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Adapting New Technology In The Fields Of Accounting And Finance Practices Assignment
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Introduction Of Accounting And Finance Practices Assignment Sample
Role of technology is undeniably pivotal, as technological adoptions have transformed accounting and finance practices with advanced and emerging software. Its importance is further noticed due to new technologies’ ability to reduce errors and fortify accuracy, which assists companies to elude issues, such as tax penalties. Moreover, adoption of emerging and advanced technologies allows firms to conduct tedious activities in a short time, while automated tools make the financial accounting practices more organised, productive, and efficient.
In addition, easy access to important and numerous financial data can be ensured with help of technology in accounting and finance practices. Considering importance of adoption of technology, this essay ‘adopting new technologies in the field of accounting and finance practices’explores advantages and associated challenges of integrating technology witnessed by firms. Furthermore, exploration of real-life firms’ responses is discerned in this essay to grasp their perceptions of adopting new technologies in accounting and finance practices.
Concept and benefits of emerging technologies in accounting and finance practices
Emerging technologies that are used in accounting and finance practices can be AI, ML, Cloud-based technology, block chain, and others. Significance of these emerging technologies comes forth, as these assist in streamlining data and processes of accounting and finances. Digitisation has been boosting accounting and finance firms’ adoption of new technologies, as more efficient and productive practices have also shaped clients’ expectations (Gulin et al. 2019). In addition, technological development has automated accounting and financial practices in contemporary business environments. It not only assists companies to become more productive and efficient but also facilitates a competitive edge in global market.
Emergence of new technologies has shaped accounting and financial practices, as businesses can harness data to streamline operations, take better decisions deriving an organisational competitive edge. For example, the automated accounting technology has replaced humans with technology leading to efficient operations. Besides this, applications of artificial intelligence (AI) and machine learning (ML) dominate firms due to their ability to reduce errors and miscalculations in accounting and financial tasks. According to Cai (2021), blockchain technology benefits companies by facilitating accurate financial reports alongside decreased errors and fraudulent activities. Besides, laborious, costly, and time-consuming auditing and accounting practices can be retorted with adoption of new technologies. However, Cai (2018) argued that though blockchain has provided feasible financial solutions, such as mobile payments, online trading, it has reduced participation of financial institutes. Hence, firms’ positive responses are demanded to ensure succinct benefits of new technologies.
Furthermore, there is a recent prevalence in adoption of cloud computing in accounting and financial practices. Hence, higher storage and accessibility to required data through cloud-based accounting and financial tasks make collaboration and exchange of information easy leading to better organisational operations, while promising cost savings for businesses. A supportive argument reveals that in a surge of COVID-19, accounts across firms are encouraged to shift their financial practices to cloud, as alongside providing error-free results, it offers access at remote locations (Babatunde, 2020). Besides, economic benefits are also introduced due to adoption of new technologies, such as cloud computing, IoT, AI, Big data, and others in accounting and financial activities. The Forbes report evaluated an in-depth illustration that IoT reduces human interventions and thus, helps in financial practices, such as transactions, monitoring ledgers, records in real-time, and others (Forbes.com, 2020). It further emphasised that Big Data allows firms’ real-time status tracking of financial operations, whereas AI helps in reducing expenses and errors by streamlining accounting and finance operations.
Issues of adopting new technologies
Exploration of new technologies in accounting and financial firms has assisted to grasp that firms can obtain an advantageous edge by adopting the same. Nevertheless, arguments prevail concerning associated risks and challenges in adopting new technologies in accounting and finance practices. Crookes and Conway (2018) illustrated that inadequate required technical skills are an important concern in adopting new technologies in accounting and finance tasks. It is indeed that inadequate knowledge and insights of emerging technologies, such as cloud computing, AI, big data, and others impede firms’ adoption of technological advancements. In addition, use of block chain technology involves a number of changes, and hence, it requires auditors’ good knowledge and understanding of this technology to offer assurance and value to companies.
