For this assignment I am going to review the article above which highlights the importance of digitalization in the elusive boundaries of accounting through presenting literature that still exists regarding digitalization in accounting in the wake of technological advancements. The article also aims at elaborating how digitalization affects accounting in myriad new ways. It begins by acknowledging that digitalization, which is the third phase of technological advancement has contributed to the disruption in the organizational reality especially in the finance and accounting function.
The article further notes that the existing research which relates to the relationship between technology and accounting seems to focus on the technologies that are already outdated. It is also narrow given that technology is dynamic and thus its impacts on accounting are electric. Hence there is need for research in regards to the relationship between digitalization and accounting given that it has the ability to affect organizations in the acquisition, collation as well as the use of new types of information.
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In efforts to unravel ways in which digitalization impacts accounting and to enable the identification of fundamental avenues for future research, the article presents a systematic literature review from renowned and established accounting journals. It employs an analytical framework to compare and contrast the literature regarding integrated information systems and that of digitalization to show the intense impacts interconnected technologies can have for accountants and for the accounting profession. It acknowledges that accounting has evolved in line with developments in the information technology. According to the existing literature, technological advancements have occurred in phases and they keep changing how organizations operate.
The article reveals that the first phase which was characterised by the emergence of computerized information systems changed significantly the operations of organizations and that of accountants. The changes were attributed to the accountant’s ability to record data in detailed mode in addition to providing analyses that were more accurate. The second phase which was characterized by the advancement of the World Wide Web, IIS and the enterprise resource planning (ERP) allowed accountants to acquire and provide information in a different and more efficient manner across the organization.
The third phase which is still evolving and commonly referred to as digitalization involves making changes in accounting practices, it can be viewed as emerging from the previous technological advancement. This phase expands the sources and types of data used by accountants as well as make alterations that are critical to accounting processes. According to the article, it is important to distinguish between digitalization and digitization in order to understand its impact in accounting. While digitization is less comprehensive, digitalization involves myriad significant changes relating to social and technical structures that have immense organizational consequences.
Additionally, the article found that accounting is profoundly influenced by digitalization in a plethora of new ways. For instance, digitalization makes accounting boundaries elusive as well as producing knowledge that is useful in decision making in addition to driving new forms of power relations. Notably, in an organization, the accountants are required to deliver high quality knowledge to facilitate decision making. Given that digitalization provides an avenue for the production of such information, there also arises a challenge in the analysis of this information to ensure it’s trustworthy.
Therefore, the article highlights fundamental questions for future research in regards to the effectiveness of digitalization in the accounting profession. The questions include how digitalization will affect the boundaries of the work of accountants and the accounting profession. In addition, it seeks answers for how digitalization will affect the relative power of organizational actors who will be responsible in the determination of the adoption and implementation of digitalization. Besides, it is vital to comprehend how it will affect the process of producing knowledge that organizations will depend on for decision making.
Reference
Knudsen, D. R. (2020). Elusive boundaries, power relations, and knowledge production: A systematic review of the literature on digitalization in accounting. International Journal of Accounting Information Systems , 100441.
