Get Instant Help From 5000+ Experts For
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing:Proofread your work by experts and improve grade at Lowest cost

And Improve Your Grades
myassignmenthelp.com
loader
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Guaranteed Higher Grade!
Free Quote
wave

Pros and Cons of RPA in Accounting

Question:

Discuss about the Robotic Process Relating to Accountings.

The robotic process automation has taken a wave and is emerging as one of the fastest growing technologies in the digital arena. It is expected to replace the human effort in the accounting process and and is one of the types of technology on clerical process automation based on the concept of software based robotic systems and artificial intelligence. But, every new technology has both the positive and the negative attributes much like every coin has 2 sides (Visinescu, Jones, & Sidorova, 2017). Though the robots will be process driven and will increase the level of accuracy, the speed, the efficiency and will surely improve the level of compliance of the accounting process but the question is will it be able to mitigate all the risks and challenges which we often see in the day to day accounting operations. Even though articficial intelligence has developed a great deal in the last couple of years, but it can never replace the human because of the lack of emotions, empathy and the lack of motivation and intuition while making the business decisions. There are many such questions which needs to be answered which forms the base of this thesis (Washington, DC: U.S. Patent and Trademark Office. Patent No. U.S. Patent No. 9,555,544., 2017).

Furthermore, the objective and the rational of this study is to fid the rationality of the introduction of robotics automation process in accounting system and how far is it sustainable in the modern accounting theory which asks for decision making in complex real life situations which need to investigate from various aspects and then to conclude based on the business and IFRS requirements. It can be said that this process is a replica of the human behaviour which is interacting with the user interface of the computer. In case, this is introduced, it will be a significant shift from the traditional forms of IT integration (Visinescu, Jones, & Sidorova, 2017). This has been existing for a long period of time now in the form of screen scraping but the same has now emerged into more resilient, mature, reliance and scalable level which makes the large enterprise to believe and rely on it.

There are innumerable number of questions which needs to be answered in this aspect the most critical of which are mentioned below. The major objective of the study is to find out the viability of the technology looking at the pros and cons of RPA.

Viability of RPA in Accounting

The entire concept of RPA is based on the viualization which makes of the virtual network to execute the operations in the backend based on the user screen selection. It will therefore lead to a huge variety of costs, which needs to be seen by organizations whether the same be taken forward or not(Davis, 2017).

The second question is the agility and the fact that RPA will be a robot which will run not based on the coding structure unlike the softwares but much like the virtual worker who can be paidly trained in the same way as human trains human. This is to be done using artificial intelligence. Ther efore it now needs to be checked that whether it will be able to repond in the same manner as human and in case any new situation arises, what will be its implication and how the same can be taken forward(Willcocks, Lacity, & & Craig, 2017).

The other critical question in this aspect is the acceptance by the large organization or whether the same will be non disruptive as most of the IT technologies come with a lot of change and disturb te underlying computer systems in the organization. Because of this, they are reluctant to redesign or replace the existing systems(Belton, 2017). Therefore, the  objective and the philosophy of the RPA is to avoid the risk and complexity of such kind of changes and to keep it restricted to light iT requirements. It is built on the platform that requires the user ID and password much like the human user which is very important from the security and integrity aspect. But even this is not enough from  the security point of view and can be breached easily because of which extensive checking and testing of the systems is required.

RPA doesn’t needs extensive IT skills or technical support and has an ease of service which makes it possible to be used in business operational areas rather than the information technology departments. Therefore, it needs to be seen whether it has a business case based on the platform used and investment made.

One of the other major objective of study is its impact on the society. One of the studies shows that it is to bring new wave of efficiency and effectiveness in the global labour market. Not all, but 35% of the total accounting jobs may be automated and regularised by 2035 as per the Oxford University. Renowned enreprenur in one of TED Talks stated that the introduction of the RPA model in the labour market will somewhat revolutionse the cost of the services industry and bring down the costs heavily, driving up the topline and the bottomline of the company. It will also improve the quality of the services rendered and will offer increased opportunity to the. Thus, it now needs to be seen whether the cost benefit analysis is on the proitive or negative end. One of the other author stated that this will lead to greater levels of job satisfaction and intellectual growth as it will bring out the robot out of humans so that the mundane and repeatative jobs van be performed by the robots whereas more critical and meaning interpersonal roles can be managed by the humans(Willcocks L. P., 2017).

