Aside from legal and ethical implications, Accounting Technology has played an important role in keeping track of corporate numbers. Traditional paper based methods are often prone to human errors, providing means to internal fraud and is susceptible to unethical practices. Dishonest employees can easily scratch off numbers from a list or shred invoices, sales orders and payments to make it appear that a sale hasn’t been made. The movement to electronic and computerized systems for companies, although does not completely eliminate, helps minimize dishonest practices. The evolution has also enabled improved efficiency.
Now, corporations who have international operations can balance their books at the end of each day by integrated and linked systems. Providing for an easier audit trail. This advancements with its evident benefits, has also increased the likelihood of online sabotage, breach of systems, confidentiality issues and other business risks. According to the 19th Annual American Institute of Certified Public Accountants’ (AICPA) Annual Top Technology Initiatives survey, information security management will be the most important initiative affecting IT strategy, investment, and implementation in business organizations over the next 12 to 18 months.
(Source: American Institute of Certified Public Accountants, Newsletter on: 2008 Top Technology Initiative, Retrieved: June 20,2009). To address this concerns, Federal agencies are formulating stricter policies and procedures for Information Security, as well as the continual development of Firewalls, Spam technology, Rigid password access, stricter control measures, Development of forensic technology wherein fingerprints/thumbprints are required to access specific accounting systems.
Firms who employ online technologies have also designed Disaster Recovery procedures for protection. Given the uncertain economic condition, it is important for firms to understand the importance of taking into considering the various ethical, legal and technological concerns that affects accounting. This is a very important aspect of a business, a staple function and therefore must be given much attention and detail. First of all, Investing in proper accounting technology, suited for the particular business can minimize the risk of fraud, and improve efficiency.
Secondly, it is important to ensure that internal accounting process adheres with the guidelines of accepted principles. At this time, tax evasion suits or claims of fraud can definitely bring a corporation and its shareholders down. Lastly, the employment of an independent auditor free from bias to ensure proper reporting of financial condition must be done.
Garrison, Noreen, Brewer (2008) Managerial Accounting, 12th Edition, Managerial Accounting and the Business Environment p. 2 Gitman L. E.
(2003) Principles of Managerial Finance, 10th Edition, Leverage and Capital Structure p. 524 Iain Dey and Dominic Rushe (January 25, 2009) Times Online, Article on Auditors: In the Palm of the Banks? Retrieved: June 21, 2009, (http://business. timesonline. co. uk/tol/business/industry_sectors/banking_and_finance/article5580824. ece) AICPA (2008) The AICPA Top Technology Initiatives, Retrieved: June 21, 2009, (http://www. aicpa. org/Magazines+and+Newsletters/Newsletters/The+Practicing+CPA/February+2008/The+AICPA+2008+Top+Technology+Initiatives. htm)