auditor manually input and verify a company‘s transactional history. When more than one party is involved
in a transaction, and all keep their own records, the process becomes convoluted and inefficient, often
resulting in disparities between records.
Block chain technology mitigates these issues, as the data can be verified without another party‘s
involvement. It allows complete and automated auditing for each and every transaction in a shared ledger.
That‘s even as individual accountants, auditors, and companies keep their own records in a private database.

3. Automation and machine learning

As the business world grapples to balance employee expectations with artificial intelligence, it‘s the right
moment for CFAs to consider how the two can work alongside each other to streamline business operations.
Accounting is moving towards being codeless, which means that soon enough, time-consuming data-entry
tasks will be redundant.

Accounting automation systems make accountants‘ lives much more efficient. With manual task automation,
businesses can cut down time spent on manual data entry and let machines handle the number crunching and
transaction handling. Not only does this mean more productive employees, but it also results in cost-savings
and reduces the possibility for human error.

Where some might see automation as a threat to the accounting profession, we consider it to be role-
redefining. When balancing humans and machines, it‘s important to consider the lucrative potential of
artificial intelligence and machine learning in automating common tasks like tax preparation, auditing, and
payroll. Then, to imagine where all that extra time can go.

CPAs can use the latest automation technologies to streamline accounting processes, so they can spend more
time analysing, strategizing, and making human connections.

4. Financial forecasting
Financial forecasting is about looking to the future to predict financial outcomes using data gleaned from
past results and expected non-financial factors. The forecast enables accounting firms to better understand
where they‘re likely to be at a certain time down the line. But why are predictive analytics and financial
forecasting important?

Depending on the scale of your business, financial forecasting can provide valuable insights into whether
you‘re on track to achieving your business goals. It can identify trends in internal and external data to inform
data-driven decisions regarding the business‘s financial future.
5. Client relationship management software programs

A client relationship management solution is an essential technology for accounting firms to organize
customer data in one place. By combining CRM apps with accounting software, businesses can maximize
productivity and efficiency by centrally storing accounting information that can be accessed instantly.

When it comes to choosing the right CRM for your accounting firm, integrations with the rest of your tech
stack are imperative. The data from your CRM can be used to inform strategies and customer interactions
across multiple departments, from sales and marketing to customer support. What‘s more, it should be
intuitive and easy to use.

Integrating your CRM (like HubSpot or Salesforce) is simple with RingCentral. It‘ll let you use customer
data to your advantage by ensuring you‘re are always armed with the client information you need to
effectively communicate and manage their finances

6. Enterprise resource planning (ERP) systems

ERP system software is used by organizations to manage day-to-day activities such as accounting, risk
management, project management, and supply chain operations. Managing everything from financial reports
to travel expenses can lead to chaos in an accounting firm, if not done properly.

With an ERP system, accounting firms can:

● Get an overall picture of clients through a unified system
● Easily create reports and analyses
● Automate manual processes with AI and machine learning
● Stay in touch with clients and access the same database via the cloud

By staying connected across teams, accounting departments can dig deeper into company performance to
provide fresh insights to clients and make better, data-driven decisions to grow as a business.

7. Social media

In today‘s digitally connected world, clients expect to interact and engage with businesses across multiple
touch points. Accounting firms aren‘t exempt from those expectations. Social media is one such touch point
that has become essential for firms that want to engage with current and potential clients while expanding
their audience.
Social media is a tool that provides those in the accounting profession with a powerful sales and marketing
platform to connect them with potential clients. Marketing is just as important to accounting firms as it is to
any other industry, after all.

Integrating an effective social media strategy into an accounting firm‘s long-term overall marketing
strategies can impact business development, generate client leads, and amplify business growth and
communication among a digital audience.

To remain competitive, accounting firms must leverage the power of social media to achieve business goals
by reaching audiences on diverse platforms. Whether you‘re seeking to increase the visibility of your newly
established firm or boost brand awareness, social media is a powerful platform for reaching a massive
audience. What‘s more, social media can:

Help you to achieve better search rankings and boost organic reach
Identify industry trends to better understand your client‘s expectations and
competitors Humanize your firm
With RingCentral, all of your business communications and customer interactions are stored in the cloud.
What‘s more, social media integrations ensure seamless management and provide valuable data insights.

8. Mobile accounting
As a business in today‘s world, you won‘t get anywhere without adapting to mobile. Accountants are becoming
increasingly reliant on mobile devices to access and share data in real time from remote locations. Mobile
connectivity is pivotal for bridging the gap between accounts and clients, and managing operations on the go.

With RingCentral and the necessary software integrations, firms can manage and share data, update
tax information, interact with clients, and conduct meetings from a mobile device.

Whether you‘re traveling for work with a tablet or working from anywhere on your smartphone, mobile
accounting is made possible with a cloud-based solution. With the right solution, it‘s possible to handle
finances from anywhere.

This mobility and flexibility give CFOs the real-time information they need to stay on top of financial
matters and stay in touch with clients whenever, wherever.
Whether you‘re an accountant for a small business, the CFO of a successful accounting firm, or a student
completing a bachelor‘s degree in accounting, you must stay on top of technology trends and advances.

