The Effects of Computer on the Accounting Profession

The Effects of Computer on the Accounting Profession

There has been a lot of observations and comments on the effect of computer as it relates to the accounting profession in Nigeria. According to professor Longe “Computers are being used to assist in the management of major areas of the computers are under utilized and in several areas the uses are yet rudimentary”. In the accounting yet rudimentary”  story is the same.  It has, therefore becomes necessary to know the effect of computer on the accounting profession, to determine whether computer does have effect on the accounting professional and perform task with maximum speed and accuracy which will make the job of the account staff a lot easier or they are under utilized, despite the immense benefits derivable from their optimum utilization.

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With the advent of computer-based accounting system, accountants have to cope with the resulting complexity of the flow of information through the accounting systems. Traditional accounting procedures did not accommodate the sophisticated processing devices that came with the computer-based accounting system.
As the design of the computer based accounting system advanced from simple clerical automation to complicated integrated information systems, the accountant could no longer perform his duties around the computer but found it necessary to develop procedures to cope with the new challenges.
Furthermore, the traditional accountant was  not trained in the special languages and devices used in the computer based system.  Accordingly, a chartered accountant and professional organizations to educate the accountant to functions effecting in a computer based accounting system.  Therefore in the course of the study. Efforts will be made to establish  the effect of computer on the accounting profession.
Finally, I have the conviction that he efforts expended in this study will be a worthwhile investment.  This is further strengthened by the fact that this study will serve a springboard and basis for further studies on the relationship between the computer and the accounting profession and other related topics in the future.

Manual data processing has existed as long as man has walked this planet.  It continuous to exist today in every organization and  is  major form of data processing for many small business firms.  The earliest methods of manual data processing included the use of fingers, stones and stick for counting and knots on a string, scratches on a rock or notches in a stick as record keeping devices.  The Babylonians wrote on clay tablets with a sharp stick, while the ancient Egyptians developed written records on papyrus using a sharp pointed reed a pen and organic dyes for ink.  The earliest form of manual calculating device was the Abacus.  The use of  pebbles or ords laid out on a lined or grooved board were early forms of the Abacus and were utilized for thousands of years in many civilizations.  The abacus in it present form originated in china and still a widely calculator.
Manual data processing techniques contributed ot progress over the centuries due to developments such as Arabic numerals, the decimal system, the manufacture of paper, the printing press, the slide rule and  double –entry book keeping to name a few.  Manual data processing systems of today employ tools and materials that have been used for several hundred years such as pencil, pens, rulers paper record keeping, forms, folders and filing cabinets.
More recent development which have been tools and materials such as multiple copy forms, carbon paper, accounting pegboards and notched cards.

The  information system of any organization can include manual data processing systems if information, requirement become more complex and the volume of data increases, mechanical data processing systems become more efficient and economical.  In manual data processing transactions can be recorded easily in a human-readable form and changes and correction to such systems can easily be made.  Manual  data processing is also quite in expensive at low volumes.
The major limitation of manufacture data processing include its inability to handle  large  volume of work and its reliance on many cumber-some and tedious methods. It is also more susceptible to error and slower them other data processing methods because it depends on human effort for most data processing operations.

