Analyze the implications of technology implementation within finance and accounting department of organizations in Australia.
The major purpose of selecting this research topic is to analyze the implications of technology implementation within finance and accounting department of organizations in Australia (Maiga et al. 2014). The research design is also relied on literature review and it is also based on the previous researches that analyzed the impact of technology implementation within finance and accounting departments of companies. The highest impact made by technology is o the accounting and finance activities. The companies have bee capable to increase its profit through employing updated computerized systems in a manner that it can simply track and record every financial transaction of the companies. Certain capabilities of employing the computerized accounting processes includes enhanced functionality, rapid processing, better external reporting as well as enhanced accuracy (Moorthy et al. 2012). Knowledge sharing systems and audit software are two vital aspects for such important changes. Specialised audit software implementation along with audit task automation has changed technology for labor along with drastically changing the audit teams’ structure. It is vital to employ the advanced technology system within financing activities for obtaining business success in the future. This can also facilitate in sharing the knowledge information all over several organizations. This has also made the professionals of Australia to use its human resources in a better manner (MacKenzie 2016).
For carrying out analysis of technology implementation in finance and accounting, 20 public listed companies of Australia will be employed. Selection of such companies is deemed to be suitable that can facilitate in understanding the technology used by them in their accounting processes (Panneerselvam 2014). The managers from these organizations will be selected in carrying out survey and for attaining suitable research outcomes.
Accounting is a process which is followed within an organization for measuring the company’s financial performance along with segmenting all the vital transactions within the company (Rezaee et al. 2018). This also includes sales, assets, purchases as well as liabilities in a manner that is aligned by a particular accepted standard formats. Accounting is employed for analyzing the companies past, future as well as present prospects. In the recent years rapidly changing business surrounding, if the accounting laws as well as standards are not employed focused on the technology it can generate a concern. Research problem is understood as inadequate technology implementation within the accounting standards followed by the companies (Sahawneh, Hayek and Bshayreh 2016). Automatic software automates the traditional paper ledgers along with accounting books. The auditing software has several specialised features which can be employed efficiently for the existing business activities. Huge business activities might choose a system based software package which encompasses system of enterprise resource planning. Technology has also generated considerable advantages for the finance as well as accounting department (Schneider et al. 2015). For this reason, the technological impact has resulted in decreasing lead time required to represent the financial information and also enhances the reliability along with overall effectiveness of accounting procedures and techniques.
The first chapter of this research proposal will offer a view on research topic, description of the selected organization and on the research problem. The second chapter will explain the research problem along with developing significant objectives for attaining in completion of the research. The third chapter of the research proposal will provide an elaborated literature review that will explain and analyze all the previous researches carried out in the past regarding use of technology with finance and accounting field. The fourth chapter of the research proposal will explain the used research methodology including research type, approach, kind of data, sampling, analysis of data and ethical concern.
Accounting is a process which is followed within an organization for measuring the company’s financial performance along with segmenting all the vital transactions within the company (Simonsohn, Nelson and Simmons 2017). This also includes sales, assets, purchases as well as liabilities in a manner that is aligned by a particular accepted standard formats. Accounting is employed for analyzing the companies past, future as well as present prospects. In the recent years rapidly changing business surrounding, if the accounting laws as well as standards are not employed focused on the technology it can generate a concern. Research problem is understood as inadequate technology implementation within the accounting standards followed by the companies (Soudani 2012). Automatic software automates the traditional paper ledgers along with accounting books. The auditing software has several specialised features which can be employed efficiently for the existing business activities. Huge business activities might choose a system based software package which encompasses system of enterprise resource planning. Technology has also generated considerable advantages for the finance as well as accounting department (Suryanto 2016). For this reason, the technological impact has resulted in decreasing lead time required to represent the financial information and also enhances the reliability along with overall effectiveness of accounting procedures and techniques. For addressing such research problem, certain effective research objectives are set:
Modern Accounting System and Ethics
The modern mode of accounting is the installation of Accounting Information System (AIS), which is considered as the integral element of organization’s occupational calculating fabric. This helps the organization to keep their data in place which assists the management to take better decision. However, with advancement in technology the opportunities to commit unethical deeds rises which might include embezzlement or fraud. As per the accounting standards, indulging in any such activities are prohibited where the accountant or management manipulate the results for their personal benefit (Rezaee et al. 2018). With evolution of accounting in the organization, the risk of unauthorized access is also needed to be controlled, failing at which could result in alteration in outcome and may hamper the image of the business or may harm the shareholder’s wealth maximization process.
