ICT AND IT’S INFLUENCE ON ACCOUNTING PROFESSION

Accounting is the process of identifying, classifying and recording, and presentation of financial economic activities of an entity with the aim of facilitating decision making by the users of the information. This process is usually done manually with the use of separate ledgers to record financial transactions. It involves the use of paper, books and pen to record and prepare financial statements and manual calculations. This task is tedious and time consuming and can therefore lead to several human errors. This occurrence might be minimal in small entities such as sole proprietorship. However, in big entities such as a public limited liability company, these errors could occur more often without possibility of being detected which could affect the entity on the long run.
There is no doubt that the manual system of accounting is cheaper than the automated accounting system which is one of the reasons why small businesses still use it. But as a business grows, there is a need for a shift from manual accounting of financial transactions to automated processes i.e., Information and Communication Technology especially in today’s generation where most transactions are performed with the use of electronic gadgets such as Computers, Computer software and the internet. The accountant only needs to enter the transactions into the software which simply performs computations and presentation thereby relieving the accountant of such task. Any company with large size seeking to be efficient and effective in its financial operations would need to adopt an automated system of accounting. For a company to attain efficiency and effectiveness, it would require capacity to process accurate and timely information, hence, the need for Information and Communication Technology.
Information and Communication Technology (ICT) is often used as an extended synonym for information technology (IT), but is a more specific term that stresses the role of unified communications and the integration of telecommunications (telephones lines and wireless signals), computers as well as necessary enterprise software, middleware, storage, and audiovisual systems, which enables users to access, store, transmit and manipulate information. ICT is an umbrella term that includes any communication device or application, encompassing; ratio, television, cellular phones, computer and network hardware and software.
Information technology has been around for a long time as long as people have been around because there were always ways of communicating through technology available at that point in time. There are four (4) main ages that divide up the history of information technology. These ages include; pre-mechanical, mechanical, electromechanical and electronic only the latest age i.e. electronic and some of the electromechanical age really affects us today.
A major ICT has been made on accounting is the ability of companies to develop and use computerized system to track and record financial transactions properly and accurately. The recording of business transaction manually on ledgers, papers, spread sheets etc has been translated and computerized for quick and easy presentation of individual financial transactions and give a report on it. Shanker (2008)ascertains that the use of ICT in many organizations has assisted in reducing transactional cost, overcoming the constraints of distance, and have cut across geographic boundaries thereby assisting to improve the coordination of activities within organizational boundaries. It is very clear that the computerized accounting system has improved the functionality of accounting departments by increasing the timeliness of accounting information and report preparation of statement of cash flow, market shares report and departmental profit & loss are now more accessible with computerized system.
Computerized accounting systems have internal check and balance measures to ensure that all transactions and accounts are properly balanced before the financial statement is finally prepared. It also will not allow journal entries to be out of balance when posting, ensuring that individual transactions are properly recorded.