There‘s a reason why powerful businesses aren‘t managing their accounts with a calculator and pencil in
hand: it takes way too long! Embracing technology is the key to enhancing productivity, streamlining
communications, and remaining competitive in today‘s world.
 1.7. Impact of IT on Modern
Accounting System
1. Money Saving:

The application doesn‘t need to travel to the consulate two times, first time for collecting the application
form and for physical presentation. He needs to go to the consulate only once the application form would
have been filled online. The cost for travelling the first time is saved. Also the potential wastage of paper is
removed. Reducing paper consumption helps improve the quality of environment, reduce forest destruction
since paper is produced from wood and reduce of waste processing.
2. Time Saving:
The main time saving factor is the flexibility of scheduling when to engage on a process. For example a visa
application form can be filled when the applicant has a free time and not necessary during the opening hours
of the consulate. The data filled are verified immediately for validity. Acknowledge is sent immediately as
prove of application. Payment is made online with credit card thereby saving the time of passing through the
cashier.
3. Communication:
Communication by email is faster and costs less than sending a paper letter by post. The business
communication in various commercial organizations has widely accepted email as main medium for
information dissemination across platforms. Email systems not only carry out information in textual formats
rather provides the way to transmit multimedia information from customer to client and vice versa.
4. Global Financing:
Information technology allows finance to function on a global level. Financial markets can be thought of as
the first organized, global information markets operating through network computers. Without information
technology, financial markets could not react to global development and finance companies couldn‘t
consistently acquire information at the same time as their competitors. For example, the internet allows
continuous access to credit scores and credit rating to all lenders, insurance companies and businesses that
need financially responsible customers.
5. Economic Efficiencies:
Information technology resources can significantly reduce accounting costs. Redundant tasks can be centralized
in one location through the use of information technology infrastructure. Economic efficiencies can be realized
by migrating high-cost functions into an online environment. Companies can also offer email support for
customers that may have a lower cost than a live customer support call. Cost savings could also be
found through outsourcing opportunities, remote work options and lower-cost communication options.
6. Accuracy:
Information technology assists in the computations. Since accounting work is very detailed, accuracy in
recording and reporting is greatly valued. One of the positive effects of this system is the fact that it lessens
the possibility of incurring mathematical errors which is one of the problems experienced in the manual
system.

7. Improved Internal and External Reporting:

Because of the improved speed and accuracy in the processing of information, financial reports can be easily
generated and reported to internal and external users. External users can use these reports to assess the
condition of the entity. Internal user which is the management benefits from this development for they need
to know the details first in making economic decisions. On the impact of computer technology on
accounting, Nickelset al. observed that most companies have found that computers greatly simplify the task,
enabling managers and other employees to get financial reports exactly when they want them.

8. Flexibility:
Flexible technology is severely needed in accounting departments. The accounting system must have the
capability to adapt with changes in business practices. Information technology associated with accounting
creates flexibility to accommodate the changes. Some systems are capable for upgrade when the entity‘s
volume of transaction increases.

9. Reduction of Paper Usage:

The utilization of electronic envelops and documents reduce the usage of papers in accounting processes.
Thus, it reduces costs and of course it draws the entity away from the environmental issues regarding trees
and paper usage.

10. Graphics Software:

This software creates photos, graphs and charts from data input in order to facilitate better understanding of
the topic. This is usually used in financial reporting.

11. Increased Functionality:

Computerized accounting systems have also improved the functionality of accounting departments by
increasing the timeliness of accounting information. By improving the timeliness of financial information,
accountants can prepare reports and operations analyses that give management an accurate picture of current
operations. The number of financial reports has also been improved by computerized systems; cash flow
statements, departmental profit and loss, and market share reports are now more accessible with
computerized systems.

12. Faster Processing:

Computerized accounting systems allow accountants to process large amounts of financial information and
process it quickly through the accounting system. Quicker processing times for individual transactions has
also lessened the amount of time needed to close out each accounting period. Month- or year-end closing
periods can be especially taxing on accounting departments, resulting in longer hours and higher labour
expense. Shortening this time period aids companies in cost control, which increases overall company
efficiency.

13. Storing and Protecting Information:

Information technology creates electronic storage system to protect company‘s valuable records. According to
Graziadio Business Report, Published by Pepperdine University, secure maintenance of customer and patients
files is vital to business integrity, storage systems, such as vital vaults, keep information safe by only allowing
certain users within the company to access, withdraw, add or change the documents and protect from being
hacked, or wiped out during a technological disaster. Electronic security means your valuable records will remain
safe. You may already use computer for data storage for business, inventory, sales, receivables‘ and payable
stored in excel, and open office or a similar program keeps these figure at your fingertips. Accounting software
stores your payroll information, tax records and specialized data for your business.

14. Reliability:
Computer systems are immune to boredom, tiredness or fatigue. Therefore, these can perform repetitive
functions effectively and are highly reliable as compared to human beings.
 1.8. The Role of IT in Accounting

Information technology has impacted accounting processes in many ways.

The rapidly evolving relationship between accounting and information technology means accountants now need
to understand how technology impacts business, and how it can be used to improve operational efficiency,
achieve regulatory compliance, support financial reporting and management and even increase revenues. They
must also have an appreciation for how to capture and communicate technology needs for their business.

In short, the accountant of the present and future must be technologically savvy to be relevant, and
universities are preparing new graduates for this challenge.

Major Role of IT in Accounting

● To put information close to accountants.
● To improve the capacity of accounting research and extension specialists to organise, store,
retrieve and accounting information exchange.
● To evolve mechanism of information sharing.
● To develop accounting database for easy access and data base decision making.
● Access to the storehouse of information is easy.
● Accounting data will available universally.
● One accountant can deal with various companies through effective utilization of IT in accounting.
 1.9. Advantages of using computerized accounting software

Computerised accounting systems are a convenient way of recording, storing, analysing and reporting
financial information. At some stage, everyone will need to use this type of system to manage and submit
their accounts, i.e. tax returns. This is due to the government‘s plans for Making Tax Digital, which is now
set to roll out in 2019. HMRC are currently trialling systems to enable digital accounting processes, but there
are various systems already available, which businesses can start using to get ready for this mandatory
change. In this article, we explore the benefits of computerised accounting for businesses:

Reduce the time spent on manual processes:

Computerised accounting uses sophisticated software to automate manual accounting and bookkeeping
processes, such as complex calculations. For small to medium-sized businesses (SMEs), digital accounting will
save hours of time and resource by enabling you to manage your accounts in a fraction of the usual time.