Importance of adopting block chain and AI is unquestionable due to their ability to accelerate organisational revenue and performance by reducing individual functions leading to error-free practices, However, arguments prevail that automation that is driven by AI and blockchain often poses disruptions by destroying traditional practices, such as audit (Accountingtoday.com, 2018). Moreover, financial constraint is considered a fundamental issue obstructing firms’ intentions to adopt new technologies. Swann (2018) derived a supportive argument that internal as well as external financial constraints on investments hinder technological adoption in firms, which in turn, hinder innovation to retain competitiveness in global market. Hence, it is undeniable that small and medium enterprises often witness financial crunches to incorporate advanced technologies.
These financial constraints further exaggerate lack of training to utilise new technologies. Adoption of new technology is subject to expenses, which also demands knowledge and skills, and hence, expenditure is further aggravated with training. According to Prewettet al. (2020), though block chain adoption emerges to be inevitable in accounting and finance practices yet associated risks in adopting the same are lack of block chain development, inadequate employee training, and more. A further emphasis illustrates that emerging technologies having ability and potential to disrupt conventional transaction processes demand block chain-based skills and training, a shortage of which hinders firms’ adoption of new technologies (Qasim and Kharbat, 2020). These are a handful of issues noticed, which impede accounting and financial firms’ intentions and ability to adopt emerging technologies even though their benefits are undeniable.
Responses of accounting and finance firms towards identified issues
Firms react both positively and negatively to identified issues in adopting new technologies in accounting and finance practices. Considering benefits from using new technologies, such as finer control and monitoring, better decision-making, organisational performance, four in five UK organisations are observed to use at least one cloud-based service in 2017 (Moll and Yigitbasioglu, 2019). More use of cloud technology is perceived in financial transactions and operations in firms. Companies are noticed to integrate adequate digital training to ensure adoption as well as an acceleration of artificial intelligence in businesses. Fountaine et al. (2019) propounded that companies are responding to issue of technical knowledge by incorporating online tutorials, practical experiences, and various others through technical training concerning AI. It allows employees to apply analytical approaches to business problems. Hence, positive responses to integrate digital training are noticed in firms to adopt new technologies effectively.
For example, a leading accounting firm in UK, Deloitte integrates technical training for employees, which involves learning and evolving skills concerning machine learning and artificial intelligence (Deloitte.com, 2019). It enables this accounting firm to become an AI-fuelled organisation and increase digital expertise to derive a competitive edge in global market. However, Swann (2018) organisations often fail to invest in emerging technologies sufficiently to maintain effective accounting and financial practices. Hence, a negative response of companies towards budgeting and investment to adopt new technologies can be assumed. A contrary view is perceived as further research reveals financial firms are planning to enhance their spending on emerging technologies to integrate their benefits in practices and operations (Fernandez and Aman, 2018). For instance, a renowned UK financial institute, HSBC has planned to invest US$100 million to drive green technologies, which can exhibit its organisational sustainability in a competitive market (Fintechmagazine.com, 2022). Hence, firms’ overall positive reactions can be noticed to adopt new technologies in wake of associated issues.
Conclusion and recommendation
From this above study, it can be concluded that though there are a number of risks and challenges associated with adoption of new technologies yet positive responses of firms are perceived. Adoption of these technologies can undeniably benefit firms in accounting and finance practices starting from error-free results to cost-effective processes and various others. In this context, firms’ adoption of new technologies emerges to be inevitable to derive a competitive edge in a contemporary business environment. Along with existing positive responses of firms towards adopting emerging technologies, a handful of feasible recommendations are discerned to facilitate their better adoption of the same.
- Enhancing awareness of technical skills with respect to identification of efficient practices by incorporating technical training by managersis recommended. It will assist talents within firms to develop IoT-based or AI-based skills concerning their own intentions.
- Extensive communication among involved individuals is recommended to ensure associated benefits and advantages of using emerging technologies in practices. Van Deursen and Mossberger (2018) opined that interactions with emerging technologies could be retorted with information sharing and interpersonal communication. Thus, significance of digital skills can also be accelerated within the firm.
- Along with integrating technical training to enhance individuals’ competence to use emerging technologies in accounting and finance practices, digital talents need to be retained with adequate payroll and compensation (Karacay, 2018). It will fortify organisational benefits and competitiveness driven by utilisation of new technologies.
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