Top 15 Technologies CPAs Should Know about in 1996

Article excerpt

Image processing--converting from paper to electronic documents (digital images) using computer scanning--heads a list of 15 information technologies and practices that will have the greatest impact on CPAs during the coming year, according to the American Institute of CPAs information technology division.

Items are ranked based on the level of impact they are expected to have in four areas: accounting and auditing, taxation, consulting and finance and operations. The Institute's information technology practices and information technology research subcommittees, which compile the list: annually, consider how implementation in each of these areas might affect potential revenues and organizational and personal productivity and effectiveness, as well as the effect each item might have on the risks and exposures in the CPA's professional environment. Each technology also is evaluated to determine its stage of development and acceptance and level of use by CPAs ranging from new or emerging technologies or practices through those that are widely used.

The following are the technologies:

1. Image processing--converting paper images into electronic documents through scanning. Organizations may routinely transfer these digital images internally and externally, and the technology can significantly streamline workflow. However, the validity and integrity of information are key concerns for CPAs, and automated quality control over the conversion will be more important. Also, backup materials that traditionally have been available on paper may be absent.

2. Electronic data interchange (EDI). This is the automatic electronic execution of routine business transactions between two or more business entities in a standard format, with greater reliance on third-party and software controls over transactions and data files. EDI represents a significant departure from traditional business practices. The risk to data increases as computers become more involved in the transactions than people, and business partners will have to pay close attention to compliance with contracts. CPAs working with electronic data must consider the competency and sufficiency of a solely electronic audit trail.

3. Security. CPA firms, companies and other organizations need to establish policies, procedures and methods to limit access to information systems to authorized users.

4. Electronic commerce--the use of computer and communication technologies to link multiple enterprises. This helps maintain a company's competitive advantage by providing accurate and timely operating information. When dealing with electronic commerce, auditors need to consider the sufficiency of the audit trail and assess the risks and exposures for system controls.

5. Communications technologies--the process of packaging and transmitting data, text, voice or video information using a combination of technologies such as modems, networks, gateways and satellites in a seamless manner. The technologies allow businesses to decentralize their physical operations and expand their marketplace worldwide. Access to information requires additional preventive controls: Communications technology often presents security problems.

6. Workflow technology. …