What impacts are emerging technologies such as the Internet of Things, Blockchain and Big Data having on the Accounting profession and IT departments of companies?
This should state what the purpose of the report is, why these technologies are important for the Accounting profession.
Analysis main body of the report define each of the technologies, outline their purpose and application generally, consider impacts on and the externalities, impacts on accountants and companies specifically. Impact on skills required, different analysis that can be undertaken, support provided by this information to the balanced scorecards of companies
This section should reflect upon what you stated in the introduction i.e. what you have done and what you found. The conclusion is about closing the report and NOT introducing new material. Consider impacts on Accountants, what the accounting bodies are doing any initiatives from the Big 4 Accounting firms)
The presentation will carry a total score of and will be based on how well students demonstrate the following presentation skills:
Introduction and Purpose of the Report
Internet of things, block chain and the big data are three emerging technologies. It has been gaining an enormous attention in the areas which are beyond the crypto currency roots. There are immense opportunities associated with the internet of things, block chain and big data and it facilitates the power which provides the solutions and innovative ideas to enhance the profession of the accounting and the Information technology department of the company. (Ghosh, 2017).
The internet of things is the network of the physical devices around the world which are now connected to the internet. The network may also include the vehicles, home appliances, and other embedded items which are associated with software, sensors, connectivity and actuators. For example a light bulb which can be operated using a smart phone is an example of the IOT device (Libby, 2017). Other examples can also include the motion sensors or a connected street light. A smart phone or the fitness band is usually considered as the internet of things. These devices are used to connect and exchange the data, which also enables them to integrate more opportunities via integration of the physical world into computer based systems which results in efficiency and improvements, economic benefits and decreases the human pressure and exertion. In the year 2017 the number of the IOT devices has increased 32% year by year to 8.3 billion in 2017. It has also been assumed that the number of the devices will reach to 32 billion by the year. The projections talk about the $7.1 trillion by 2020 in terms of the global market value (Maass, et al 2017).
As the internet of the things collects the data form the multiple sources, whether the data is transactional or from the ERP, there is always the greater influx of the available data whose incorporation is required into the reporting systems. The supply of the data is available and displayed through the intuitive dashboards which can help to greatly aid the process of the planning and the decision making (Kalita, 2017). The internet of things will also impact the business processes and the field like invoicing and reporting. For example the behavioural information in the areas of the buying preferences is allowed by the internet of things. Internet of things will also impact the way the audits are carried out and it is beneficial for the risk management and the detection of the issues.
Internet of Things
Internet of things also helps in providing the advice to the clients to save the time and provide the expertise in the field of the accounting. As the Internet of things is providing the more scope for the accountants to analyse the financial matters and puts them in the stronger position. The internet of things has numerous implications for the accounting sector, the top accounting officials are aware about the trends and they like to adapt the changes and incorporate the same to leverage it for the future growth.
The pace of change is remarkable and yet the internet of things is quite simple. The internet of things has taken over a huge jump in case of the accounting environment (Wollschlaeger, Sauter and Jasperneite, 2017). It is beneficial to the professionals as they can seek the clients through the data connectivity and also the introduction of the tie in company and its services from the nearby banks and development of the cloud ecosystem for payroll, accounting and other management services.
In case of the IT department of the companies the internet of the things is usually going to act as a producer and the consumer. The more personalised a curated offerings are provided by the internet of things and market leader can harness the value associated with the internet of things. The internet of things presents the opportunities for the industries to expand themselves and to reshape the boundaries and the competition (Chen, 2017). The base of the products can be changed from discrete and basic nature products to highly customised products. To deliver the full potential on their own the technological department of the company will have to collaborate to establish the position against the industry standards. For example the ford company is involved in reshaping and making the compatibility standards more innovative through its acquired Livio and the Smart device API being shared (Majidah, Isynuwardhana and Anna, 2018).
One of the ingenious inventions is the block chain which is commonly known as Satoshi Nakamoto. Due to its rapid evolution every second person is inquisitive about the term block chain. Block chain refers to the type of data ledger of the crypto currency which is structured and is used to identify and track the transactions digitally. The relevant information is filtered and shared across the distributed network of the computers. It is a continuously growing list of records in the form of the blocks which are secured using cryptography (Peck, 2017). A cryptographic hash is present in each block, a timestamp and the transaction data. In the simplest manner the block chain can record the transactions between two efficient parties and in a most verifiable and the permanent way. These block chain are secured by the design and a computer system which is distributed with high level of the byzantine fault tolerance.
Block Chain
The mode of the block chain is very simple. It uses cryptography to create a network where each user is able to manipulate the digital ledger securely and there is no need of the central authority. Once a ledger has been stored it becomes very difficult to alter the same due to permanent time stamping and security mechanism.
