Database technology is available now – is it changing accounting? What would the impact be on Accounting Standards?
Do you think that companies would allow “interested parties” to have access to their financial database rather than their annual report? What if the “interested parties” were trustworthy?
Database technology changing accounting
I agree database technology is changing accounting. One example is the use of Software as a service (Saas) for accounting software, which utilizes database technology to store databases in the cloud. This has allowed accountants to have timely access to information from all operating segments as simultaneous updating of database is possible. This enhances the accuracy of data and improve data sharing within the organisation. As a result, accountant can reduce their focus on the maintenance of data and focus their efforts on producing meaningful information and reports.
Impact accounting standards
Currently, I believe that the impact of database technology on accounting standards is minimal. Because database technologies and AIS are primarily functioning as tools to enhance the efficiency in capturing and organisation of data. Fundamentally, the accounting principles on presentation of information is unchanged.
However, in future with advancement of database technology more information can be produced and deeper analysis could be conducted. Hence, accounting standards might need to be updated to ensure that information presented in the financial statement is the most relevant and reliable for financial statement users.
Access of database by “interested parties”
I believe that companies should not allow access to its financial database as the database contain important data of the operations and economic advantage. Allowing access to the financial database would result in outsiders knowing too much information about the company and might even cause the company to lose its competitiveness.