Accounting procedures are naturally complex and are becoming increasingly more sophisticated and so it becomes more necessary wanting to know how computerization has helped in resolving this complexity and also to get to know of it holds any greater promise for the future in the field of accounting.  There is the need also to know if it hold any risk of aiding perpetrators of frauds in order to weigh its against benefit.  It also seeks to identify how the personnel conduct their activities in an accounts department without computers and how it is different when computers are introduced.  “ I am quite sure that many people would have been amazed the way computer process millions of inputes at a very short time. For instances  an IBM system 370/145 model II computer can process a company’s journal, Asset register, balance sheet, trial balance, profit and loss Account,  Departmental statements, age receivable and customers account receivable approximately in 10 minute, 24 seconds every month”.
This recent development in the practicing accountant which has let him to hiring the services of a computer expert for audit purposes.  Does the computer displace the accountant with a computer scientist?
Sometimes the auditor looks frustrated watching the computer as a fast beas perform the job of an accountant and selfishly stores them on magnetic tapes as invisible magnetized spots.  In addition to this problems, the electronic accounting systems are usually designed by systems analyst and programs who are in most cases non accounts.  This makes the accountant a stranger to the system he is to audit, unlike in a manual system.
Furthermore, the accounting information processing procedures are stated in computer programs which are written in special computer languages and stored on machine-sensible medium.  Where on-line integrated systems are in use, audit trail may not be in existence, these make the auditor to be lost in the mist of computer processed data.
How can all these problems of the computer be surrounded so as to return accountants and make them offer more qualitative job to the firm and the public in general instead of the computer scientists or economists with computer knowledge.  These are the problems the study shall be focused at.

The objective of this study is to:

  •  Highlight the importance of computer and it relevance accountants To 2    convince Accountant without previous knowledge of computer programming to take a course on computer programming in order to combine their accounting experience with their knowledge in computer operating to make the computer always be under their absolute control
  •  In pursuance of his duties, the auditor may come across accounting statements prepared by a computer, especially by large business organization.  Thus, the auditor also needs to lean about computer programming.
  • To provide a guide for organization that need to understand the benefit of computers.
  •  To provide a resource material for accountants and students of the profession relative to the advantage of computers
  • Identify the major areas of computer application in accounting
  •  Establish the various forms of accounting operations in which computers could be utilized
  •  Highlight the unexplored potentials of the computer necessary for the efficient and smooth operation of the commercial banks as far as customer services are concerned.
  • To encourage a continued investigation of the relevance of computers in the financial sector of the third world countries
  •  Finally to emphasize that computer is o way a threat as thought by non professionalism but rather an aid to the accountant, as it enables him perform his accounting duties quickly and accurately.
  • These are the points the research will focussed on the effect of computer on the accounting profession ( a case study of Asaba Aluminium company, delta state.)

This study “Effect of computer on the accounting profession ( A case of the Asaba Aluminum company, Delta state) will educate the entire public how computer aids the accounting profession.
The world is fast turning into a global village with the rise of satellite communication, the internet and specialized  software in very competitive financial environment.  This study is significant in that it mains at increasing the awareness of our leverage on computerization.  If the company’s financial market must be further opened and stay competitive and profitably so, the computer technology might just hold the key.
In recent times, there has been increased demand in the knowledge and application of the computer for processing data. This has become necessary in the face of unique position that computer occupies today in organizations with which most calculations and data processing are handled.
Such a lot of the accounting boarder-some processing large volumes of data, there is need therefore, to find out in the study the various benefits associated with the use of computers in accounting.
The study will not seek to justify the huge amount invested in computer, but also try to show the reward and meaningful development or improvements in terms of times saved, less clerical and laborious manual entries from the use of computers than any other mechanical automated machines.
As immediate and future computer users in this company, accountant need a basic understanding of computers and how they can be applied to the management and operations of a business enterprise.  Therefore, they need to be introduced to the fundamentals of computers and electronic data processing, wide range of hard-ware and soft-ware that process of computer programming and the “high level programming languages that are utilized by the computer-using business firms.  However, and more importantly they need  the basis concept.

1.    System analysis and design
2.    Management information system
3.    Computer – application in business and
4.    The management of the computer

Computer is significant as we find out that he many uses of computer have something in common, looking at other fields now, including accounting, there are various way in which computers are sued.  Some of the computer application are:
–    Department store credit accounting
–    Banking telephone dealing assistance
Inventory control, crime prevention, analysis of construction specifications payroll calculation industrial process control, space light, projection of fashion trends, theater and air line ticket reservation, insurance, securities brokerage accounting assistance in education, modeling and simplification, library cataloging and retrieval, monitoring status of hospital patients, matching job applicants, urban traffic control warfare, artificial intelligence astrology, art and music.
Behind all these storage and manipulation of data is the need to communicate ideas to produce a certain image in the mind of a person, or to inspire a person to act in a certain way.
For instance, a banker could decide to approve a loan simply on the basis of a credit report produces by a computer.