Challenges and Risks Associated with RPA


The major questions to be resolved in this category include is the OCR – Optical character recognition (handwritten) which is still a major problem to be resolved as a lot of companies are doing things on the paper. This is one of the huge problems which is being taken up with a number of companies. Similarly, image recognition is also one of the issues wher the computer is not able to read through the charts and diagrams. The appropriate technology is just now available now.

The other question which adds to the preference towards RPA is the direct operation of the work and information upload in the cloud environment (Alexander, 2016). Multiple users can operate at a time from different destinations working on the same data using a single secure device. But the question here is how safe the conncetion is and how can be it relied that the data will not be lost and will not be overwritten or there will be a trail of the work in the system in the automated version.

The other most important question here now is that can the robotics process automation minimise the risks and help in detecting and avoiding the frauds. The question is open as both the positive and negative aspects can be derived out of it. It very much minimises the risk by removing the inefficiencies, the human error element being a software tool and artificial intelligence driven tool. But, the risk equally increase in case the fraud has been commiteed before the transaction or accounting entry gets into the system. It is very difficult and nearly impossible for RPA to apply logics and rationale to identify the frauds and errors in the accounts and to correct the same. Hence, it results in further wrong accounting and complete mismatch and thereby increasing the risk(Kokina & Davenport, 2017). Therefore, the to avoid the same, it is a must that the human needs to review and have a final check to ensure that the frauds are detected at the right time and thus corrected immediately as RPA will be having a check only on the arithematical accuracy and the logical checks as fed in the system.

The final question here is will robo accountants be able to replace the actual accountants or will thye ever be able to set up and take the same competency levels as that of the human beings. The answer to this question is a straight no as there will always be a gap in terms of the decision making and IQ issue (Pape, 2017). The grit, the risk, the agility with which a human can make the decision and help the business depending on the case and based on the time period required, the current set of RPA does not has the expertise to attain it. The RPA is just meant for some routine jobs which are process driven and away from fluctuations, whereas with humans, the change is permanent and there can be immense number of scenarios that can be developed. In short, it can be said that if human is a set, RPAs are the subsets which will ultimately have to have the human intervention.

Impact of RPA on the Accounting Industry

There are many such questions which need to be answered before the RPAs are being accepted universally across the companies and around the globe. But, all these questions can be answered and can be mitigated thus enabling the implementation of RPAs (Bromwich & Scapens, 2016). There will be risks, there will be issues which are unforeseen during the tests, there may be scenarios which may not have been tested or even haven’t cropped up but all of it can only be tested, corrected and given effect to only when the step to implement it is taken forward. All the above mentioned questions and queries have been answered below in the literature review through a number of case studies and research.

As per the study by the Haward Business Review, most of the companies promised their employees that the process automation and the introduction of the robotics in the accounting division would not result in the lay off of the employees and thay they wold be redeployed to some complex and interesting work. One of the academic studies shows that instead of opposing this change as is generally done by the people in the organization to a modern paradigm shift, they embraced it and were not threatened. They instead embraced and accepted it whole heartedly viewing the robots as virtual team mates (Anginer & Kunt, 2014). It further found that instead of reducing the worforce, the companies focused omn achieveing more work and greater productivity using the same no. of people and with improved technology.

Whereas, they was one another group of analysts which consider this to be the threat to the business process outsourcing industry. As per this study, this will enable the company to make use of the technology to shift the processes from offshore location to the local data ecnters and retain the higky skilled process designers and replace the low skilled offshore workers. Thus, it still remains one of the important topics of debate and argument (Messinger, Rogers, & & Hawker, 2017).

The future of RPA is still subject to a lot of discussions as the first movers take a lot of uses and derive manifold synergies out of it. It might be that the BPM and RPA tools are being converged much in the same way as BPM and workflow tool s are being seen into. The Pegasystems acquired OpenSpam in 2016 can be seen as one such step in the process. Some another study by the research analysts hints towards greater adoption of the artificial intelligence units in the RPA process so that informed and greater decision making cane be enabled and inferencing can be done.

Conclusion

Process automation is the need of the hour and the rule based algorithms without compromising the IT infrastructure can expedite the back office processes in departments like finance, marketing, Human resources, audit , procurement , customer service, supply chain management, accounting including data entry jobs, creation of online access passwords, etc (Elimam, 2017). Also, RPAs can answer the basic queries to customer and employees in the natural language rather than in software codes, will be organizational specific with superior scalability and will have tailored replies to specific needs. Software robots can be trained easily and can be seamlessly deployed in the system. It can also prove to be handy in the voluminous and high transactional tasks as it can increase the speed and complete it in a fraction of seconds.


