Subject: Finance and Financial Statements Essay

Submitted By EdrianGaspar1
Words: 895
Pages: 4

Edrian T. Gaspar
Accounting 101- 004
Tuesday, December. 11, 2012
Professor: Ladylease White

Effects of Technology on the Accounting Profession Paper The Effects of Technology on the Accounting Profession has gone where no one thought it would 50 years ago. Fifty years ago Accounting systems was done on columnar accounting paper and carbonized checks, receipts. Then using an adding machine that had tape to compare totals and calculation rows of various monthly totals to make accounts balance. To today where accountants need to know their technology, companies are increasingly moving away from paper documentation to keeping everything on the computer. Technology has changed in the way companies compute and file taxes. Companies can purchase tax software to compute the total or the accounting software they use has add on packs that will take what information that has been entered the general ledger and compute the amounts that are owed. Using a tax program allows the preparer to either print out a return or file it electronically. Tax preparers have changed over time from filling out paper documents to entering everything online. To paying the IRS through online banking or receiving a return electronically into a bank account. The IRS introduced electronic filing in 1986. Electron filing has help cut costs from handling paper returns, and save time to inputting the tax returns into the system and preventing mistakes. Tax preparers have the IRS web site to look up new laws from year to year to help clients use the new law s to benefit them. The can use the search function to find answers quickly. Payroll has also been change by technology. Instead of a paper a time card you log into a computer and with a user’s name and a click of a button you can clock in, and then again clock out at the end of the day. This information can go directly to payroll without having to collect time cards. Computer programs can calculate the hours take the information for deductions from the W-4 and figure out federal and state taxes. There are options to have an employee’s check automatically deposited into an employee’s bank accounts. Saving time and money of printing out a check, having the employee take the check to the bank and waiting for the check to clear. Banks also wave banking fees if the account holder has an automatic deposit link up to the account. Technology has made auditor jobs harder. The Auditing Standards Board (ASB) “ guide accountants when auditing the financial statements of an entity where considerable information is transmitted, processed, maintained, or accessed electronically” (New York State Society of CPAs, 2007). Electronic documents are more reliable than vocal proof, but photocopies are less reliable than original documents. When auditing there need to be enough evidence to prove what is stated on the financial statements. Because of technology it is easier to create fake documents, using scanners and printers. This is why it is required to have independent auditor look over the books for a company. The Internet has changed the accounting profession. Accounts can communicate through e-mail to transmit information to clients. The intranets and extranets help to secure companies information that they can share among employees and select outsiders. If a company is publicly traded companies can compare their financial statements with other companies to compare. The internet has also provided an opportunity to have their business on line and have customers ordered directly from them without having to have a store