The Evolution of Technology for the Accounting Profession
Every accountant knows that accounting is the language of business. That language has gone through many changes throughout the ages. But through all the changes accounting technology has always played a part in making the accountant’s job just a...
Enterprise Resource Planning (ERP) Systems
The twenty first century accountants have strategic software applications in place to prepare for the future; such as Enterprise resource planning (ERP) systems. This is a software program that integrates different departments in the organization onto the same system. This makes data available diversely and supports activities between the different departments. The information is made available through a common central database and shared through functional areas such as; finance and accounting, sales and marketing, human resources, and manufacturing and production (Laudon, et al, 2006, p.339-340). According to Thomas Wailgum, CIOs have told him that, “Their core ERP modules were used chiefly for accounting and financial applications (96%).” And when asked which areas of their business ERP worked best, respondents overwhelmingly cited, “The financial side of the house (70%)” (2008). ERP improves the business performance because management can get a full picture of how the business is performing at any given moment which can help with major business decision making (Laudon, et al, 2006, p.339).
Supply Chain Management (SCM) Systems
Another strategic software application is the Supply chain management (SCM) system. This helps businesses manage relationships with their suppliers. According to the authors of the textbook, Management Information Systems, Kenneth and Jane Laudon the definition of Supply chain management is, “Information systems that automate the flow of information between a firm and its suppliers in order to optimize the planning, sourcing, manufacturing and delivery of products and services” (2006, p.G 12.) This is an interorganization system because the flow of information crosses over organizational boundaries (Laudon, et al, 2006, p.56-57). Dr. Roger D. Blackwell, professor of marketing at Ohio State University and author of the best-selling book, "From Mind to Market," says it very briefly, "Supply chain management is all about having the right product in the right place, at the right price, at the right time and in the right condition" (PC Magazine, n.d.). Supply chain management has become an important area in many organizations.
There are quite a few demands of a SCM such as; planning and managing procurement, sourcing, and product logistics. These systems require financial expertise to run them. The financial and control aspects of the SCM organization needs to be monitored and supported by a staff. The CPA needs to monitor the entire supple chain, beyond the corporation itself (Kruglinski, 2009). John A. Kruglinski wrote in the Pennsylvania CPA Journal, “Supply chain finance positions typically require a strong background in inventory management and cost accounting, along with other skills, such as contract and capital expenditure evaluation” (2009). In order to meet the demands of the Supply chain management system a CPA, with a standard of excellence in financial knowledge and competencies; superior managerial abilities, is needed to oversee the operations and facilitate the processes.
IT Governance
Many doors have opened for a professional CPA who is proficient in these systems. Because information technology takes on a major part of running a successful organization the IT department needs to be managed. This manager needs to oversee that the information technologies support the organizations’ strategies and objectives. The organizations’ IT systems must be ahead of the competition, they must be financially responsible to the organization, they must be secure with a backup plan for failure and they must be in compliance with effective controls.
Not only must the IT systems support the organizational objectives but the organization must be in compliance with government regulations within the IT Infrastructure. The IT Governance concept is promoted by professional organizations such as, the IT Governance Institute (ITGI) which was established in 1998 and first published the IT Governance framework in that year. In 2004, the ITGI published IT Control Objectives for Sarbanes-Oxley which helped to mainstream awareness of IT Governance and establish controls. This guidance was obtained from Control Objectives for Information and Related Technology (CoBIT). This was also published by the ITGI. Other IT Governance frameworks are the IT Infrastructure Library and ISO 17799 (Information Technology -Security Techniques- Code of Practice for Information Security Management) (Schroeder, 2006).
IT managers must be in direct alliance with executive managers from all departments of the organization. Together they must orchestrate successful business planning, and compliance-related management decisions in reference to IT and the business model. He/she must be a successful, influential professional with strong IT leadership skills and superior managerial abilities (Schroeder, 2006). A CPA who is a member of the American Institute of Certified Public Accountants (AICPA) can become a Certified Information Technology Professional (CITP). The credential takes into account his/her combined expertise and makes him/her an IT professional, the most trusted business advisor (CPA CITP, 2009).