Robots have the history of being involved in powerful analytical tools or results. It provides useful insights in the current business processes. All the activities done through it can be properly logged and interpreted using a reporting tool. Thus, it can help in achieveing greater compliance and improved governance too (Varghese, 2017).

Besides providing the return of 30% to 200% in the long run in the last 12 months to the companies using the RPA, it has also been able to give the returns to the bottomline and contrasting the employees have shown increasing job satisfaction in terms of the quality of work allotted to them. Besides this it is also expected that the CAGR growth will be around 60.5% between the year 2017 and 2020. Although the entire idea of automating the processes is counted or categorized as “ business as usual”, businesses are finding it easy to implement and learn as the ICT involvement is very low in this case (Gartland, 2017). The main reason being RPA only needs to address the requirements of the presentation layer and not define the business logics or data access layer in the underlying system (Lu, Li, Chen, Kim, & Serikawa, 2017).

The only disadvantage of using RPA and those opposing the introduction of RPA in the work space are of the belief that RPA would never be able to give accuracy and decision making and would never be able to mimic the human in terms of emotional intelligence, judgement, logical reasoning and customer interaction (Knechel & Salterio, 2016). Technically speaking, this RPA work needs to be overall reviewed by the human employee before giving it a final go ahead. Furthermore, setting up the first step in automation through RPA might land up the businesses in the unexpected debts. Since the business are expected to change as per the environment, RPAs are also expected to change and get updated every now and then. In case this is being done, so overall we are maintaining the ICT environment at two different places. This means that the introduction of the RPA is not actually reducing the workload but increasing the workload and human requirement. Thus, RPAs is just a first step to the giant goal of automation or implementation of the artificial intelligence as it can thus handle clear and non negotiable requirement at the best.

Looking at the final pros and cons after the views from the experts, discussion on the topics at forums, primary and secondary data collection, following are the major advantages or the positive sides to it:

It increase and improves the efficiency of the employee and enhances the speed at which the work may be executed. It helps the employees to stay motivated all throughout as they will be getting the final review work and more quality work as compared to the repeatative and mundane tasks. Hence, this will increase productivity(Laursen & Thorlund, 2016).

It can assist manifold in minimising the human error that can sometimes prove to be costly. This risk is fully negotiated and eliminated and accuracy is ensured.

It can help in cost savings for the company in terms of increased productivity, low errors, and less manpower cost.

Lower turnover ratio of employees thus helping in employee retention.

The cons or the negatives points which crop out against the use of RPAs are:

This will lead to increase in one time cost for the implementation of the RPAs, due to businesses are apprehensive of implementing it since the technology is changing, there may be further changes in future and the fear of this being obsolete is one of the major obstacle.

Many are of the view that the implementation and the operation of the robotic process automation needs a lot of technical expertise due to which many are not being able to reap the significant benefits out of it(Rodriguez & Kaczmarek, 2016).

Since this is a major change and a completely new tool altogether, many fear that if gone wrong, it may lead to major reconciliation issues and thus disrupt the entire business processes.

Another reason of resistance to use RPA is the concern that this may replace human workers when these RPAs are actually supposed to support humans in the workplace.

All these hindrances are actually not the diadvantages but the fear of change in process and lack of understanding. This obstacles can easily be converted into opportunities with proper planning and control. Few companies have already implemented some forms of the RPAs in their businesses like Nestle, Bacardi, Ferroro and Unilever, etc in the customer automation management and supply chain management processes (Kewell & Linsley, 2017).


The potential benefits of the RPA and BPO side by side in a particular business can be seen in the above figure where in a Purely BPO interaction a company outsources its work to other KPO or company having the cost saving of 15% to 40% in 5 years alongwith reduction in business risk, increased transparency, improved customer satisfaction and other intangible benefits. On the contrary, the cost savings in case of RPA is extended to 10% to 65% as per the survey carried out by The National Association of Software and Services Companies (NASSCOM), within a period of 6-9 months. Other benefits accrued include the RPA can be set up within the business or it can be partnered with some other business services, it provides scalability, quality, accuracy and speed (Dai & Vasarhelyi, 2017). The third case is a classic scenario where the RPO is set within a BPO since the nature of work of the BPO is on same grounds. In this model, the potential cost saving will be 50% to 95% as per The National Association of Software and Services Companies (NASSCOM). RPA in BPO is a boon and adopts more often than not predictive approach and end to end integration and helps in developing an output and outcome based model. In this model, all the routine activities can be done through RPA and other decisive tasks can be done through BPO human workforce, thus helping in minimising error.