Less errors and increased accuracy:

Digital accounting ensures all entered data is calculated precisely, which means you won‘t have to manually
check your accounts every time you or a member of staff inputs new data. This includes income, expenses,
transactional data, account reconciliation, period end adjustments, as well as stock and VAT.

Real-time financial information:

Computerised accounting systems are synchronised and aligned with your online bank account. This means
you will always have access to up-to-date information on whether invoices are being paid by your
customers, as well as your business outgoings.

Automated invoices, credit notes and receipts:

Many online accounting systems enable automated invoicing, crediting and receipting processes, which
means you will remove time spent creating manual invoices, credit notes and receipts. Some systems also
send chaser emails if debts have not been paid, which is a very useful tool for SMEs who usually do not
have adequate resources available for debt recovery.

Innovative financial technology:

Many computerised accounting systems are cloud-based, which means you can download apps for mobile
phones and tablets. This enables you to check your accounts at any time, no matter where you are in the world.
 Save money on resources:
By streamlining your accounting and bookkeeping processes by using a computerised system, you (or a
member of staff) won‘t need to spend as much time managing your financial information. This will lead to
cost-savings – many computerised accounting systems can be provided by way of an affordable monthly
subscription fee.

Faster record-keeping leads to more business:

Due to automated complex calculations, continual awareness of your finances, and less time spent on
processing and checking your accounts, you can spend more time focusing on your business operations and
increasing your profit margin.

Information Technology (IT)

IT is the area of managing technology and spans wide variety of areas that include but are not limited to things

such as processes, computer software, information systems, computer hardware, programming languages, and

data constructs. In short, anything that renders data, information or perceived knowledge in any visual format

whatsoever, via any multimedia distribution mechanism, is considered part of the domain space known as

Information Technology (IT). IT professionals perform a variety of functions (IT Disciplines/Competencies) that

range from installing applications to designing complex computer networks and information databases.

Computerized Accounting Systems

The biggest impact IT has made on accounting is the ability of companies to develop and use computerized

systems to track and record financial transactions. Paper ledgers, manual spreadsheets and hand-written financial

statements have all been translated into computer systems that can quickly present individual transactions into

financial reports. Most of the popular accounting systems can also be tailored to specific industries or companies.

This allows companies to create individual reports quickly and easily for management decision making. Other

advantages of computerized accounting systems can be summarized as follows:

Increased Functionality

Computerized accounting systems have also improved the functionality of accounting departments by increasing the

timeliness of accounting information. By improving the timeliness of financial information, accountants can prepare

reports and operations analyses that give management an accurate picture of current operations. The number of

financial reports has also been improved by computerized systems; cash flow statements, departmental profit and

loss, and market share reports are now more accessible with computerized systems.

Improved Accuracy

Most computerized accounting systems have internal check and balance measures to ensure that all transactions

and accounts are properly balanced before financial statements are prepared. Computerized systems will also

notallow journal entries to be out of balance when posting, ensuring that individual transactions are properly

recorded. Accuracy is also improved by limiting the number of accountants that have access to financial

information. Less access by accountants ensures that financial information is adjusted only by qualified

supervisors.

Faster Processing

Computerized accounting systems allow accountants to process large amounts of financial information and

process it quickly through the accounting system. Quicker processing times for individual transactions has also

lessened the amount of time needed to close out each accounting period. Month- or year-end closing periods

can be especially taxing on accounting departments, resulting in longer hours and higher labor expense.

Shortening this time period aids companies in cost control, which increases overall company efficiency.

Accounting software contains the basic accounting functions such as input, processing and output. There are

two classifications of accounting software as low-end and high-end. Low-end is all-in-one software, which means

all of the functions of accounting system are performed within one software. Therefore, low-end
software is used for small companies.

Income tax. Because tax laws are frequently changing, it is becoming exceedingly difficult to deal

with them.

Therefore, manual tax preparation is becoming more and more difficult and time consuming.

Fortunately, tax

preparation software is currently available for companies. Therefore, instead of processing tax manually,

comp can use computer software to perform the same functions. As a result, even complex calculations can

be performed via computers in a short period of time.

Audit. Information technology has also computerized the auditing profession. If auditors perform auditing

functions manually, it takes time. However, audit software packages are currently available for auditors. For

example, trial balance software enables auditors to input the working trial balance, handle all types of

adjusting entries, and automatically compute the adjusted trial balance.

Electronic funds transfer (EFT). Companies can now connect to banks through EFT. This system enables

companies to make payment and collection electronically. In this case, when company wants to pay for

accounts payable to a supplier, it can do it via EFT. Furthermore, whenever company makes sales,

transactions are immediately charged to consumer’s bank account and simultaneously credited to company’s

account. In addition, all relevant accounts such as accounts receivable and cash are updated immediately by

the computerized system. The use of the computerized systems mentioned above has led to the automation of

accounting information system. Accounting information systems equipped with these kinds of

technologically advanced tools can now perform accounting functions more effectively and reduce costs.

Accounting programs or software can help accountants or business owners create sales forecasts,

economic business models and other business decision tools.

 They will also automatically input the business' financial information, limiting the number of human data

entry errors. Standard defaults and mathematical verification processes are additionally important features

of accounting software. These processes ensure that the company's accounting books are always in balance

and do not violate any preset requirements. Small business accounting software packages are usually basic

programs created with the non-accountant in mind. This allows owners and managers to complete

traditional accounting functions without much formal training or technical knowledge. Small business

owners may also be able to transfer this information electronically to their public accountant for tax

purposes. Electronically transferring information is usually more accurate and timely than handing over a

stack of manual accounting ledgers.

