In the modern
organizations, it is rare to find an organization undertaking its bookkeeping
with the use of old-fashioned books or columnar pads. The technological
advancement has paved way for computerized accounting as the basis for
conducting bookkeeping and other accounting measures by the organization.
Accounting systems are easy to use and they are affordable to most of the
businesses (Whittington & Delaney, 2013). The level of
competition has increased and this has implied that businesses have devised
ways in which they can increase the production process. As such, it has meant
that transactions that are reported in the organization have increased; hence,
making technological advancement to be quite reliable. The expansion of
business initiatives has also meant that there is a need for an increase in
processing capacity, storage, and speed, which has seen an evolution of newer
and reliable machines to undertake the operations of the entity. In this essay,
the focus is on explaining the role of computers in financial accounting and
discussing the significance of digital revolution in enhancing efficiency and
speed of conducting financial reporting.
Computers are used in enhancing
decision-making in the financial accounting framework. The interdependent
nature of departmental objectives can be challenging to the organization, but
with the use of the computers, it has made it possible to link the different
departments in providing an informed decision on the financial framework and
policies that the company can undertake (Spraakman et al., 2015).
The information systems have been utilized by the organizations in determining
resource allocation process and managerial decision-making. One of the
computerized decision support tools is the Transaction Processing System (TPS).
The system has played an important role in the financial accounting as it
facilitates information regarding the input required and the output to be
achieved in the organization. The automation of the TPS system has necessitated
efficiency of the resource allocation and processing of information, and it has
been integral in achieving competitiveness in the dynamic sector. As such, the
validation of the transaction that is undertaken using the TPS system can be
done within the limited time possible and enhance the overall efficiency of the
According to Goldwater & Fogarty
the computer has been helpful within the organization as it performs different
functions that can necessitate the provision of accurate information that can
enhance internal and external transactions to be undertaken with ease. The data
entry process that can be conducted in the organization is aided by the use of
computers, and employees within the organization can easily determine whether
the information entered is correct or not. The bank account information of the
client can be easily tracked and the process can be validated and revalidated
depending on the discretion of the company. It is easy for the employee to
check the input validity of the data that is provided and it is integral in
ensuring that the reported information shows the true and fair view of the
financial statement of the company. The financial transaction data can be
influential in assessing the quality of the information being provided, and
this is integral in achieving reliability of the data being presented to the
Computers are also
important in financial accounting as it enhances the preparation of the ledger
accounts for the clients including the suppliers’ and debtors’ ledger accounts.
As such, it is easy to monitor the progress of the suppliers and debtors and
determine 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, and
the employees can follow the trends in the reported data and information. The
payrolls are processed and maintained with the intention of showcasing the changes
that can be managed in reducing the operational costs. Other roles of computers
in the financial accounting include aiding the financial management in
preparing a trial balance, profit and loss accounts, and balance sheet.
The digital revolution that
has experienced in the economy has been influential in improving the financial
reporting, and it has not changed the standards that are used in the reporting
process. The speed of conducting financial reporting has been improved with the
use of digital tools, and the stakeholders can easily access the reports from
the company’s website. Unlike in the past where the financial reports of the
company would be accessed from the physical location of the company, the use of
computerized financial reporting strategy has meant that individuals can access
the information from anywhere as long they have access to the company’s
website. As such, the digital revolution has improved the operations of the
company and the financial reporting can be undertaken with ease.
Antman, L., & Stevens, K. (2014). Wiley CPA Examination Review
Focus Notes: Financial Accounting and Reporting. Hoboken: John Wiley &
Goldwater, P. M., & Fogarty, T. J. (January 01, 2012). Cash Flow
Decision Making And Financial Accounting Presentation: A Computerized
Experiment. Journal of Applied Business Research, 11, 3, 16.
Spraakman, G., O’Grady, W., Askarany, D., & Akroyd, C. (September
03, 2015). Employers’ Perceptions of Information Technology Competency
Requirements for Management Accounting Graduates. Accounting Education, 24, 5,
Whittington, R., & Delaney, P. R. (2013). Wiley CPA exam review
2013. Hoboken: Wiley.