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Technology in Accounting: The Growing Role of Technology in Accounting

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  • 0:08 Accounting - The Early Years
  • 1:17 Technology and Accounting
  • 4:30 How Has Technology…
  • 5:31 Lesson Summary
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Lesson Transcript
Instructor: Rebekiah Hill

Rebekiah has taught college accounting and has a master's in both management and business.

Change and technology go hand in hand, especially in the accounting industry. In this lesson, we will take a walk back in time and discuss some of the technological advances in accounting through the years. We will also discuss how these changes have affected the accounting process.

Accounting - The Early Years

Ugg, Cleo, Ruth, and Bob are all accounting professionals.

Ugg was an accountant thousands of years ago. Each day, he came to work armed with a hammer and a chisel.

Fast forward a few thousand years to Cleo. Cleo was also an accountant, but she didn't use a hammer and chisel to carve entries into rock. Times had changed. She had the luxury of using a quill, a pot of ink, and a scroll.

Moving on in time, we come to Ruth. Ruth was an accountant in the early 1800s. She worked in a time where paper and pencils existed. Even though she still had to manually write down every transaction, she had the luxury of recording them in ledgers.

Now we come to Bob. Bob is an accountant in the current day. He spends his time putting information into a computer system. It only takes a few clicks of a mouse, and all Bob's work is done. Since accounting became a profession, the tasks associated with completing the accounting process have not changed, but the tools used to complete it have. We owe that change to technology!

Technology and Accounting

When we look at Ugg, Cleo, Ruth, and Bob and their accounting experiences, what do you see? Do you see how the physical part of the accounting job became easier as time passed? That's because of technology. The word technology refers to anything that is man-made that makes a process easier to complete.

For the most part, when we mention technology, we think about big-ticket items like industrial machines or computer systems. While those are examples of technology, there are smaller things that are good examples as well.

Think about Ugg. He lived in an age where symbols were used to represent words. In order for him to perform his job, he had to use a hammer and chisel to make marks on the wall of a cave. That may not seem like a bad thing, but would you want to try it?

By the time Cleo came along, there had been advances in the accounting industry. She didn't have to use a hammer made of rock and a sharpened stone as a chisel to record accounting information. Somewhere in between Ugg's time and hers, someone had discovered a new use for sheep hide, and parchment was created. That wasn't the only technological change that had been made. Cleo had ink that she dipped the bottom end of a feather, which is called a quill, in. She could actually write on the parchment and then roll it up for safekeeping.

Accounting tasks for Ruth were a little simpler still than both Ugg and Cleo. Of course, more technological changes had occurred during the time of Cleo and Ruth. First, paper was created. Paper was followed by pencils. For Ruth, the ability to use a pencil to write on paper made her accounting job much simpler than Ugg's or Cleo's.

Last, but certainly not least, is Bob. Bob works in the modern-day accounting industry. Of course, Bob has paper, pencil, and ink, but that's not all. He also has a few more tools to work with, like adding machines, printers, fax machines, computers, and the Internet. For Bob, the hardest part of his accounting job is making sure that he keys the right numbers into the accounting program on his computer. Bob also has the benefit of being able to save financial information in several places. Of course, he can save a paper copy of the financial reports in a file, but he also has to save them to the hard drive on his computer or to a portable storage device. He can even choose to save files in the cloud.

What's the cloud, you ask? The cloud is a group of computers known as network servers that provide a virtual place to save and store information. Information saved in the cloud is accessible from anywhere that a cloud user is.

For example, if Bob had to fly from his office in New York to a company in Singapore, he wouldn't have to carry armloads of files just to be able to access financial information that he may need. If he saved the information on a portable device, like a zip drive, or in the cloud, Bob would be able to access it no matter where he was! Thanks to technological changes, Bob's accounting experiences are much easier than Ugg's, Cleo's, or Ruth's.

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