THE IMPACT OF INFORMATION TECHNOLOGY ON THE ACCOUNTING PROFESSION IN NIGERIA
By: Idongesit Efiong Utah
This research focuses on assessing the impact of information technology on the Nigerian Accounting profession by examining four areas: Impact on the public and private sector, the challenges and reaction to the challenges posed by information technological innovation and information technologies enhancing effect on the Accounting profession.
It is evident that we are in information driven age where information technology is a driving tool in the public and private sectors. The replacement of mainframe computers with personal computers which were affordable to most ...view middle of the document...
Section 1: The impact of information technology on public and private sectors. Section II: The information Technology challenge on the Accounting Profession. Section III: The professions reaction to the Information Technology Challenge. Section IV: The Enhancing effect of information technology on the practice of accounting. Section V: Conclusion
I. IMPACT OF INFORMATION TECHNOLOGY ON THE PUBLIC AND PRIVATE SECTORS
The organizations in the public and private sector form a core of the accountants working environment. The accounting professional functions either as an employee in these organizations or as an external consultant rendering services to them. Information technology and the resulting information systems have had a tremendous effect on organizations. Information systems are becoming powerful instruments for making organizations more competitive and efficient. Information technology is being used to redesign and reshape organizations, transform their structures, scope of operations, reporting and control mechanism, work practices, workflows products and services. (Institute of Chartered Accountants of Nigeria [ICAN],2006)
The organized private sector is at the forefront of the use of technological innovations to improve its service delivery. Considering he fact that they are profit oriented they must constantly improve on efficiency and effectiveness in order to be able to survive the increasingly stiff competition. Though the public sector has been less responsive to the innovations of information technology, it has also been impacted. To examine the effect of information technology on both sectors we shall consider some areas in which they have been impacted.
Change in Organizational Structures: The explosion in the use of information systems has brought about the phasing out of bogus bureaucratic organizations with many hierarchical levels of management. The bogus bureaucratic structure has given way to a flatter structure where there are less hierarchical levels. Because more information is available to employees lower down the line they have assumed more decision taking roles and now actively participate in the decision making process. Modern organizations are using information technology to create more flattened structure that is very responsive to today’s market and business competitive demands. (ICAN, 2006)
Change in Organizational Processes: Organizational processes that were previously manual have now been fully or partially automated. Methods of storing information and data retrieval have moved to the use of data bases instead of the old file cabinets. The payment process adopted by the Federal Government gives credence to the wide reaching effect of information technology on the organizational process. Commencing for 1st January 2009, payments to employees and contractors are now to be made by electronic telegraphic transfers. A circular to that effect was released by the Federal treasury; it was dated 22nd...