In the modernorganizations, it is rare to find an organization undertaking its bookkeepingwith the use of old-fashioned books or columnar pads. The technologicaladvancement has paved way for computerized accounting as the basis forconducting bookkeeping and other accounting measures by the organization.
Accounting systems are easy to use and they are affordable to most of thebusinesses (Whittington & Delaney, 2013). The level ofcompetition has increased and this has implied that businesses have devisedways in which they can increase the production process. As such, it has meantthat transactions that are reported in the organization have increased; hence,making technological advancement to be quite reliable. The expansion ofbusiness initiatives has also meant that there is a need for an increase inprocessing capacity, storage, and speed, which has seen an evolution of newerand reliable machines to undertake the operations of the entity. In this essay,the focus is on explaining the role of computers in financial accounting anddiscussing the significance of digital revolution in enhancing efficiency andspeed of conducting financial reporting.
Computers are used in enhancingdecision-making in the financial accounting framework. The interdependentnature of departmental objectives can be challenging to the organization, butwith the use of the computers, it has made it possible to link the differentdepartments in providing an informed decision on the financial framework andpolicies that the company can undertake (Spraakman et al., 2015).The information systems have been utilized by the organizations in determiningresource allocation process and managerial decision-making.
One of thecomputerized decision support tools is the Transaction Processing System (TPS).The system has played an important role in the financial accounting as itfacilitates information regarding the input required and the output to beachieved in the organization. The automation of the TPS system has necessitatedefficiency of the resource allocation and processing of information, and it hasbeen integral in achieving competitiveness in the dynamic sector. As such, thevalidation of the transaction that is undertaken using the TPS system can bedone within the limited time possible and enhance the overall efficiency of theoperations. According to Goldwater & Fogarty(2012),the computer has been helpful within the organization as it performs differentfunctions that can necessitate the provision of accurate information that canenhance internal and external transactions to be undertaken with ease.
The dataentry process that can be conducted in the organization is aided by the use ofcomputers, and employees within the organization can easily determine whetherthe information entered is correct or not. The bank account information of theclient can be easily tracked and the process can be validated and revalidateddepending on the discretion of the company. It is easy for the employee tocheck the input validity of the data that is provided and it is integral inensuring that the reported information shows the true and fair view of thefinancial statement of the company. The financial transaction data can beinfluential in assessing the quality of the information being provided, andthis is integral in achieving reliability of the data being presented to thestakeholders. Computers are alsoimportant in financial accounting as it enhances the preparation of the ledgeraccounts for the clients including the suppliers’ and debtors’ ledger accounts.
As such, it is easy to monitor the progress of the suppliers and debtors anddetermine an effective framework in which payment and receipts are recorded (Antman & Stevens, 2014).The preparation of the ledger accounts is made simpler and easy to follow, andthe employees can follow the trends in the reported data and information. Thepayrolls are processed and maintained with the intention of showcasing the changesthat can be managed in reducing the operational costs. Other roles of computersin the financial accounting include aiding the financial management inpreparing a trial balance, profit and loss accounts, and balance sheet. The digital revolution thathas experienced in the economy has been influential in improving the financialreporting, and it has not changed the standards that are used in the reportingprocess. The speed of conducting financial reporting has been improved with theuse of digital tools, and the stakeholders can easily access the reports fromthe company’s website. Unlike in the past where the financial reports of thecompany would be accessed from the physical location of the company, the use ofcomputerized financial reporting strategy has meant that individuals can accessthe information from anywhere as long they have access to the company’swebsite.
As such, the digital revolution has improved the operations of thecompany and the financial reporting can be undertaken with ease. ReferencesAntman, L., & Stevens, K. (2014).
Wiley CPA Examination ReviewFocus Notes: Financial Accounting and Reporting. Hoboken: John Wiley &Sons. Goldwater, P.
M., & Fogarty, T. J. (January 01, 2012). Cash FlowDecision Making And Financial Accounting Presentation: A ComputerizedExperiment. Journal of Applied Business Research, 11, 3, 16.
Spraakman, G., O’Grady, W., Askarany, D., & Akroyd, C. (September03, 2015).
Employers’ Perceptions of Information Technology CompetencyRequirements for Management Accounting Graduates. Accounting Education, 24, 5,403-422. Whittington, R., & Delaney, P. R. (2013). Wiley CPA exam review2013.