A previous article by Mr. Geoffrey Messado examined the need for a revision of our current incentives in order to make a more direct positive impact on labour productivity. Mr. Messado illustrated that Jamaica’s productivity increases were way behind that of similar developing countries over the period examined. The following table summarizes the productivity illustration:
Labour Productivity Increase (1960 – 1990)
Singapore - 386.6%
Barbados - 118.9%
Jamaica - 18.8%
It is therefore no wonder why we remain in an uncompetitive position in the global market, resulting in our continuing economic woes. Our labour productivity is so far behind that it seems highly improbable that we will earn our way out of our economic difficulties by utilizing our labour resources.
Over the years we have had numerous incentives, which are aimed at encouraging investments and exports. The question asked by Mr. Messado, which we need to answer is has these incentives worked and if not why not. The website of the Planning Institute of Jamaica (www.pioj.gov.jm) shows the following statistics between 1997 and 2001:
Unit 1997 1998 1999 2000 2001
Average weekly earnings of all employees (1990 J$) J$ 177.2 881.9 869.1 277.7 n/a
Exports as % GDP (current) % 21.4 19.5 18.4 18.5 17.0
Imports as % GDP (current) % 49.4 46.9 44.4 46.0 41.0
Income per capita (constant) J$000 7.5 7.4 7.3 7.4 n/a
These statistics show us a picture of our labour productivity and highlights that our current incentive schemes are not bearing the fruit we expected.
The JAMPRO website (www.investjamaica.com) categorizes incentives under the following industries:
General manufacturing
Agribusiness
Film
The Information and Communication Technology sector
Tourism
I will look at these incentives and offer some analysis on their relevance to our competitiveness. This is based on the information taken from the JAMPRO website, which I thought was most appropriate to use as this is the country’s investment promotion arm.
General Manufacturing / Textiles
The site states that the manufacturing sector employs about 90,000 persons or 9.4% of the employed labour force. The sector earned in excess of US$2 Billion in exports in the years 1993 – 1997 (the web site refers to these years as the last 5 years, which means that this site has not been updated since 1998 and this is Jamaica’s Promotion Agency), where textiles and apparel is the major revenue item. Export growth has slackened since 1996 due to trade liberalization and price stabilization. It further states that since 1993 more than US$3 Billion in consumer goods have been imported.
This shows that the sector is not competitive as trade liberalization has had an impact on the performance of this sector. What has happened is that we are producing for export markets based on special contracts etc. but not on a competitive basis and at the same time we are importing more than we export.
The incentives listed under this sector are:
1. Export Industry Encouragement Act – “To qualify under this act the manufacturer must be an exporter of manufactured products.” It further states that the business must be designed to export to earn hard currencies “therefore, the CARICOM market is not usually the focus of the exporter”.
2. Jamaica Export Free Zone Act – to qualify a manufacturer must ensure that all transactions are conducted in US currency in addition to the fact that they are located within the free zone area. Some firms outside of the free zone may qualify. To get free zone status a company must (i) be registered under the Companies Act; (ii) export at least 85% of its production, and (iii) receive an approval from the BOJ.
3. Accelerated Depreciation / Special Capital Allowance – “upon qualification, a certified business is granted a special allowance of capital expenditure for 50% of the full cost of any new machinery in the year of purchase, and a further 50% in the 2nd year.”
4. Bauxite and Alumina Industries Encouragement Act – businesses engaged in “the mining of bauxite or production of Alumina in Jamaica automatically qualify for import duty concessions on capital goods, lubricating oils, grease and other chemicals.”
5. Petroleum Refinery Encouragement Act – relates to registered oil refineries where they can import articles for construction and refinery operations duty free. They are also exempt from paying income tax or tax on dividends (this was repealed on public companies which indicates when this site was last updated) for a period of up to 7 years after which he has 6 years to carry forward net losses incurred during the period.
Agribusiness
“Investor’s who invest in Jamaica’s agricultural and agribusiness sector can benefit from the following incentives and support services:
· Approved farmer status, which guarantees income tax and import duty concessions for up to 10 years for exporters;
· Income tax relief for a specified period of time…..
· Import Duty concessions on the importation of pick-ups and trucks used exclusively for agricultural purposes.”
This sector can also benefit from the pre-clearance facility.
Film
Motion Picture Industry Encouragement Act – recognized film producer can benefit from income tax relief for a period not exceeding 9 years after the first release of a film. Can also benefit from an investment allowance of 70 per cent of total expenditure on production facilities for carry forward. May also be exempted from payment of certain import duties.
Information technology and Communication
1. Export Free Zone Act – allows “tax exemptions. Duty free import, repatriation of earnings, and minimized customs procedures for companies” operating in designated Free Zones.