Word processing. Word processing is computer-assisted creation, editing, correcting, manipulation, storage,

and printing of textual data (Romney et al., 1997: 246). Accountants use word processing software to prepare

reports, billings, memos, and financial statements.

Graphics software. Graphics can be prepared using graphics software. Graphics can be printed on paper or

displayed on slides, transparencies, and photos. Many auditors and managerial accountants use the graphics

software to graph the data in financial statements and reports.

 Disadvantages of Using Computerized accounting software

High Cost of Installation:

The cost of the Computer and its accessories are costly. Computer hardware requires lots of maintenance,
repair and software need subscription fees. After some time of purchasing a system, its new version comes
into the market and makes the old system become outdated.

Training Cost:
Operating a computer is not an easy task. A person needs to be well trained and skilled to use a computer.
Knowledge of accounting software is also necessary to do accounting.

Time-Consuming:
Once there is any default in the system it takes a lot of time and effort to restore the system.
Sometimes computers work slow due to weather and require air-conditioned room to work properly.

Maybe Hacked:
In today‘s era, it is easy to hack someone‘s security system. Viruses and Malware can be entered into the
system by hackers that cause danger to data. New generation computer comes with strong security it can
combat this problem.

Health Issues:
It puts a lot of strain on the eyes. Also excessive use of computers leads to muscular pain which results
in inefficiency and higher health expenses to the employees.
 1.10. Objective of Using Computerized Accounting System
The main objective for using computerized accounting system is because it‘s needs arises from the benefits
of speed, accuracy and lower cost of handling the business transactions. Also, it has the capability to record
a large number of transactions with speed and accuracy. It allows quick and quality reporting because of its
speed and accuracy.

Manual accounting system requires large storage to keep accounting records, and vouchers. The requirement
of books and stationery and books of accounts along with vouchers and documents is dependent on the
volume of transactions.

Labour Saving:
Labour saving is the main aim of introduction of computers in accounting. It refers to annual savings in
labour cost or increase in the volume of work handled by the existing staff.

Time Saving:
Savings in time is another object of computerization. Computers should be used whenever it is important to
save time. It is important that jobs should be completed in a specified time such as the preparation of pay
rolls and statement of accounts. Time so saved by using computers may be used for other jobs.

Minimization of Frauds:
Computer is mainly installed to minimize the chances of frauds committed by the employees, especially in
maintaining the books of accounts and handling cash.

Effect on Personnel:
Computer relieves the manual work, reduces the hardness of work and tiredness, and to that extent improves
the morale of the employees.

Accuracy:
Accuracy in accounting statements and books of accounts is the most important in business. This can be
done without any errors or mistakes with the help of computers. It also helps to locate the errors and frauds
very easily.
 Research Methodology
2.1 Objective of the study
2.2 Scope of the study
2.3 Limitations of the study
2.4 Sources of data
 2. Chapter 2
2.1 Objective of the study

The main objectives of this research can be illustrated as follows:

1. Present a detailed hypothetical coverage of the topic studied, with a focus on the concepts
in companies as general and accounting disclosures.
2. Study the impact of information technology on the accounting information system (AIS)
in companies.
3. Achieve adequate research results consisting of the problem examined and the conclusions
of this study in an appropriate way.
4. Determine the security role that information technology performs in the AIS.
5. To determine whether the involvement of information technology in the accounting system
has brought any ease to the accountants.

The main objective of this research study is to determine whether information technology improves
management effectiveness by affecting business strategies. The research studies were identified as follows:
To ascertain whether or not accountant efficiency contributes to organizational growth with the information
technology deployed. Determine whether information technology improves management effectiveness by
satisfying information needs or not. Prove that information technology improves competitiveness by
affecting business. Determine the organization experience with the effect of information technology on
accounting process. Access the role of training in charge management and justification as measured from the
accounting perspective. Ascertain whether information technology improves business efficiency by
automating basic information needs or not. To emphases on the current development of information
technology and the challenges such pose to accountants in an organization.

Therefore, the researchers will focus on methodological measures to achieve the aforementioned goals,
which will be addressed in the next paragraphs, especially during the research methods meet.
 2.2 Scope of the Study

In the course of this research works, the researcher encountered some restriction which militates against the
smooth execution of his work among these issues are: Unilever is a multinational companies with several
subsidiaries under it which had incapacitated the researcher of getting some of their transactional data for the
research methodology due to the secretiveness of the sampled population. The problem of retrieval of
research instrument administered, finance, combining my official work which makes it always difficult for
me to go out always not to do anything personal. Other limitation include time constraint, cost of carrying
out research work and unsupportive nature of respondents.

In order to understand the impact on the daily usage of accounting software in different types of business
and knowing which software would be beneficial for the fulfilment of the accounting parameters of the
business. As different scale business use different levels of software for the understanding of their standings
in their financial assets and in comparison to other firms.
 2.3 Limitation of the study

In this study the impact of information technology on accounting system, the research is limited by time.
Though this research ought to be very broad and all embracing the research is limited by time to go that far
and treat this exhaustively. The study was also limited by secrecy of information in the company, which
requires permission of the company higher authority hence most information was regarded as classified
information. Despite these limitations, the project work will be useful to any person that wants to know
about the impact of information technology on accounting system. This research though is expected to be
very broad and all embracing, it is limited to the impact of information technology on accounting system and
this is due to the fact that this is the researcher main concern at the moment.

