PROGRESSING TECHNOLOGY AND THE OBSOLESCENCE OF ACCOUNTANTS.

• Author: Boylan, Daniel H.
• Position: Report

INTRODUCTION

In today's business world, accountants provide several differing financial services for small and large companies. Traditionally, one would expect an accountant to manage a company's books, compile and file their taxes, as well as prepare financial statements (Alwin, 2003; Schoenfeld, Segal, & Borgia, 2017). To improve the efficiency and effectiveness of those tasks, it was necessary to create software. Services provided by accountants are necessary to a company's well-being and survival, and the need of these services are cause for steep prices. Because of this, it is challenging for smaller organizations to afford professional accounting services (Peshori, 2014). Fortunately for those organizations, many of the software packages intended for professional use, are also available to any company wishing to use them at a reasonable price. Both small and large organizations now choose to perform basic accounting with software, rather than paying for services (The integrated practice system, 1994). This brings forth the following question: Will technology eventually replace the need for accountants?

This paper looks at what accounting work business owners and accounting professionals perform with the help of software, and the need, or lack of, accountants to perform these tasks. The question this paper asks is whether a business owner can perform all necessary accounting work without the help of a professional. To do so, this paper examines the service ranges of professional accountants and what they provide to clients. To provide these services, accountants use a combination of their book knowledge and software knowledge to aid them. This paper compares and contrasts those factors to see to what extent they improve efficiency and effectiveness. This allows consumers to see where software falls below expectations and what business owners do on their own for their organizations. With these examples, consumers will be able to compare and contrast technology available for business organizations. Towards the conclusion, this paper examines the services professionals perform, as well the service business owners can independently complete.

The remainder of this work is organized into the following four sections. First, there is a literature review looking at prior literature that informs this study. The next section includes methodology, including both the research question and experiment design. The third section includes the research findings. Finally, the research ends with conclusions, including limitations, implications and suggestions for future research related to this work.

LITERATURE REVIEW

The easiest way for an outsider both to see and to understand the health of a business is through the organization's financial statements. The financial statements outline the state of an organization's assets, liabilities, stockholders' equity, revenues, expenses, retained earnings, and cash flows (Two statements of financial accounting concepts, 1981). Correct financial statements are essential to an organization, and easily managed with professional support. However, issues arise when including the cost of a Certified Public Accountant (CPA), or general professional (Ledgerwood & Zarb, 2014). This is especially relevant because of the countless numbers of sole proprietorships and partnerships in the United States. These businesses, which are primarily small, may be less likely to be able to afford the cost of such services. This restriction makes software, such as SAP and SAS, more appealing (Lin, 2010).

The easiest way to remove human error from the preparation of financial statements would be to use the software. As explained in the following paper written for In Procedia--Social and Behavioral Sciences, "Most computerized accounting systems have an internal check and balance measures to ensure that all transactions and accounts are properly balanced before financial statements are prepared. Computerized systems will also not allow journal entries to be out of balance when posting, ensuring that individual transactions are properly recorded" (Maziyar, et al., 2011). This extra accuracy assures organizations that the recorded journal entries are correct. This is also done without hiring professionals (Schoenfeld et al., 2017). This process makes it easy to see why setting up software is more appealing to organizations, rather than hiring professionals. However, it should be noted that organizations generally are behind when implementing new methods of accounting (Cokins & Angel, 2017). This can be a hindrance on the profession, as with each new advancement in technology, accounting professionals fall behind (Ledgerwood & Zarb, 2014).

When it comes to general accounting purposes, software is often intuitive to learn. However, tax software is a bit different. Tax software exists for individuals, though most packages are tailored to tax professionals (Schmitz, 1975; Zarowin, 2007). As the following journal article explains, "many taxpayers are still hesitant to use software and to e-file because of various reasons, such as lack of trust, limited access to technology, and limited knowledge about the technology" (Mcleod, Pippin, & Mason, 2009). These limitations lead to the theory that tax professionals are not in immediate danger. However, this does not suggest that tax professionals are safe. Although the tax side of accounting does not necessarily have better job safety, the following statement summarizes the need for technological advancements in tax as well. "Therefore, instead of processing tax manually, companies can use computer software to perform the same functions. As a result, even complex calculations can be performed via computers in a short period of time" (Maziyar et al., 2011). This capability aids organizations in having tax services performed quickly. Although, this assessment does not include that tax software is created for professional use, rather than individual use (Rood, 2014).

The client's peace of mind in regards to overall accounting services is another reason why organizations are switching to software. As stated in the following article written for The Journal of Accountancy, "Accounting professionals who can provide proactive business advice based on real-time client data will be desired, especially for organizations led by Millennial clients, who will want their accountant to interpret data and answer questions" (Drew, 2015). Clients have become frustrated with current accounting services, as the hired firm and/or personal accountant, tend to be more reactive rather than proactive (Vafeas, 2011). Use of accounting software provides timely and accurate information, at a fraction of the cost. Due to this improvement, using the right kind of software can help different accounting professionals run be more profitable (Bellone, 1996).

Although this paper has no conducted research, it still is an examination of overall trends in the business world, including a review of other peer reviewed articles and applying them to business situations. Because of the sliding scales of hiring an accounting professional, an organization could hire a CPA, a staff accountant, or someone who is lacking training for a lower price (Rise in accounting salaries projected to accelerate, 2016; Tickell, 2009). Due to this protection, coming up with comparative concrete figures to current trends is difficult. The purpose of this paper is to examine the different reasons an organization may choose to use accounting software instead of hiring a professional. It also contains an assessment of the level of satisfaction an organization will have with the software. Public accounting firms will start to feel the pressure to adapt to the changing environment if there is hope to keep up with competitors (Drew, 2015).

To understand the potential for technology to replace humans in the accounting profession, one must discuss the needs and cost tolerances of organizations. Every business has accounting needs, but the type of needs, they have can be different. For example, it is not difficult for the average business owner to properly account for the basic purchase of a long-term asset. However, making a judgment on how to handle depreciation, the allocation of other costs, and many...