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The Role of Electronic Payment in Accounting and Auditing

Introduction

Digitalization and other technological advances have made people’s lives easier and more comfortable. The business world also benefits from the use of technology as diverse operations can be carried out in a shorter period of time and more effectively. Electronic payment is one of the instruments people are utilizing in various settings (Naqvi, 2020). Electronic payment is beneficial for organizations as it makes transactions immediate and verifiable if implemented properly. In many countries, including the USA, an appropriate system of verification and audit exists, which makes transactions safe. Although some risks regarding the verification of electronic funds still exist, it is minimized by the introduction of numerous norms and regulations on the international and state level.

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At present, organizations use different instruments to manage electronic payments. New blockchain technology is gaining momentum as the audit of such assets is supported by a sound system of checks and controls. Electronic payment is also becoming safer due to the introduction of standards (such as ISO). At the same time, some electronic payment systems leave space for violations due to a considerable degree of anonymity (Naqvi, 2020). Some of such systems do not have a well-pronounced audit trail, so third-party audits can be less effective. Such systems can also be linked to certain taxation violations, so companies need to ensure they use only verifiable electronic payment systems to avoid issues related to tax liabilities. Therefore, electronic payment is convenient for businesses and individuals, with sound accounting and audit standards. However, companies have to remain cautious and pay much attention to their verification procedures when doing business with partners. New technologies can help in facilitating the development of properly verified and safe electronic payment systems.

The Role of Big Data in Accounting and Auditing

Big data has become a business realm quite recently but the associated benefits have been acknowledged. First, it is necessary to note that big data management requires the utilization of quite advanced technology. At the same time, such instruments are becoming affordable, and companies of different sizes can manage big data (Naqvi, 2020). Accounting and auditing benefit from the use of big data as managers can make evidence-based decisions instead of trying to predict and forecast different trends. Verification procedures can also be facilitated by the use of big data as information regarding other companies and their operations can be helpful in choosing the most appropriate partner. Importantly, the risk of human error is minimized due to the use of sound digital instruments.

Real-time access to vast volumes of information is essential in the modern business world. Decisions can be made in a timely manner due to the accessibility and high velocity of data (Naqvi, 2020). This characteristic of big data is specifically valuable for auditing as audits can be implemented more effectively. Importantly, financial and non-financial data can help in the verification process. Technological advances, such as Tableau, enable professionals to visualize large volumes of data, which is critical in making decisions. The identification of risks (or fraudulent activity) is one of the major benefits of proper big data management, which is pivotal for accounting and auditing.

Finally, big data is an important component of effective reporting. The visibility of evidence is instrumental in making sound decisions. At the same time, the use of big data is still a skill a comparatively limited number of people possesses. Companies have to hire highly skilled employees who have the corresponding skills and knowledge. Staff training is another strategy companies use to ensure that big data use benefits the company.

The Role of the Analytic Tools of ACL (Audit Command Language) in Accounting and Auditing

Such analytic tools as Audit Command Language (ACL) have become widespread due to the effectiveness of the method. Accountants and auditors can identify any anomaly that can be associated with fraud or error. Importantly the system accesses and analyzes data from diverse sources, which contributes to the reliability of results. The analysis of large amounts of data and the visualization of findings enables accounting and audit specialists to trace any abnormalities and ensure the use of corresponding measures. Boenner (2020) notes that Bayer, being one of the early adopters of such technologies (and ACL in particular), acknowledged the benefits of these tools and managed to avoid numerous risky decisions or potentially inappropriate operations. Auditing and making certain decisions have been automated, so human error is minimized and the time for data analysis is decreased considerably.

One of the benefits of the use of ACL in accounting and audit is the elimination of human error. Managers cannot change the data, so any manipulations are impossible. Internal audit has become a typical business operation, which is especially true for large companies and multinationals (Boenner, 2020). The crisis of 2008 illustrated the need to utilize effective audit strategies and instruments to avoid major financial constraints on different levels. Third-party audits can also be implemented with the use of such analytical instruments, which is also beneficial for the overall business environment. Organizations can ensure that their own operations are proper and free from any errors. Companies can also trust their partners due to the use of the latter reputable audit tools, so partnerships are developed more effectively. Finally, the existence of the analytical instruments that are seen as highly reliable makes audits (both internal and external) more effective and standardized.

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The Role of the Analytic Tools of TABLEAU in Accounting and Auditing

TABLEAU is an analytical software that has gained momentum due to its effectiveness and user-friendliness. Auditors and accountants may benefit from using this instrument in many ways. TABLEAU is the software aimed at effective visualization of data, which is important for making decisions. It is noteworthy that the interface is user-friendly, so professionals utilize this tool willingly. TABLEAU can generate diverse types of data representation, making it appropriate for different settings and situations. Although Microsoft Excel is still widely used, TABLEAU is becoming more widespread due to the ease of use.

Decisionmakers benefit from the utilization of this analytical instrument in many domains. Accountants, for instance, can use the information to identify revenue and deductions as per different areas or periods (Cunningham & Stein, 2018). The analysis of revenue and the development of corrective measures is facilitated by the use of this instrument as well. Auditors and accountants can trace abnormalities associated with violations or errors. The identification of any abnormal datasets ensures early intrusion, which helps companies avoid financial and reputational issues.

The software uses data from different sources and can also be helpful in working with big data. This wide applicability of the tool makes it increasingly popular in the business world. The internal and external audit is often associated with the use of TABLEAU. This tool has also become a part of the curriculum as well as organizations’ internal training efforts. However, this process and the spread of the software is also associated with some resistance as some people find digital analytical tools unaffordable and overestimated. Irrespective of this resistance, the future of such an instrument is bright due to its contribution to ensuring proper data management and decision making.

References

Boenner, A. (2020). Bayer: Process mining supports digital transformation in internal audit. In L. Reinkemeyer (Ed.), Process Mining in Action (pp. 159-168). Springer.

Cunningham, L. M., & Stein, S. E. (2018). Using visualization software in the audit of revenue transactions to identify anomalies. Issues in Accounting Education, 33(4), 33-46. Web.

Naqvi, A. (2020). Artificial intelligence for audit, forensic accounting, and valuation: A strategic perspective. John Wiley & Sons.

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StudyCorgi. 2022. "The Role of Electronic Payment in Accounting and Auditing." September 5, 2022. https://studycorgi.com/the-role-of-electronic-payment-in-accounting-and-auditing/.

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StudyCorgi. (2022) 'The Role of Electronic Payment in Accounting and Auditing'. 5 September.

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