Accounting is associated with the process of collecting, validating and reporting of the transaction of the business operations (Moorthy et al. 2012). Earlier the same process was simple but with increasing users of the financial reports there are the high chances of manipulation for personal benefit. This issue can be considered as the ethical issue because partied involved in the same could distort the measurement of the performing items. Measure management is a process in which the people associated with the business gets engaged so as to improve their performance but the same actually represent the measures rather than gauging their true performance. It is very commonly found that people can manipulate the measures by distorting the process of financial reporting as a whole or the raw data which is supposed to get processed further. It has been observed that the manipulation of accounting process could be considered much more negative than the distortion of raw data irrelevant of that the later might prove to be more harmful.
The concept of earnings management is directly proportional to the manipulation of the profit and losses wherein the managers overstate their earnings to gain the confidence of investors. This is one of the most unethical practices which are even practiced today. It might not be illegal but has been proved to be harmful to the stakeholders of the organization. Even identifying the same could be difficult but the auditors are finding various methods to trap the same. However, tracing the same through conference call has one of the successful methods when the managers discuss of managing their earnings. Managerial incentives are considered as the dominating factor which influences the earnings management generally in case of new equity issued (Sahawneh, Hayek and Bshayreh 2016). Moreover, the ethical norms of accounting are also challenged when the managers disclose their pro-forma earnings rather than standard earnings as the former is always higher than the later. The internal news of the organization has also been against their ethical norms where a person with internal knowledge buys or sells the shares. This is also termed as insider trading.
However, to increase the reliability of the financial reports, inclusion of technology is of utmost importance. However, it has been mentioned that the ethics comes from within the person operating and not with the technology but technology can help in curbing the manipulation of process even if cannot fully stop it.
Information Technology and Auditing
Technology took an imperative place in various areas such as accounting and financing, management etc. The implementation of effecting technology in such areas enables the stakeholders to get accurate information which helps them in better decision-making process. The technological advancement in the accounting system is directly associated with the Accounting International System (IAS) which reflects the implementation of technology into the accounting process within an organization (Rezaee et al. 2018). An implementation of the same in an effective manner could assist the managers to enhance their annual reporting via internet. This can be easiest way to reach each and every stakeholder of the organization. This will help the investors as well as the other stakeholders to take a better strategic decision to maximize their wealth associated with the organization. It has also been learned that an effective use of IAS could help the management in better policymaking as well as strategic future plans. An effective reporting of the financial performance is positively proportional to the efficient management of the accounting information system. Moreover, it also provides opportunities to managers towards skilled decision making with various possibility of positive outcome (Sahawneh, Hayek and Bshayreh 2016).
It has also been learned that the business environment is also affected by effective implementation of technology which not only improves it but also help in curbing the issue associated with the business environment. The performance of the firm is directly associated with the communication channels which highly depends on the technological advancement across the organization. This will also assist in reduction any obstacle be it financial or organization towards achieving an efficient access towards the capital market (Moorthy et al. 2012).
Furthermore, an effective alteration of the technology as well as information system can enable the managers to focus towards the anticipatory information which assists them to create short-term forecasting rather than relying on the obsolete plans so as to avoid complexities in the process of business operation and eventually making better corporate strategies. However, it has been observed that the accounting information system turns out to be cost incurring when it develops relations the managerial and financial accounting processes. It is so because such accounting information system has to adopt the accounting standards and rules in order to translate the data of financial accounting to managerial accounting which creates complexities as well as challenges for the organization to maintain the same. Hence, in such a way, the accounting information system influences the firm’s performance (Sahawneh, Hayek and Bshayreh 2016). However, another study suggested that the implementation of technology in the accounting system of the organization could reduce the cost associated with the product and service it provides. Therefore, the company needs to maintain a high standard of the accounting information through system up gradation by addition of new software, hardware and database.
Limitations of Technology Used in Accounting and Finance
According to Ahmi, Saidin and Abdullah (2017) the major limitations of implementing accounting technology within the Australian organizations has observed several limitations in their implementation within the organizations. The researchers have failed to implement the information technology within several accounting modules that include standard costing, budget as well as responsibility centre. Basal (2015) revealed that certain general factors also impact IT within management accounting that indicates weakness of the companies. Along with the same, the researchers have also observed that there are distinct accounting modules so that the implementation of role and technology can be recognized within the management. Bochulya, Korobkina and Kovalevska (2018) evidenced that previous researches are majorly focused in accounting information system along with its effectiveness in addressing the needs of the managerial and financial performance. Future research can also investigate the function of AIS within the accounting and finance department of Australian organizations in order to address their financial objectives. It has also been evidenced from the previous researches that the convergence of managerial accounting and financial accounting only within the technological and technical domain offered a detailed understanding of the behavioral as well as company attitude towards the implementation of such accounting technology. Byrnes et al. (2018) stated that analysis of distinct modes of convergence can be carried out so that it can facilitate in identifying the function of technology within the managerial and financial accounting performance. Certain limitations in the previous researches of employing accounting technology has also been identified in the ways data has been gathered to recognize the effects of implementation of accounting information system and other accounting technologies that can enhance the accounting information as well as reporting considerably.