2. Export Industry Encouragement Act – “provides duty free importation of raw materials and capital goods, and a tax holiday on profits for 10 years.”
3. Moratorium on Duties – “allows investors without free zone status to pay their import duties over an average two year period.”
4. Telecommunications – “companies in the IT sector can with Single Entity Free Zone status can apply for licences to provide their own telecommunications.”
5. Training – companies can benefit from training grants.
6. Accelerated Depreciation / Special Capital Allowances
Tourism
1. The Hotel Incentives Act – 10 – 15 years income tax and duty relief is available to new and existing hotels under this act.
2. The Resort Cottages Incentives Act – under this act up to 7 years relief from income tax and import duty can be obtained by resort cottages.
If these incentives offer such an attraction to investors such as training assistance, income tax, duty relief and accelerated depreciation, why then has there not been a flood of investments coming to Jamaica? Why is our trade deficit growing and we are becoming increasingly more uncompetitive?
1. A look at the incentives above reveals that there are some inherent problems with them. Mr. Messado stated that there needs to be a clear set of guidelines existing to create an objective measurement for qualification. Bureaucracy and subjective measures must be removed in order to allow businesses to have a realistic expectation of qualification.
2. JAMPRO may also do a great job of communicating these incentives overseas but how much is known about these incentives locally?
3. The incentives frequently refer to export earnings as a means of qualifying, while at the same time that we focus on export earnings imports are rising at a faster rate. What is the sense of increasing export earnings if all we are doing is sending our current production of goods and services overseas and consuming more imports locally? Mr. Messado pointed out that the best period for labour productivity was between 1954 and 1969 when the emphasis was on import substitution. It is obvious that the current incentives are only addressing a part of the equation as shown by the amount of imported produce at more competitive prices than our local produce. The JAMPRO web site states that “the CARICOM market is not usually the focus of this exporter”. This is said even though Trinidadian products can be found in great quantities within the region. I would never have thought that US$ earnings from CARICOM is of any less significance than those earned in the US. We can also be more competitive in these markets because of the CARICOM agreements.
4. It seems also that Jamaica needs to provide many incentives because our present business environment is not friendly to the investor. Having to provide so many tax breaks and grants is saying to the investor that we are in a hostile business environment and therefore we need to provide incentives for you to invest. This suggests that our business environment is not suitable for competitive business practices globally. What then of those businesses that do not qualify for any incentives?
5. The granting of incentives in specific industries almost gives the government a hand in determining which sectors do well and which do not. Government has to get out of the business of industry building through incentives on a sustained basis. The private sector should pick winners not the government. If the business environment and opportunities are right then investments will happen. One reason that the incentives nay not be working is because enterprises with the best returns are outside of the industries qualifying for incentives. These incentives have been around for a while and the environment has been constantly changing.
6. The incentives do not encourage productivity but rather deals with general objectives such as total exports. Additionally, it does not even measure a quantum of exports but rather a relationship to local production. Although a company exports it may be lose money, but as long as the investment has already been made then it will continue to operate while covering its variable costs. Incentives may even make the business profitable in the short to medium term but at the point of retooling the numbers may not add up. Therefore the present incentives may not encourage sustained investments.
Government needs to re-examine the current incentives and determine what objectives they are trying to achieve. Once identified (should be sustained long term growth) then they need to identify incentives and shape them around those objectives. This means that incentives need to be constantly under the microscope to meet any changing objectives. The fact is that the current incentives are not geared towards addressing productivity. Labour in Jamaica is extremely unproductive. Apart from being unproductive the cost of that labour is too high, that is terms of the value it provides. The ten percent in taxes that employers have to pay to employ labour is prohibitive as is the cost of replacing labour with more productive methods (i.e. redundancy payments). Additionally, the low skill and education level of labour in Jamaica can only attract industries where labour is compensated at minimum levels.
Friday, March 21, 2003
Friday, March 14, 2003
The pros and cons of casino gambling
The concept of casino gambling in Jamaica has been in a seesaw state for a while just like the possible war against Iraq. At times it seems imminent and another time it seems not in our best interest. This latest round of debate seems to be the most positive move this government has made towards its introduction. The question therefore arises, why does the government have an interest at this particular time? It seems as if this is nothing more than an attempt to close the budget deficit rather than a commitment to the idea of casino gambling, as a beneficial addition to the tourism product. I hope the study to be done will examine casino gambling not just as another revenue line but rather as a concept and weigh carefully the advantages and disadvantages to the long run economy. There are some valid arguments against and for casino gaming, which must be considered, lest in our rush to find revenue we may end up with an inferior product, incapable of withstanding our competition.
It would do well to examine some of the arguments for and against casino gaming.
