The size of the accountancy firm will influence the difficulty and sophistication of Information Technology. A large firm has more complex information flows than a small firm. Therefore, if it is to compete successfully, it must have a more complex information system. Therefore, for small firms this will all up to huge costs for computer equipment and software. Large firms on the other hand can afford to put forward huge costs and supply financial information through the computer system. Resources can be shared in different departments of the accounts firm, which makes work more efficient and time saving.
In our increasingly complex society computers are being used in business more and more. They can be used to process information on which to base decisions as well as a storage system making information readily available. It is reasonable to say that, without the power of computer systems, today's modern business world could not function. One particular organizational function they facilitate is marketing
Such things as invoices, stock checks, purchase orders, prepare payroll, purchase progress reports and other standardized document forms can be exchanged directionally between computer systems instantaneously for automatic processing. This system saves money (it is cheap, paperless and instant) and strengthens relationships between customers and suppliers by providing a good means for useful and vital communication.
This can provide management and suppliers with access to relevant and up-to-date marketing information such as buying patterns, profitability evaluations as well as stock levels e.g. if the stock level is low, it can be replenished quickly
However, when consideration is given to the time, money and effort saved by computers, the benefits clearly outweigh the drawbacks.
Stock control, ICT is needed very badly in accounts because if it wasn't then accountants would find it difficult to manage their stock control.
Purchasing, in some businesses it is important to have a purchasing department because if you need to buy anything or need to book anything then somebody in that department will note down all the purchases that have been made and calculate the companies existing capital and they will also make the purchases in the same department.
Credit control, this is very important especially in accounts because in some companies they will give credit out to customers who cannot afford the product right away and they need to keep track of who owes them money and they do this by using ICT.
Supplier payments, this is important in nearly all companies because it makes it possible for some companies to pay off debts to their suppliers over the Internet. This is an effective way because it means that you do not have to travel to pay off your 'debts'
Budgeting and forecasting, this is important so that they have an idea whether their business will do fairly well in the future or whether it will make a downfall and because they have an idea of what might happen they can budget themselves and if they believe that a downfall will occur then they can hold some capital back so that they can prepare for the downfall or whatever is going to happen.
The disadvantages of ICT are when doing work things can go wrong such as a virus or a crash, which can mess up your entire system and wipe all your work in seconds and careless use of passwords. E.g. Hacking.
The overall objective of computers is to improve the standards of the accounting environment. The computer has not caused any changes to accounting concepts but it has changed the environment of accounting in practice that there must be a fundamental change in the way accounting is taught. As the professional environment of chartered accountancy is constantly updating their knowledge and skills in order to maintain their professional competence
EVALUATE THE USES AND BENEFITS OF COMPUTERS IN ACCOUNTING