Management will often worry about the cost (financial and social) of putting computer based system for
processing accounting data and generating accounting information. Incident of computer fraud. Problems that
may be associated with real time online operations. Errors of input (garbage in garbage out) (GIGO) Problems of
system errors. Problems that may be associated with the applications of computer based audit procedures.
 2.4 Sources of Data

Primary data is data that is tailored to a company's needs, by customizing true approach focus groups,
survey, field-tests, interviews or observation. Primary data delivers more specific results than secondary
research, which is an especially important consideration when one launching a new product or service.

In addition, primary research is usually based on statistical methodologies. The tiny sample can give an
accurate representation of a particular market. Secondary data is based on information gleaned from studies
previously performed by government agencies, chambers of commerce, trade associations and other
organizations.

This includes census bureau information. Much kind of this information can be found in libraries or on the
web, but looks and business publications, as well as magazines and newspapers. Analysis of business man's
calculation patterns can be done by this nary data analysis. In this project I have done a survey with a
questionnaire with a sample size of 20 people.

The questionnaire includes the views and outlook of the people in response to the topic. Secondary data is
used to the extent required. Reference is given in bibliography.
 3. Chapter 3
3.1 Literature Review

1. According to (Abu-Musa, 1994) in his paper: The objective of the study is to investigate the
significant perceived security threats of computerized accounting information systems (AIS) in
Saudi organizations. An empirical survey using a self-administered questionnaire has been
carried out to achieve the study. The survey results have revealed that almost half of the
responded Saudi organizations have suffered financial losses due to internal and external CMS
security threats. The statistical results also revealed that accidental and intentional entry of bad
data, by employees' sharing of passwords, introduction of computer viruses to CMS, suppression
and destruction of output, unauthorized document visibility, and directing prints and distributed
information to people who are not entitled to receive are most significant perceived security
threats to CAIS in Saudi organizations

2. According to (Tribunals, 1996) in his research study: The study has investigated a methodology
for building information systems for GAAP. The proposed system stored GAAP in an electronic
text information base and retrieves it by conceptual area. As a result, physically fragmented
segments of accounting texts are linked together by conceptual area. In the final stage of the
study, prototype-system retrievals age tested for conformity with GAAP and compared to a Key-
word search for precision. The prototype's performance justifies additional investigation of the
proposed methodology as a potential solution to the information-overload problem in accounting.

3. According to (Vedado, 1997) in his research study: His study presented an information model that is
able to support Operations Management (0M) decisions with relevant accounting information.
Decisions with relevant extant accounting information. Secondly; an information model is designed
which resolves the identified problems. The model consists of two parts. The first part is concerned
with the formalization of the accounting technique so that it can be implemented in standard software.
The second part of the design is an object model that is able to supply the relevant data for the
accounting technique. This object model builds on the REA model. The design is tested by means of
a prototype and application for two operation management decisions.

4. According to (Durer, 1998) in his research study: In Durer research, the study investigated
Intercompany effects on the accounting information systems (AIS) of small businesses when
Electronic Data Interchange (EDI) is implemented at the request of influential trading partners.
 The results have suggested an association between owner/manager's general computer attitude
and the level of AIS computerization, as well as between owner/manager's EDI awareness and
AIS computerization. While the analysis suggested a relationship, which exists between the
owner/manager's perceptions that EDI is forced on the small business and the level of AIS
computerization.
5. According to (Dunn, 1999) in his research study: The study has hypothesized that the use of an
abstraction hierarchy (which decomposes a model into multiple views at varying levels of detail)
as an interface to an events-based on accounting database would mitigate information overload
and thereby enhance the user performance. Subjects use computerized interfaces (with either no
abstraction or an abstraction hierarchy) to generate financial statements using a REA accounting
database. Subjects' accuracy, speed and perceived manageability were measured, controlled for
accounting and data modelling knowledge. On contrary to expectation, users with the abstraction
hierarchy did not perform better that those without any abstraction in their interface, which is
contrary to an axiomatic concept in computer science. Also, the study was expanded on typical
database studies by using a task sufficiently difficult to yield results that are more generalizable
to real decision making.
6. According to (David, 2000) in his research study: The study has presented the first empirical
analysis of productivity and nonpartitive advantage improvements from REA systems. To
analyse systems which are currently operational in organizations, an Accounting Systems
Characteristics (ASC) tenrec was developed, which was used to place organizations' systems on a
connection between traditional and Resource-Event Agent (REA) accounting information
systems. In addition, a questionnaire was developed to collect executives' perceptions of
competitive advantage from their information systems. results have bacon provided evidence that
the more sophisticated systems provided firms with administrative efficiencies, although they
were not supporting inter-organizational strategies for competitive advantage. In addition, firms
with more sophisticated systems were more productive than those that used more traditional
systems. Key systems characteristics were identified and the ASC metric provided a method of
capturing Information about these characteristics.
7. According to (Kowalczyk, 2000) in his research study: Kowalczyk has studied whether the
provision of expert system recommendations influenced decisions made by system users the task
was to evaluate a hypothetical company and determine whether there was substantial doubt about
the company's ability to continue as a going concern. The results suggested that individuals
tended to anchor on system recommendations in making their own judgments for
recommendation that were consistent with case information. Results of the study also have shown
that subjects showed confirmatory search behaviour m weighting the relevancy of data
 items in their decisions. This implied that improved attention maybe given evidence that is
incongruent with a system Finally, contrary to expectations; individuals who received
recommendation did not have inflated confidence beliefs about either their judgment on the case
or their ability to perform the task. However, those who received system solutions perceived less
effort that is required for the task and provided fewer comments to support their decision.
8. According to (Dearman, 2001)1 in his research study: His study has developed a model of
cognitive adaptation to changes in AIS, and he has tested the hypothesis that whether individuals
adapt their judgment /decision making processes to changes in accounting information systems is
determined by the interaction of task, relevant knowledge, cognitive ability, and motivation to
make appropriate decisions. Results shown that the majority of subjects did not adapt their
cognitive processed in response to a change in the AIS from a traditional cost accounting system
to activity based on costing system, or vice versa. Those who did adapt had the requisite
knowledge about the nature of the difference between costs reported by the different accounting
systems, had high problem-solving ability, and exhibited an intrinsic motivation to perform data
fixation are the result of person (knowledge and ability) and task (motivation)interaction and are
not directly attributable to accounting aggregation and measurement.
9. According to (Jong-Min Choc, 2001) The objectives of the study were to examine the direct
relationships between influencing factors and performance of accounting information systems
(AIS), and to identify the moderating effect of evolution level of IS on the relationships. The
results of the empirical test suggested that there are significant positive correlations between the
performance of an AIS and the influence factors such as user involvement, capability of IS
personnel and organization size. It was also proved that the relationships between performance of
AIS and influence factors are significantly influenced by the evolution level of IS. Hence, for the
success of AIS, each influence factor should be considered differently in the degree of
importance according to the level of IS evolution.