On the other hand the accounting profession can be enhanced by the usage of the Block Chain, which also helps in reducing the cost of maintaining and the reconciliation of the ledgers can also be saved. It has the potential to impact all the recordkeeping processes, including the initiation of the transactions. The impact on the back office activities such as reporting of the financial statements and the preparation of the tax returns (Shorfer, 2017).
Both the role and the skill sets may change as there is an emergence of the new block chain techniques and the processes. For the purpose of the audit evidence the auditor need to vouch both the traditional ledgers as well as the block chain ledgers (Arora, and Yadav, 2018). This will ensure the greater standardisation and the accounting process will become more transparent.
In terms of the IT department the block chain provides the security measures and increases the security of the department to keep the confidential data safe and secure. Block chain is also used to extend the value chains and streamline the contract enforcement. This technology can help in preventing the data from theft (Nofer, Gomber, Hinz and Schiereck, 2017).
Block chain technology has been used to create a decentralised platform and to give the authorised user an easy access and the data is safe from being utilised by the wrong and unauthorised users (Tapscott and Tapscott, 2016). But most of the times the data once stored can never be erased and since no gaps are remaining and the blocks are linked together.
Big data refers to the set of the data which are big and complex which seems almost redundant in case of data processing application software which is of conventional nature. Essentially the big data is composed of the four V’s which are volume, variety, veracity and velocity (Pham, 2015).
Volume: the volume determines the quantity of the data and its extensive nature when compared to the conventional data.
Variety: the origin of the data is through multiple sources which also includes the individuals.
Big Data
Velocity: The rate of the formation of the data is termed as the velocity.
Veracity: A critical analysis of the evaluation of the data is also required.
With the help of vigorous assessment techniques, big data can assist the entities in expanding their assets in the form of data. In order to do so, the professionals of the accounts department need to determine the value of the each data. The next step is to choose a valuation technique and lastly the key drivers are identified by the professionals. There are different types of controls implemented (Sledgianowski, Gomaa and Tan, 2017).
To get a support in real time, the big data is utilised in making decisions for specific support. Due to advancement of the services and the recovery of data is time consuming, there is a variation in the services provided by the accounting professionals and their liaison with the decision makers. Therefore big data has a great impact on the accounting professionals and services provided by them.
Data sharing will also result in creation of the value. With the help of the accounting professionals both the internal and the external data movement can be improvised.
To accelerate the efficiency the data sharing will save the cost and the money. However big data is prone to certain challenges. Since there is a wide range of the data available for the access big data is depreciating rapidly. Moreover the value of data also diverges and it also depends upon the usage. The demand can be eroded through the process of the self service and the automation.
In the transformation of the program the role of the data analytics is huge and it is transforming the data of the audit program. It help in institutionalizing the entities which seek ways on how to revamp the ratio of the cost benefit to the internal audit function which is also known as the idea if the continuous audit. The activity of the compilation of the audit evidence and the security cover given by the internal auditor on different process of the information technology and the systems and the controls also helps in integration of the process of the risk assessment.
An average business user will be benefitted by the occurrence of Big Data promises and democratization of Data Analytics, such data can be handled by the comprehensive Information Management. If the sources of data is credible enough than the quality of data is also assured hence the process data solutions would become speedy and easy to handle
Impacts on Accounting Profession
A comprehensive Data Management has a huge and a large impact on customer relations to supply chain operations. It can be understood by the example of the world’s largest retailer; Wal-Mart. Wal-Mart is the most common user of data analytics in today’s world. In early 1990s a reform took place by the way of recording each and every product in the data system named as retail link. The system paved the way to suppliers by monitoring their data in the form of inventory turnover, inventory volume, gross margin, in-stock percentage. As a result the risk of inventory and associated cost became reduced which results high levels of efficiency which resulted in productivity of the retail merchandise? Hence the Big Data Technology has the capacity to manage the data accordingly and to deliver with good data governance strategies to the overall structure of effective Enterprise Information Management (Song, and Gnyawali, 2017).
Conclusion
From the above analysis it can be concluded as the big data, block chain and the internet of things are the three applications that are used to advance the accounting sector and the information department of the company. Their contribution has made the advancements and helps the companies in making them potential and resilient to overcome the obstacles. Yet even after having the positive impacts it is also associated with some negative impacts and cumulatively the impact falls on the positive side (Ernst and Young, 2018). Furthermore, the block chain and internet of things are effectively working in escalating the business, communications and building up of the network for future enhancements.
References
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Kalita, A. (2017) Internet of Things. New York: Springer.
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