Academic journal article Journal of Accountancy

How CPAs Count on Computers

Academic journal article Journal of Accountancy

How CPAs Count on Computers

Article excerpt

What to buy now and what to expect in the future.

In the world of computers, the only constant is change.

Given how heavily the accounting profession has come to rely on computers, this ever-changing scene is a mixed blessing: While the advances in technology continue to make difficult and repetitive accounting tasks easier to accomplish, the rate of change often is forbidding-and expensive.

The following pages present an assessment of the current state of computer technology and a preview of how tomorrow's technology probably will reshape the work habits of the profession.

THE COMPUTER OF CHOICE

In the accounting profession, as in the rest of the business world, the microcomputer, or personal computer (PC) as it's now called, is king. While the larger minicomputer certainly isn't dead, it no longer is the purchase of choice. The only buyers who may take exception are those who operate huge databases. Today's PC does almost anything the minicomputer or the even larger mainframe can do--only it does it cheaper, usually faster and in less space. In the years to come, it's likely the PC will become so powerful it will handle any job its larger counterparts can do--and more.

Intel Corp.--the company that developed the so-called computer on a chip, which made the PC a rival of the mini and mainframe--has increased the PC's power significantly with its new chip, the Pentium. Pentium is the trade name for the microprocessor in the latest generation of PCs, generically labeled the 586. It replaces the 486 microprocessor.

What makes the 586 special? The major attributes over the 486 are speed; ability to handle multiple media (video, animation and sound) and to multitask (perform more than one task at a time); and memory capabilities. Poised for introduction (probably by next year) is the 686, which some wags speculate will be called the Sexium. Preproduction models have been completed, but little has been disclosed about its properties, except that it, too, likely will be a major technological leap forward.

Surely all this upgrading is good news for the computer industry, which profits handsomely when customers invest in new, more powerful machines. But what does it mean to most CPAs, who generally run tax preparation and accounting software, spreadsheets, databases and contact-management programs and probably share files with colleagues down the hall, across town and at the other end of the continent? Should they junk their 386 computers and buy either 486s, which are available now, or the even hotter 586s, which are just starting to be shipped? Or should they wait for the 686s before making a move?

For accountants who already have 386-c1ass computers and are satisfied with their performance, it's probably prudent not to invest in either a 486 or a 586 now. At most, accounting programs will work faster with the hot, new machines but not significantly better. Another reason to delay is prices for the 486s and 586s are at premium levels because they are new; in fact, 586s probably will be in short supply for a while. By year's end the prices of 486s probably will drift down to where the bargain levels of 386s are now. An indication of how swiftly changes occur in the computer industry is that some manufacturers already are closing out their 386 production and shifting to 486 and 586 models.

However, for some applications, waiting is not the best move. If an office wants its new computer to work as a server--the workhorse for a network system--or to handle high-tech projects, an immediate upgrade is warranted. In these applications, the faster and more powerful computers will add more than a little zip to a job. Here are some of the high-tech projects that benefit from more powerful hardware:

* Document image storage and retrieval. Stacks of documents--from tax returns to audit support statements and even photos--can be digitized and stored in the computer, eliminating the need for paper files. …

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