Computers have gone through many changes since it was first invented and
now it has become a necessity in every business, household, institution etc.
They are a big aid when it comes to accounting according to (Wilson, S.2017,
lecture notes) as “computers can be used to complete virtually every task in
the entire accounting function. Examples of the systems used include
spreadsheets, databases and accounting software that can be specially written
for the company.” This is so different to the traditional ways of financial
reporting as it is much easier to carry out tasks. Computers also carry out
many roles such as recording transactions, keep track of debtors, payroll
accounting etc. However, for computers to be used and for these roles to be
carried out the operator needs to understand the accounting process.
One of the roles of using computers in financial accounting is to record
transactions. Recording transactions are important for businesses as they need
to note down which accounts are debited or credited. Computers are beneficial
to us when recording transactions as they improve accuracy. According to
(THOMAS AND WARD,2015, pg.810). “Computer accounting programs can do numerous
checks other than fundamental mistakes” However, computers are only as good as
the information they are given and cannot recognise errors in input. Therefore,
“it cannot prevent fundamental mistakes like typing in the wrong amount for a
quantity order.” This could also let fraud happen as users could easily
manipulate the data entry and embezzle from the company. Moreover, according to
(THOMAS AND WARD,2015, pg.810) “Mistakes can also be avoided by reducing the
need for data to be keyed in time and again, for example, a customers’ address
and other basic details can be typed in during an initial setting up session.”
Therefore, it becomes easily accessible as all you do is type in the persons’
ID etc to access his/her information, and thus allowing for improved accuracy.
However, every business is different, some businesses want different
features on their accounting system that might not be on there. This is known
as feature creep as some businesses require own unique requirements and they
are very expensive to get, according to (THOMAS AND WARD,2015, pg. 817). “the
designers of accounting packages are constantly seeking to include every
feature which they think a user might need.” However, constantly adding new
features could inevitably lead to complex products that are hard to use and are
baffling. It also a time waster as the manager has to “devote a lot of time to
decide which features to activate, reject or add missing features.
Another role of using computers in financial accounting is to process
payrolls. Computers are used by accountants to be time efficient; allowing them
to complete a job at a specified time for example when preparing payrolls as
these tend to have a deadline, therefore, this saved time could then be best
used elsewhere. Another advantage of computers being time efficient is that it
reduces labour cost as fewer people are required to carry out accounting tasks
unlike in the past. Also, the Use of spreadsheet also saves a lot of time for
accountants as it can be accessed in real time unlike traditional ways of
financial reporting where it was difficult to access the information you wanted
whenever you wanted, therefore, increasing job satisfaction.
However, according to (THOMAS AND WARD,2015, pg. 809), “as the accounts
grow, it will become increasingly difficult to keep track of them; and since
spreadsheets are designed to be easily changed and over-written, they are
difficult to control and audit.” Therefore, suggesting it might not increase
job satisfaction if accountants are not aware of the changes being made.
Lastly, another role is that computers allow us to back-up data.
According to (Wood and Sangster, 2012, pg.268) “companies back up data …
nightly, by copying data onto a second device … and stored in a different
location”. The backed-up data will still be accessible even in the case of a
disaster such as a fire breaking out, whereas in the past that data would’ve
been lost. Also, computers allow us to protect our work as we can use passwords
to restrict access to unknown people and thus prevent hackers from accessing
Overall, computers currently are so helpful to
accountants and they have not hindered traditional financial reporting. The
accounting systems used come with so many advantages as they are faster,
easier, accurate, flexible and time efficient.