Managerial Implications of Accounting Technology
According to Chan and Vasarhelyi (2018) advancement in technology has facilitated the Australian public listed organizations in digitalizing the overall accosting and financial system. These researchers have also indicated that accounting systems has turned out to be highly computerized because of considerable improvement in technology. Choy (2014) stated that the implementation of technology to carry put all the important management as well as accounting conducts has facilitated the companies in making progress towards maintaining a paperless office. Implementation electronic fund transfer as well as interchanging of digital data has offered the organizations with numerous opportunities in order to make sure that the accounting and functioning activities are employed in an efficient and accurate manner. Cleary and Quinn (2016) indicated that the implementation of technology within accounting has also attained vital chances of time and cost saves. These researchers also stated that the ethical standards developed by the professional accounting bodies within Australia have resulted in proper implementation of auditing functions within Australia. From the previous researches it has been gathered that there are several managerial implications in order to enhance the database of accounting information. Cooper (2015) revealed that because of the same managers considerably enhance their knowledge along with considers to share information all through the company to make sure that the managers make effective and evidence focused decisions. These researchers indicated that due to drastic changes within technology along with emergence of innovative technology based hardware and software lot of the Australian companies considered implementation of IT based management accounting conducts. Dong and Wu (2015) revealed that there are several advantages for the managers in preparing better managerial accounting system in order to ensure effective financial information reporting along with carrying out the automation of audit task. This will also make sure the long term success of the Australian accounting and finance organizations within the industry.
Through accounting technology use the managers of Australian companies considerably develop their understanding regarding the relationship among the accounting information system and managerial performance that can impact the financial performance as well as accounting information system. Hejazi, Halpin and Biggs (2014) evidenced that such knowledge can be advantageous for the managers n order to enhance their managerial capabilities that can facilitate in better implementation of accounting software and computers. This can further enhance the functions related with financial performance of the organizations. In addition, these researchers also elaborated that among the advantages of technology implementation within financial and accounting practice is associated with enhancement of technological domain through implementation of accounting software and enterprise resource planning (ERP). According to Humphries (2017) accounting technology facilitates the management to develop superior accounting standards as well as policies, discretionary reporting, competitor, performance management, contractor and consumer evaluation for enhancing the companies accounting performance.
Humphries (2017) revealed that the information technology introduction over the years had transformed the industrial financial and accounting functions. In case the Australian organizations are not able to find any in-house accountant, it can make the technology effective and easy to attain professional working on the company’s business finances. These researchers also revealed that cloud computing facilitated in maintaining business information in a secured internet server. At the time an accountant employs solutions offered by cloudy computing, the business owner attains instant access through his computer to accounting information that is relevant for business of the accounting companies. Loughran and McDonald (2016) experienced that the debits or credits made by the parties involved in accounting process can be instantly available for review. Such accessibility makes it possible for the owners of the companies to analyze the valuable financial information required to operate businesses with less delay. These researchers explained that the tax and accounting software advancements have streamlined the overall accounting process along with filing returns.
Most of this accounting software is associated with highly appropriate corporate tax software that indicates segmentation of data is conducted rapidly and segmented within the appropriate tax segments. According to Ledford and Gast (2018) most of the business entrepreneurs do not require a full time in-house accountant. In such situation having internet as well as technologically advanced information based accounting, a virtual accountant can position itself as an efficient in-house accountant. Through implementation of advanced technology within the accounting process, the Australian organizations can attain easy access to a lot of business documents. Previously, at the time the accounting was traditionally handled attaining such relevant business information took a lot of time. MacKenzie (2016) stated that through scanning and signaling accounting technologies, information can be stored and maintained within the cloud through which the clients can sign and modify information as required.
