THE IMPACT OF COMPUTER TECHNOLOGY ON ACCOUNTING SYSTEM AND ITS EFFECT ON EMPLOYMENT

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof (Conn, 1978). Accounting can also be referred to as an information system that measures, processes and communicates financial information about an economic entity (Wikipedia, 2013). Advancements in computer technology have dramatically improved accounting systems and transformed economic life. Computers and other digital technologies have increased oice productivity facilitating the rapid exchange of documents, research, collaboration with farflung partners and the collection and analysis of data. Computer technology gave all sorts of individual economic actors the new valuable tools for identifying and pursuing economic and business opportunities (Ballada and Ballada, 2011). Computer Technology deals with the application of computers and other telecommunications equipment to store, retrieve, transmit and manipulate data.

This may also be described as anything that renders data, information, or perceived knowledge in any visual format through any multimedia distribution mechanism. Applying computer technology in the context of business, it is designed to help management in their stewardship function, support management in their day-to-day operations and decision making. In 1880, machines where invented to help in the accounting system. As year years passed by, advancements on information technology also transformed accounting systems and its processes. There were many developments in the Accounting System. This is designed to help in the management and control of activities related to the firms’ economic and financial area. Accounting system is essential for majority of the business entities. The advancements of technology have lead in the creation of the computerized accounting system which is commonly adopted by business entities at present. This has created a competitive market. Thus, entities need to improve their systems in order to match their information needs for better decision making.