10. According to (Amer Tarek et al., 2002) The study surveys academic accounting research in the
areas of computer-based accounting systems and Electronic Data Processing (EDP) auditing. It
has also considered the computer and information science literature noting cream areas of
research which appear to be relevant to accounting and auditing. Accounting and EDP auditing
research publications have been spread and lacking in a clearly defined direction. Although some
streams of topically or methodologically related research have evolved, most efforts have been
isolated instances addressing isolated topics. The paper reviews, summarizes, and classifies the
areas of academic accounting research in computer based on accounting systems and EDP
auditing, as well as parallel areas in the (CIS) literature in attempt to provide some structure and
guidance for future efforts.
11. An article by (Gal; Steinhart, 2001) The authors mentioned three areas of the research that can
be benefited from this article in the area of expert systems:
(l) The effective and efficient use of accounting information systems to support decision making.
1. The proper design and control of accounting information systems.
2. The design of intelligent front-ends to database systems.

12. A study by (Kim, 2002) The study described a field study of 28 hospital accounting information
systems (HAIS) development groups designed to address the issue of "fit" between organizational
context and the effective design of management accounting systems (MAS). Hypotheses are
developed for study the interaction effects of contextual and MAS design variables on performance.
The results indicated that the match between HAIS task predictability and coordination modes is
significantly associated with good performance as measured by user information satisfaction.
13. A study by (Kitty Romanichal; James Guthrie, 2005) The study argued for the importance of
reporting both Intellectual Capital (IC) information and non-economic performance. Based on an
Extended Performance Reporting Framework, content analysis was conducted to examine the
voluntary reporting practices within the annual reports of selected Australian mining companies.
The results of the study shown that, the sample companies tended to place greater emphases on
Intellectual Capital (IC) information than non-economic performance information.
14. A study by (Konstantinos, 2007) The study aimed at improving practice and alerting researchers
and managers of some of the issues involved in the area of AIS related to flexibility and
adaptability of systems to changing conditions. The paper, based on a mail survey addressed to
Chief Information Officers involved specifically in AIS development/acquisition in Greek Small
and Medium sized Enterprises (SME), provides a picture of current trends in Greece. The paper
reported some findings from a wider pilot research study that addresses the Accounting
Information Systems (AIS) development/acquisition practices adopted by a sample of Greek
companies. Organizations, worldwide, realize that existing AIS are not flexible enough to adapt
to rapidly changing conditions induced by globalization and new business paradigms. Many
companies, despite high replacement costs, have replaced their legacy systems with off the-shelf
systems in order to remand competitive.
15. A study by (Noor; Malcolm 2008)' The study focused on measuring the alignment of AIS
Requirements and AIS capacity among small and medium sized firms SMEs in Malaysia and
then investigated the link between AIS Alignment and performance. Using a mail questionnaire,
data from 310 firms was collected on nineteen accounting information characteristics so that AIS
requirements and AIS capacity could be compared the results Indicated that a significant
proportion of Malaysian SMEs had achieved high AIS alignment. Furthermore, the group of
 SMEs with high AIS alignment had achieved better organizational performance that firms with
low AIS alignment. The findings provided evidence of the importance of AIS alignment and
deepened current understanding of the requirements for accounting information and the use of IT
as an information processing mechanism.
16. A study by (Lauri, 2016) The study has revealed a variety of techniques being utilized to store
data Security is a foremost concern due to the use of personal computers, modems and local area
networks. In addition to the use of accounting software packages, these companies also install
devices to screen users wanting access to data dealing with classified transactions. Back up
equipment has become a necessity with the increased use of computer communication systems.
The study also has shown a variety of methods being used to capture accounting data. Even the
smallest organization is capable of automating its accounting system in some form that is not cost
prohibitive, and some have developed quite sophisticated automated accounting systems. Larger
organizations appear to now employ a variety of automated systems to deal with accountings
information in addition to or in lieu of traditional mainframe accounting systems. Communication
systems are utilized by businesses of all sizes in collecting and disseminating accounting
information, further, non-traditional information such as quality control and customer satisfaction
data is being collected by the accounting systems.
17. The study of Esmeray (2016) aimed at identifying the impact of the use of accounting information
systems on the financial performance of small and medium-sized companies in Turkey. To achieve
the study‘s objective, the analytical descriptive approach was applied by designing a questionnaire
and distributing it over the study sample which consisted of 60 companies in the city of Qaisariya.
The results of the study showed a statistically significant positive relationship between the use of
accounting information systems and the growth rate in sales, returns and customer‘s number.
18. The study of Patel (2015) examined the impact of accounting information systems on companies‘
profitability. The study was based on the theoretical analytical approach to reach the results by
reviewing the previous studies and the concept of accounting information systems, the quality of
the accounting information systems, and the nature of the relationship between accounting
information systems and the profitability of companies and decision making. The results showed
that the there is an impact of accounting information systems on the profitability of companies
and decision-making, also it was found that the accounting information systems contribute to
provide the necessary information to take financial and economic decisions.
19. Hezabr & Qatanani (2015) studied the impact of accounting information systems on improving
the value chain in companies in the Kingdom of Bahrain. To achieve the study‘s objective, the
analytical descriptive approach was applied by designing a questionnaire and distributing it over
the study sample which consisted of 60 employees in 23 industrial companies. The
results of the study indicate that there is a lack in the availability of the accounting information
systems‘ basic components. In addition, there is a lack in the accounting information quality
needed to improve the value chain for the business organizations in the public industrial
shareholding companies in the Kingdom of Bahrain. As for the contribution of accounting
information systems in value improving was found to be weak.
 4. Chapter-4
4.1 Data analysis, Interpretation & Presentation