Research Type
In analyzing the benefits of technology implementation within accounting and finance department in companies, descriptive research type will be taken into account. Descriptive research will also elaborate in embracing the manner in which transparency within the accounting information can be observed through implementing advanced accounting technologies (Swann 2018). This method is assured to be applicable within this exploration as it can support in explaining the aspects associated with a specific population or research process used within the companies. Descriptive research method implementation within the research is also known to elaborate a situation in the organization focused on obtaining finical information from new accounting software. The most accurate data gathering method in the descriptive research type is questionnaire survey. Descriptive research type is also a scientific method which considers explaining and analyzing the behavior of accountants in employing technologically advanced accounting methods for attaining proper operations of finance and accounting based business operations in the Australian companies (Taipaleenmäki and Ikäheimo 2013).
Approach of Research
Qualitative as well as quantitative research approach is taken into account in attaining significant findings of technology use within the finance and accounting business operations. Research approach of being qualitative is used in this exploration as it can facilitate in analyzing trends within the thoughts and viewpoints as well as providing a deeper insight for the recognized research problem (Tayeh, Al-Jarrah and Tarhini 2015). Quanttaube approach for the research taken into account in this exploration explains that the information is significant that will be analyzed in collecting relevant information focuses on attaining considerable research findings. In addition the gathered quantitative data might also support in providing significant data on human inclination subject and it also requires a huge se of sample to carry out research analysis (Trigo, Belfo and Estébanez 2014). With this regard, accountants from the Australian public listed organizations will be chosen in evaluating the efficiency of accounting tools use for enhancing accounting and financed based business operations in the companies.
Type of Data
Secondary and primary both types of data will be gathered in this research and collection of primary data will take place through the use of questionnaire survey. This research instrument can collect primary data in cost and time efficient manner as it attains responses from a large sample (Tian and Xu 2015). Secondary data for this exploration will be collected by means of certain reliable books, peer reviewed articles and journals, recently updated information containing websites containing use of recent developed accounting technologies in Australia. The primary s well as the secondary data that will be gathered will be today focused on the research objectives.
Data Collection
Interview process is most suitable data collection technique in carrying out qualitative data collection process. By using this interview process, relevant data regarding the accounting technology use in the will be gathered from sample size of 61 accountants from the selected public listed companies of Australia are selected for extracting relevant views on different technologically advanced accounting software used for enhancing business operations in their company (Vaioleti 2016). In such process of interview certain relevant questions on the types of accounting technology employed by the Australian accountants and whether they attain suitable advantages from the accounting technology use. Qunatutyaiv data will also be collected in the current exploration through the process of survey in which questionnaires with open and close ended questions will be distributed among the target accountant of the Australian companies (Watty, McKay and Ngo 2016). The questions asked for quantitative analysis will encompass demographic questions, advanced accounting technologies used in companies and use of such technologies in the accounting and finance business functions in companies.
Research Sampling
Simple random sampling is decided to be used by the researchers in gathering relevant viewpoints on implementation of technology within finance and accounting operations in selected Australian organizations (Sahawneh, Hayek and Bshayreh 2016). This sampling method is suitable in this exploration as it gives chance to all the target participants to get selected within the survey. Considering the same, collection of the quantitative information is considered from a large population by means of using this sampling technique. Through use of simple random sampling process it is assumed that the quantitative research analysis requires relatively bigger sample size for obtaining along with analyzing responses collected from the respondents participating within the research process (Sahawneh, Hayek and Bshayreh 2016). In this accountant, sample size of 61 accountants from the selected public listed companies of Australia are selected for extracting relevant views on different technologically advanced accounting software used for enhancing business operations in their company.
Data Analysis
Analysis of data will take place by means of employing all the relevant and statistically significant tools that can further facilitate in attaining suitable research outcomes regarding use of accounting technology within Australian organizations and its effectiveness (Sahawneh, Hayek and Bshayreh 2016). The data gathered will be presented in the form of figures, tables and graphs that can in turn ensure better analysis of research results. MS Excel application will be utilized in conducting regression and correlation analysis for attaining the research findings based on research objectives. Such data analysis techniques are employed for the reason that it can facilitate in maintaining the transparency as well as suitable data interpretation to attaining pertinent research findings.
Ethical Concern
Ethical codes are associated with accounting and finance that has positively impacted the value systems along with the beliefs of the society. Certain vital advantages to the society that are ensured through employing computerized system includes that the audit trails and details are attained automatically (Watty, McKay and Ngo 2016). Moreover, the computerized system facilitates the people to retrieve certain accounting data rapidly that include status or details associated with consumer payments as well as sales figure till date. Financial data can be maintained confidentially through attaining the advantages of every security password systems which is offered by several latest accounting processes.
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