New Era University

College of Accountancy
No. 9 Central Avenue, New Era, Quezon City

INFORMATION MANAGEMENT & CONTROL

4-BSACT

“The Impact of Information Technology to Financial

Accounting”

GROUP 3

LEADER:

CAÑERO, KURT VON RAVEN M.

MEMBERS:

DAYAON, ELISEO JR. B

GALIZA, FRANCES ELAINE B.

GARCIA, MA. GIZELA B.

MACALINO, TRISTAN JAMES D.

PLACIDO, RIZZA MAE T.

RAMOS, SHAIRA J.
THE IMPACT OF INFORMATION TECHNOLOGY IN FINANCIAL ACCOUNTING

Today, modern technology has paved a lot of opportunities for businesses. With the progressive
evolution of Information Technology, computers, servers, Internet, and other digital devices have
influenced how the companies operate their businesses. Applications of such, SAP, Oracle, Sage,
and the likes are being used to mitigate business risks and increase productivity and
effectiveness. One of the biggest contributions and impact of IT to accounting is the availability
of using computerized systems and automatic functions for businesses. Such as tracking and
recording financial transactions, inserting PO's and invoices, and other processes. Not only it
helps the company’s processes, it gradually helps the management for decision making, and
strategic planning with the access of research and development supported by IT through Internet
and online resourcing.

The major objective of financial accounting information systems is to provide relevant

information to individuals and groups outside an organization’s boundaries—for example,
investors, federal and state tax agencies, and creditors. Accountants achieve these informational
objectives by preparing such financial statements as income statements, balance sheets, and cash
flow statements. Of course, many managers within a company can also use financial reports for
planning, decision making, and control activities. For example, a manager in charge of a
particular division could use such profitability information to make decisions about future
investments or to control expenses.

The invention of an automated accounting system means that the financial information reaches
their targets more easily which makes the information more useful. Automation also means that
their records may be held on the cloud which means that the managers and such may work
anywhere long as there is a means to connect to the internet. An automated accounting system
also makes it so that the company’s workload lessens by virtue of their work being easier and
faster, information taking up less space on their offices which leads, to some extent, energy for
workers by virtue of a cleaner workplace.
Computerized Accounting Systems
The biggest impact IT has made on accounting is the ability of companies to develop and use
computerized systems to track and record financial transactions. Paper ledgers, manual
spreadsheets and hand-written financial statements have all been translated into computer
systems that can quickly present individual transactions into financial reports.

Most of the popular accounting systems can also be tailored to specific industries or companies.
This allows companies to create individual reports quickly and easily for management decision
making. Additionally, changes can be made relatively easy to reflect any economic changes in
business operations.

Increased Functionality
Computerized accounting systems have also improved the functionality of accounting
departments by increasing the timeliness of accounting information. By improving the timeliness
of financial information, accountants can prepare reports and operations analyses that give
management an accurate picture of current operations. The number of financial reports has also
been improved by computerized systems; cash flow statements, departmental profit and loss, and
market share reports are now more accessible with computerized systems.

Improved Accuracy
Most computerized accounting systems have 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.

Accuracy is also improved by limiting the number of accountants that have access to financial
information. Less access by accountants ensures that financial information is adjusted only by
qualified supervisors.

Faster Processing
Computerized accounting systems allow accountants to process large amounts of financial
information and process it quickly through the accounting system. Quicker processing times for
individual transactions has also lessened the amount of time needed to close out each accounting
period. Month- or year-end closing periods can be especially taxing on accounting departments,
resulting in longer hours and higher labor expense. Shortening this time period aids companies in
cost control, which increases overall company efficiency.