BANK EFFECT OF COMPUTER ON THE ACCOUNTING PROFESSION CHAPTER ONE INTRODUCTION
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. 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, that the 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.
1.1 MANUAL DATA PROCESSING SYSTEM
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.
1.1 STATEMENT OF PROBLEMS
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.
1.2 OBJECTIVES OF STUDY
The objective of this study is to:
1. Highlight the importance of computer and it relevance accountants.
2. To 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
3. 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.
1. To provide a guide for organization that need to understand the benefit of computers.
2. To provide a resource material for accountants and students of the profession relative to the advantage of computers
3. Identify the major areas of computer application in accounting
4. Establish the various forms of accounting operations in which computers could be utilized
5. 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.
6. To encourage a continued investigation of the relevance of computers in the financial sector of the third world countries
7. 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 focused on the effect of computer on the accounting profession ( a case study of Asaba Aluminium company, delta state.)
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