Thus, all in all, entire list of questions have been answered and more or less, it is on the positive end and it looks that the future is of RPAs and they are set to replace the routine manual tasks of the people aiming to increase their productivity. It is also aimed at increasing the monitoring activity and tracking the deviations if any, thus helping in improving the reporting of the company (Vollmer, 2017).

There have been wide studies on the topic of Robotic Process Automation but the same has been wide school of thoughts coming from people all around the world and experts. There were different methods of research applied in order to prepare this thesis and to come to the conclusion. This include both the collection and analysis of the primary as well as secondary data points. Primary data includes asking of a list of questions mentioned above from a number of persons and capturing their view based on some rationale and the logics. Further more, the primary data collection also include the 1st hand experience of the service industries and particularly the IT industries which are discovering many things in the digital space every now and then. They are venturing into advanced artificial intelligence by the use of many means and are trying to built the infrastructure to support the same.

The impact of RPA is so much so that it has the ability to replace 3 worker at the time. In less than 1 year of experimentation cycle, most of the companies have had a positive return on investment and further the cost reductions has been to the tune of 20% (Maynard, 2017).

The reaserch was also done through the companies which have already implemented it in some or the other way like Nestle and Unilever, who have also reported in the annual report of the company and the benefits derived out of it. It has been reported that the cost is very less as compared to the benefit derived out of it. Further more, it is expected that many other MNCs are going to implement the same in the shared service centres in collaboration with the BPOs by the end of 2020 economising the benefits derived out of it (Kohtamäki, 2017).

The secondary data point includes comparison of the cost benefit analysis of the RPA with the business process outsourcing centres which again are trying to reduce the costs by implementing this for all the routine tasks.


Also, it included the excerpts from the research analysts and other business experts who have commented on both the pros and cons of the RPAs in the coming future. They have also tried to highlight the opportunities available and the lack of acceptance to change and learn new things as the reason for opposing it(Bygstad & Iden, 2017).

Conclusion

As per the above study and comments and views by the research analysts, it can be fairly concluded that the field of Robotic Automation Process is one that is still under research and development and a fairly good amount of work needs to be done before it can be seen in a full fledged manner. However, considering the benefits it has got, it is sure to be introduced in almost every business and company in the coming 10 years or so. With every change, comes some resistance on account of the risks embedded in the opportunity but in case the risk can be mitigated well, the same can be utilised in a manifold way. Leveraging through RPA is a next big step in the accounting arena and a lot of industries have already introduced it. With this, they aim to optimise the cost, increase the productivity, efficiency and effectivity and shift the operations from offshore to onshore and thus, freezing up of resources.

The above table is evident of the Robotic Process Automation opportunity market. This helps in concluding fairly that the RBA is helping inalmost every industry with the specific requirements like card activation and fraud claims recovery in case of banks and financial institutions, bill of material generation in the manufacturing entity, claim processing and business case preparation in case of insurance companies, reports automation and system reconciliation in case of health care industries (Arnott, Lizama, & Song, 2017). Moreover, besides all this, RPA is something which can handle few of the critical and time taking activities in almost any industry like the vendor and customer reconciliation, bank reconciliation, general ledger accounting, invoice processing once the approval to process the order has been made in the system. It can also manage the entire process of requisition to purchase order which is time taking and takes a lot of manual effort and help the human resource function in hiring, payroll management and candidate management. Thus, all in all , it can be said that we can see a lot of activities being a part of the automation process through RPAs beingused extensively and accountants being left for other critical and significant projections, reporting and decision making tasks (Chelliah & Chelliah, 2017)

References

Alexander, F. (2016). The Changing Face of Accountability. The Journal of Higher Education, 71(4), 411-431.

Anginer, D., & Kunt, A. (2014). Has the global banking system become more fragile over time? Journal of Financial Stability, 13, 202-213.

Arnott, D., Lizama, F., & Song, Y. (2017). Patterns of business intelligence systems use in organizations. Decision Support Systems, 97, 58-68.

Bataller, C., Jacquot, A., & Torres, S. R. (2017). Washington, DC: U.S. Patent and Trademark Office. Patent No. U.S. Patent No. 9,555,544.

Belton, P. (2017). Competitive Strategy: Creating and Sustaining Superior Performance. London: Macat International ltd.

Bromwich, M., & Scapens, R. (2016). Management Accounting Research: 25 years on. Management Accounting Research, 31, 1-9.

Bygstad, B., & Iden, J. (2017, April). A Governance Model for Managing Lightweight IT. World Conference on Information Systems and Technologies, 384-393.