The following data that will be presented further in the report is being collected from as primary data from
students and businesses for understanding their outlook and knowing their familiarity with the subject in study. It
helps in a wider understanding of the subject and thus for knowing the answers to the questions asked.
The number of people who responded to the given survey is 18 and their responses for every question have
been noted in the further pages. These responses are in relation to the questions that are related to the topic
and will give a better insight on how they respond.

A series of Questions with graphical representation of their responses have been displayed on the further
pages of the report which help in understanding and knowing how the viewers have been exposed to the
information and their knowledge in the said field.
 1. From where did you come to know about IT in accounting system?
● College
● Newspaper
● Internet

From where did you come to know about IT

in accounting system?

College Newspaper Internet

The following pie chart shows the count of number of who responded to the question:
It shows that 50% of the respondents got to know about IT in accounting system from college and another
50% from the Internet. No respondents have chosen the point newspaper
 2. Are you interested in using IT in your business for accounting?
● Yes
● No

Are you interested in using IT in your

business for accounting?

Yes No

All the 18 respondents have chosen their answer as yes and would be willing to incorporate IT in
their business for the purpose of accounting.
 3. What form of business would you use the accounting system for?
● Partnership
● Sole Proprietorship
● Corporation

What form of business would you use the

accounting system for?

Partnership Sole Proprietorship Corporation

The response for this is that 56% respondents chose the partnership firm as the business in which they
would incorporate the accounting system.
28% would use it in the sole proprietorship firm
The rest of the respondents i.e. 17% would choose Corporation as their option.
 4. Has computer introduction had any impact on accounting system?
● Yes
● No
● Maybe

Has computer introduction had any impact

on accounting system?

Yes No Maybe

In accordance to question the respondents have answered as follows

72% have said yes in knowing about the impact of the introduction of computer in accounting
6% have given their answer as no in the following subject matter
22% have their answer as maybe in the same matter.
 5. Does your business use an accounting system?
● Yes
● No

Does your business use an accounting

system?

Yes No

In accordance to the question the response have been recorded as

follows 94% have said that their business does use an accounting system
6% have said that their business doesn‘t use an accounting system
 6. Are you satisfied with your existing accounting system?
● Yes
● No
● Maybe

Are you satisfied with your existing

accounting system?

Yes No Maybe

In accordance to the question the response have been recorded as

follows 56% have responded as yes that they are satisfied 11% have
responded as no that they are not satisfied.
And the rest 33% have responded as maybe.
 7. Is your accounting system easy to adapt and user friendly?
● Agree
● Disagree
● Neutral

Is your accounting system easy to

adapt and user friendly?

Agree Disagree Neutral

In accordance to the question the response have been recorded as

follows 61% have agreed that it is easy to adapt 6% have disagreed to
this thought
33% have a neutral vote in this matter
 8. Has computer introduction made the accountants more efficient?
● Agree
● Disagree
● Neutral

Has computer introduction made the

accountants more efficient?

Agree Disagree Neutral

In accordance to the question the response have been recorded as follows

89% have agreed that it has made accountants efficient

6% have disagreed that it has made accountants efficient
6% have a neutral vote in this matter.
 9. Has computer introduction made the storing and retrieval of data faster?
● Yes
● No
● Maybe

Has computer introduction made the storing

and retrieval of data faster?

Yes No Maybe

In accordance to the question the response has been recorded as in given below data.

89% have agreed that it has made efficient

6% have disagreed that it has made any difference
6% have a neutral vote in this matter.
 10. Has computer made the Account‘s job easier?
● Yes
● No
● Maybe

Has computer made the Account’s job

easier?

Yes No Maybe

In accordance to the question the response have been recorded as follows

100 % of the respondents have agreed and would definitely use it.
No respondent has denied or has responded in a negative way to the question.
 5. Chapter-5
Conclusion

Advancements in information the technology have enabled companies to computerize their information
systems. Accounting information systems have also been computerized as a result of significant
Improvements in the technology. As accounting information systems are being computerized, accountants
must gain the skills to use computerized systems. The use of computerized Accounting information systems
has brought opportunities for companies to perform the accounting functions more effectively and efficiently
because the use of computerized AIS has brought significant time and cost savings. Use of information
technology to perform accounting functions has brought a chance for companies to progress toward
paperless offices. Companies applying a production system may as well apply it more effectively if they use
computerized systems. Such tools as electronic data interchange and electronic funds transfer can provide
companies with opportunities to apply production system more effectively and save money. Some of the
advantages of using a computerized accounting system are:

● The arithmetic of adding up debits and credits columns is done automatically and with
total accuracy by the computer.
● Audit trails or details are automatically maintained for you.
● Produce financial statements simply by selecting the appropriate menu item.
● A computerized system lets you retrieve the latest accounting data quickly, such
as today‘s inventory, the status of a client‘s payment, or sales figures to date.
● Data can be kept confidential by taking advantage of the security password systems
that most accounting programs provide.

