Information Technology And Accountability
The Information Technology has heralded a new era in the realm of accounting and accounting techniques and practices. The terms 'Accountability' and 'Transparency' have very significant connotations in relation to the objectives sought to be achieved by the accounting exercises. Accountability relates to internal control and sharing of information with internal stakeholders while transparency relates to sharing of information with external stakeholders. The final output in the form of annual accounts consisting of the Balance Sheet and Profit and Loss Account of any organization is generally made available to the stakeholders but how the various items are arrived at , is a matter which is nether easily understandable nor easily accessible to them. Although various provisions of the Companies Act do provide the right to them to seek information on them, this right is seldom exercised by most of the stakeholders.
The wider application of accounting technology has been significantly contributing towards greater accountability and transparency in this regard. The accounting technology is nothing but a combination of accounting processes and control through Information Technological tools
which seeks to segregate the routine accounting function from the control function which is done through Management Information System (MIS). It is possible to achieve the objectives of accountability and transparency when there exists an efficient accounting system properly assisted by information technology with appropriate design of accounting and information systems which can elaborated under a few modules as follows:
Under the general module the matters which should receive attention are designing of chart of accounts, cost centres etc., preparation of formats of financial statements and management discussion and analysis.
Next comes the revenue module which may consist of re-engineering of daily revenue collection processes, banking arrangement for daily collection of revenues, accrual accounting for revenues.
The expenditure module may have matters like re-engineering of information and document flows, establishment of standardized processes and formats.
The importance of bank reconciliation from the accounting point of view is great in any organization and under this module designing appropriate formats for information and flows of documents to support bank reconciliation should be ensured.
The management of any organization is posted with up-to-date developments through the medium of reports and the report module must be designed to cater to the information requirements of the management and other levels of the organization.
Besides the modules mentioned above there could be other modules viz., opening balance sheet module which consists of collection of data and information for preparation of opening balance sheet and asset verification, budget module setting procedures for objective and realistic budget exercises, year end processing module establishing procedures for year end processing and closing books and the last but not least training module taking into conceptual, procedural and software aspects.
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