Chelliah, J., & Chelliah, J. (2017). Will artificial intelligence usurp white collar jobs? Human Resource Management International Digest, 25(3), 1-3.

Dai, J., & Vasarhelyi, M. A. (2017). Towards blockchain-based accounting and assurance. Journal of Information Systems.

Davis, P. (2017). Value Investing: Do Quant Strategies Measure Up? Financial Analysts Journal, 1-172.

Elimam, H. (2017). The Role of Small Businesses (Small Scale Economic Projects) in Alleviating the Acuity of Unemployment. International Business Research, 10(3).

Gartland, D. (2017). The importance of audit planning. Journal Of Accountancy.

Kewell, B., & Linsley, P. (2017). Risk tools and risk technologies. The Routledge Companion to Accounting and Risk, 15.

Knechel, W., & Salterio, S. (2016). Auditing:Assurance and Risk (fourth ed.). New York: Routledge.

Kohtamäki, M. (2017). Real-time Strategy and Business Intelligence: Digitizing Practices and Systems. Finland: Palgrave Macmillan.

Kokina, J., & Davenport, T. H. (2017). The Emergence of Artificial Intelligence: How Automation is Changing Auditing. Journal of Emerging Technologies in Accounting.

Laursen, G., & Thorlund, J. (2016). Business Analytics for Managers: Taking Business Intelligence Beyond Reporting (Second ed.). CANADA: Wiley Publisher.

Lu, H., Li, Y., Chen, M., Kim, H., & Serikawa, S. (2017). Brain Intelligence: Go Beyond Artificial Intelligence. arXiv preprint arXiv:1706.01040.

Maynard, J. (2017). Financial Accounting, Reporting, and Analysis (SECOND ed.). NewYork: Oxford University Press.

Messinger, B. L., Rogers, D. N., & & Hawker, C. D. (2017). Use of Automation and Process Improvement to Achieve a Six Sigma Level of Nonanalytic Quality. The Journal of Applied Laboratory Medicine: An AACC Publication.

Pape, T. (2017). Value of agreement in decision analysis: Concept, measures and application. Computers & Operations Research, 80, 82-93.

Rodriguez, J., & Kaczmarek, P. (2016). Visualizing Financial Statements.

Varghese, F. C. (2017). The Impact of Automation in IT Industry: Evidences from India. International Journal of Engineering Science, 5000.

Visinescu, L., Jones, M., & Sidorova, A. (2017). Improving Decision Quality: The Role of Business Intelligence. Journal of Computer Information Systems, 57(1), 58-66.

Vollmer, S. (2017). How a CFO can become great. Journal of Accountancy, 36.

Willcocks, L. P. (2017). Introduction. In Outsourcing and Offshoring Business Services. Cham: Palgrave Macmillan,.

Willcocks, L., Lacity, M., & & Craig, A. (2017). Robotic process automation: strategic transformation lever for global business services? Journal of Information Technology Teaching Cases, 17-28.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2018). Robotic Process Automation In Accounting: Pros, Cons, And Viability Essay.. Retrieved from https://myassignmenthelp.com/free-samples/robotic-process-relating-to-accountings.

"Robotic Process Automation In Accounting: Pros, Cons, And Viability Essay.." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/robotic-process-relating-to-accountings.

My Assignment Help (2018) Robotic Process Automation In Accounting: Pros, Cons, And Viability Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/robotic-process-relating-to-accountings
[Accessed 22 July 2024].

My Assignment Help. 'Robotic Process Automation In Accounting: Pros, Cons, And Viability Essay.' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/robotic-process-relating-to-accountings> accessed 22 July 2024.

My Assignment Help. Robotic Process Automation In Accounting: Pros, Cons, And Viability Essay. [Internet]. My Assignment Help. 2018 [cited 22 July 2024]. Available from: https://myassignmenthelp.com/free-samples/robotic-process-relating-to-accountings.

Get instant help from 5000+ experts for
question

Writing: Get your essay and assignment written from scratch by PhD expert

Rewriting: Paraphrase or rewrite your friend's essay with similar meaning at reduced cost

Editing: Proofread your work by experts and improve grade at Lowest cost

loader
250 words
Phone no. Missing!

Enter phone no. to receive critical updates and urgent messages !

Attach file

Error goes here

Files Missing!

Please upload all relevant files for quick & complete assistance.

Plagiarism checker
Verify originality of an essay
essay
Generate unique essays in a jiffy
Plagiarism checker
Cite sources with ease
support
Whatsapp
callback
sales
sales chat
Whatsapp
callback
sales chat
close