This study “the effect of computer on the accounting profession is structure to
1.    Focus on the introduction of computers and their application into accounting operations in an organization
2.    To highlight the benefit offered by such application and weighing it with the risks associated with these application
3.    It is not an attempt to discuss accounting software perse, but to show how their use can accelerate the operation of accounting procedures and enhance the assignment of the accountant as professional.

This topic, Effect of computer on the accounting profession (a case study of Asaba Aluminum company, delta state) should have covered the Aluminum company indifferent state, but it is due to some unavoidable constraints some of which include;
1.    TIME:  Time limit set for the compute completion of the work. That is this study is carried out under a limited time.  Having to cope with assignments to lectures here and there, course work and examination was not an easy task especially having to measure up with the high standard of the department in particular, there by reducing, the physical and mental contributions which I would have wished to put into the study.
2.    FINANCE:  This constant was the most serious of all.  It restricted the number of journeys made to my research center to collect data which led to narrowness of the scope of the study.
3.    INADEQUATE FACILITIES IN THE LIBRARY: inadequate facilities in the library such as modern textbooks, journals, news magazines and other materials almost thwarted the effort of the researcher. These materials are supposed to be a pre-requisite for successful project work.

The analysis of these problems of this research work will raise certain important questions, which the researcher intends to prepare to answer.
1.    What is the effect of computer on the accounting profession in Asaba Aluminium Company?
2.    Has the inventions of computers led to job creation or job displacement of accountants?
3.    Does computer increase the job shill and marketability of accountant?
4.    Is computer an aid to the accountant?
5.    If yes, what are the needs and wants that are now being satisfied in this company?
6.    Does the maximum speed and accuracy of computers make the job of the account staff a lot easier?

Ho: there is no effect of computer in the accounting profession in Asaba
Aluminum company
Hi:  There is effect of computer in the accounting profession in Asaba Aluminum company effect of computer in the accounting profession in Asaba Aluminum company
Ho: computer does not perform task with maximum speed and accuracy that will make the job of account staff a lot easier
Hi: computer perform task with maximum speed and accuracy that will make the job of the account staff a lot easier.
Ho: Computer is a threat to the accountant
Hi: Computer is an aid to the accountant.

(A)    COMPUTER: computers are electronic machines which under programme controls, can accept data, process the data and give out accurate information with regard to that set of data.
(B)    PROGRAMME: is a set of instructions which feel a computer in logical sequences on how to solve a given problem.  These instruction are written by programmer.
(C)    ACCOUNTING SYSTEM; is defined as the collection of method basis and principles adopted by an organization for the preparation of its financial  statements to satisfy the need of the users.
(D)    OPERATING SYSTEM: the permanently held programmes which control the sue of applications programmes and provide standardized facilities to the facility.
(E)    HARDWARE: this refers to the six physical element making up the computer eg backing storage, arithmetic and logical unit, immediate access stores, input device, output device and control unit
(F)    SOFTWARE: these are programmes that inject life if not systems or set of instruction and data which feeds the computers  hardware with what actions to take.

(G)    MAIN FRAME COMPUTERS: these are large general purpose computers with extensive processing storage and input and output capabilities.
(H)    MINI-COMPUTERS: these are physical small compare with main frames and tends to be used for special purposes or small scales general purposes

(I)    MICRO COMPUTERS:  these are relatively low cost computers used by a single user.

(J)    ON-LINE:  These refer to the peripheral devices or equipment that are in direct communication with the central processing unit of the computer.  It is the opposite of off line.

(K)    SYSTEM ANALYSIS:  it is the process of studying the operations of an organization with the intent of defining data processing problems and designing a system that can be applied to the computer.
(L)    COMPUTER PROGRAM: A computer program is a set of computer instructions which are sued for solving a specific problem.