We can say there is a significant impact of IT on accounting systems an organizational performance. We can
conclude that IT has had great impacts on accounting system and organizational performance. In recent time,
it has been firms‘ desires to stay relevant by incorporating IT systems into their operations. Businesses now
go the extra mile to invest greatly in IT without being guaranteed of a rich return, which is a huge risk. The
findings in this research work show that in the implementation and adoption of information technology
systems, not only the firms are relevant but other external factors such as social influences and control,
norms, beliefs and so on, determine the extent to which IT can be adopted. As a way to add to existing
knowledge, this study aims to educate managers, employees, government and other stake holders. This study
serves as a platform to educate managers on this area. This study further serves to provide information to
employees on impact of IT on their jobs and the manner in which they can adjust to the frequent changes.
Advancements in information the technology have enabled companies to computerize their information

systems.Accounting information systems have also been computerized as a result of significant Improvements

in the technology. As accounting information systems are being computerized, accountants must gain the skills

to use computerized systems. The use of computerized Accounting information systems has brought

opportunities for companies to perform the accounting functions more effectively and efficiently because the

use of computerized AIS has brought significant time and cost savings. Use of information technology to

perform accounting functions has brought a chance for companies to progress toward paperless offices.

Companies applying a production system may as well apply it more effectively if they use computerized

systems. Such tools as electronic data interchange and electronic funds transfer can provide companies with

opportunities to apply production system more effectively and save money.

 Suggestions

Positively it promotes process efficiency and greater accuracy in managing accounting information. It also
promotes speedy processes and work flow hence improved financial performance. It further facilitates easy
and speedy storage and retrieval of relevant accounting data to enhance effective financial planning and
decision making.
Despite the above positive impacts, it has limited the use of human resource as less is needed to manage
Accounting systems. Information technology play important role in the modem accounting system. It can give
you accuracy, reporting assistance, escape from repetition of work, proper division of work among workers,
authentication of work execution for the specific person, day to day reporting to the condemn persons etc..... On
the light of the study entries and its findings and results, the following are the study suggestions:

1 The researcher recommends the petroleum companies that still apply legacy systems to convert
applying modern and advanced accounting information systems (AIS) such as Enterprise Resource
Planning (ERP) systems, and System Application Production (SAP) for oil and gas accounts, and
other modem systems such as Case-based Reasoning (CBR) and Decision Support Systems (DSS) to
accompany the nev•vt era of changes, which the applying of modern accounting information systems
should be one of the petroleum's companies qualifications additional to the technical qualifications.
The modern accounting systems abilities should accompany with technical abilities as an important
condition of the company qualifications to practice its activities in Yemeni.

2 In connection with the government companies currently have applied the uniform accounting system
to reissue a standard accounting system to suit with the petroleum companies' activities nature,
because the current uniform accounting system applied in all government companies regardless
nature of the different activities of those companies.

3 Continually training internally and externally of the accountants in the petroleum companies to
enable them to practice modern and advanced accounting information systems.

4 The financial staff in the petroleum companies should be appointed in coordination with the Ministry
of Oil, to ensure the integrity of the financial transactions and to mammie the accountings
manipulation chances by the petroleum company, and should198 train them, therefore the sharing
agreements don't mention the training of accounts and financial employees as mentioned the training
of the technical employees.
 5 Reforming the security techniques and policies in petroleum companies for accompanying the
era technology, and to protect its accounting systems of the modern technology threats and risks.

6 The researcher recommends the petroleum companies for taking steps in the direction of the
Disaster Recovery Plans (DRP) to protect its accounting systems from natural disasters.

7 The petroleum companies should apply the International Accounting Standards (IAS) with the
considerations of the Yemeni environment.

8 The current disclosure levels of the social responsibilities of the petroleum companies are not
sufficient; the researcher recommends the petroleum companies to increase the disclosure levels of
the social responsibilities.

9 Increasing the current social responsibilities more than the other branches in other countries of the
world, because Yemen is a developing country needs more efforts to become developed country.

10 Imposing the fine in case of delayed reports offered by the petroleum companies after a specific time.

The companies should disclose its tax and social responsibilities accounts inaccurate details on the websites
in all company branches spread over the world as a separate and independent branch, i.e., not disclosure only
the compound accounts of the all company branches as one set.

Increasing the accountants' numbers and training courses in the Ministry of Oil (Petroleum Accounting Dept.) to
face the important duties and heavy responsibilities had granted to accountants in Petroleum Accounting
Department concerning the checking and controlling of the multi petroleum companies working in Yemen.

To prepare separate financial statements concerning the environment protection policies and social
responsibilities.

In the petroleum sharing agreements, the Ministry of Oil should specify the accounting method; accounting
standards and accounting packages which the petroleum company should apply15. In the petroleum sharing
agreements, the Ministry of Oil should clearly specify the petroleum company's social responsibilities
especially environmental protection policies, students and employees training courses, and the categories
should get the donations from the petroleum companies.

In the petroleum sharing agreements, the Ministry of Oil should put clearly specified statement of the
recovered expenses terms, to avoid the disputes between the Ministry delegates and the company delegates
which almost recovered expenses terms are repeated and known.
 Findings

1) It is found that all the respondents were particularly familiar with the use of accounting system
that was being used in their firm or business.
2) The respondents are either very knowledgeable in the understanding of accounting software or
have an average understanding.
3) It is analysed from the data that most respondents would either be involved in
either sole proprietorship or partnership firm.
4) The data has given the insight on the impact that the accounting system has made on the business
of the respondents.
5) It is cleared from the analysis that maximum of the respondents is happy with their
accounting system.
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