A common but unwise approach to selecting a computer  system to handle an organizations’ accounting and management information is to buy a powerful, expensive computer first and then select an accounting software, package to fit the hardware.  Another unwise approach is to purchase accounting software and then stop for the supporting hardware.  While both approaches may work eventually they are likely to be very time consuming and costly.

Instead, a management accountant should begin by figuring out exactly what management wants the accounting information system to accomplish by analyzing the organizations accounting and business reporting needs  and determining the possible ways to meet those need.


The increasing complexities and abrasiveness of the business environment that characterized the late 80’s, couple with the declining markets and the recognition of information as an important marketing asset have accelerated the urgency for information management.  Consequently the modern business society is becoming more and more computer dependent.

An important aspect of the impact of computer revolution on the business society which has experience tremendous upswing since the early 1970’s. this view is supported by existing statistics on computer frauds in 1950’s 63 cases in the 1960’s and 569 cases in the year 1970-1975 (Parker, 1976).  In Nigeria cases of  large scale computer frauds has been recorded in the bank of credit and commerce international (Donwa 1991).

Given the nature of fraudulent practices at both the public and private sectors of this economy and the quantum leap in acquisition of computer systems by these organizations it had become  necessary to examine the issue of computer frauds and possible remedies as we rush to embrace the diffusion of computer revolution into our society.


Hornby (1974) defined fraud as criminal deception.  Bennet (1930) felt that fraud involves all acts, dishonest or deceitful, the object of which is to deprive sole persons or corporation of property without knowledge or consent of the owner.  Despite the differences in semantic the two definitions given above seem to emphasize the fact that fraud entail “ causing a person to accept as true what is false”, the object of which is to cheat another person.

Computer fraud is invariably committed for financial gain but unlike some forms of fraud, the perpetrators will make forms of fraud, the perpetrators will make considerable efforts to prevent discovering of any loss by the victim.  The rewards for such efforts may be complete freedom from prosecution at lest a delay in discovery of the fraud and consequent chance of escape computer systems are particularly vulnerable to fraudulent activities because much of the time processing and its results are hidden


To extract money from a financial accounting system required its diversion into fictitious, but accessible accounts.  To avoid detection appropriate adjustments.  Must be made to ensure that the accounts still balance some times, fraudulent activities may involve the misappropriation of goods rather than cash.

BOGUS DATA ENTRY: this may involve entering additional unauthorized data, modifying valid data or preventing its entry altogether.  Such activity may take place during the data preparation or data entry stage.
BOGUS OUTPUT: output may be destroyed or altered to prevent discovery of fraudulent data entry or processing.
ALTERATION OF FILES: for examples an employee may alter his salary grading in the pay roll file or adjust the amount owing in a colluding customer’s account
SUSPENSE ACCOUNT: rejected and un-reconciled transactions tend to be allocated to suspense accounts until they can be dealt with.  Transactions can be tampered with at the input stage to ensure their rejection and allocation to the suspense personal account.


An organization can minimize the risk of computer fraud by:

Controlling access to computer hardware in centralized system with a limited number of specialist staff access can be readily controlled.  On the other hand, if power is  concentrated in the hands of few staff, ten the opportunities for undetected fraud are increases.
Auditing of data and procedures, until hard copy, is produced the contents of files remain invisible and a number of auditing techniques can be used to detect fraudulent entries or changes.
Careful monitoring of the programming function – program patching can be controlled by division of the programming task so that an individual program can be detected.

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The Effects of Computer on the Accounting Profession

4 Comments on “The Effects of Computer on the Accounting Profession”

  1. thanks a lot for your support and assistance may the Lord jod coninue to bless you and strengthen you. But please can i have any article on THE IMPACT OF COMPUTER TECHNOLOGY ON ACCOUNTING SYSTEM AND ITS EFFECTS ON EMPLOYMENT

  2. Geri Stotts says:

    I would like to “quote” a sentence in this article. But I cannot find the correct information to cited your work.

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