Firstly, casino gambling is seen as an immoral issue. Gambling is seen as wrong. This is a very traditional view and is not shared by as many as before. Many people are waking up to the realization (including our tourism competitors) that casino gaming is merely entertainment, just as the many raffles and bingos carried on by many churches. Is there any difference between casino gaming and bingo “fund-raising” games. Both are games of chances and intended for entertainment. From a moral standpoint, if we can have lotteries, bingo, raffles and horseracing then what is wrong with casino gaming. In fact, my personal opinion is that it is better to raise funds through these means than stand on the road side and beg for money in the name of fund raising and charity, as at least there is some economic activity.
The second argument creates the distinction between casino gambling and other forms, which is crime. It is thought that casinos bring more corruption and crime than any other form of gambling. This perception derives from Hollywood, as persons have been exposed to mafia movies, where crime surrounds casinos. The reality, however, is that the crime came out of a time when it was illegal. Casinos flourish all over the USA and other countries now, even more than before, but there is no corresponding increase in crime. We suffer more violent crimes from politics than all the forms of gaming put together. Should we then ban politics? Are we not the fourth highest murder rate in the world without casinos? I don’t think “legalized” casino gaming will make much difference. In fact this is an argument for legalization, as it is easier to control a legal rather than an illegal operation. When something is illegal it tends to be accompanied by crime as there is no protection for the weak. Therefore, the best control is to legislate like anything else.
There is also the argument that legalization will geometrically expand gambling in Jamaica. There is a lot more illegal gambling than we think in Jamaica. The legalization of the drop pan game illustrates this and the problems Supreme Ventures and Jamaica Lottery Company faces with illegal games is evidence of this. People did not decide that to start playing drop pan when Supreme Ventures came. They were playing the illegal form long before. What legalizing casino gambling will do is bring more illegal money into the legal net. There are some establishments in Jamaica that could be called informal casinos, by the number of machines and even have live shows they have.
What is happening to us is that we have created a black market for gaming as we did with the US$ in the 80s. No legislation in the world can curb demand and supply. The US saw this with alcohol in the 50s and the world is seeing it with drugs. The more we legislate against and throw resources at it, the bigger it gets because the rewards are greater (Economics 101).
Increases in gambling are not driven by the legality but the economic climate. As income decreases, one is more liable to risk money on a chance to increase it tenfold. That is the opportunity gambling provides. I do agree that gambling creates addicts (pathological gambling) but isn’t this true of alcohol, cigarettes and even good causes such as charity. If a man spends all his time doing free work or even going to church, then sooner or later he will become a pauper. It is excess that creates the problem, not just casino gambling. In fact if it were legal then the extent of this problem could be more easily measured and controlled, as a portion of the proceeds could go towards addressing this problem. Currently, we have the problem, but as it is not reported on, it is okay.
There is no doubt that casino gambling (and all forms of gambling) has had a significant positive impact on many cities around the world. In Jamaica we see the benefits to sports, charity, education, culture and so on. Recently the US National Gambling Impact Study Commission (NGISC) tabled its final report. This can be found at www.casino-gambling-reports.com/GamblingStudy. The following are excerpts from the study, which speaks to the impact gambling has had on the US:
“..Today, all but two states have some form of legalized gambling…As gambling sites proliferate on the Internet and telephone gambling is legalized in more states, an increasingly large fraction of the public can place a bet without ever leaving home at all…Universally available, “round-the-clock” gambling may soon be a reality…the transformation of Las Vegas into family friendly theme resorts, in which gambling is but one of a menu of attractions, have become familiar backdrops to daily life…Many of the positive economic impacts are in fact easy to point to if not always to quantify: Sleepy backwaters have become metropolises almost overnight; skyscrapers rise on beaches at once-fading tourist areas; legions of employees testify to the hope and opportunities that the casinos have brought them and their families; some Indian nations have leapt from prolonged neglect and deprivation to sudden abundance. Gambling has not just made the desert bloom in Las Vegas but has made it the fastest growing city in the United States.”
In fact, we have missed out on a big opportunity in gaming, which is Internet Gaming. This is the fastest growing part of gaming today and we could have already earned millions of US$. The NGISC report states that Internet Gambling doubled from 1997 to 1998 with the number of gamblers increasing from 6.9 to 14.5 million and revenues from US$300M to US$651M. It also states that observers believe that the rapid growth will continue. In 1998, I prepared a report on Internet Gaming and learned that Antigua earned approximately US$7M in 3 years from licensing fees alone, not including the other spin offs to the economy. At that time the US was unsuccessfully fighting Internet Gambling and never had any significant convictions, as questions of jurisdiction arose. It was during this time that Antigua made a killing, as operators would set up base there, since it was illegal in the US. The players predicted that the US would conform, as it was fighting a losing battle, and so said so done.
The question in my mind is not whether we should introduce casino gaming but how to approach it. There is no doubt that it can bring significant benefits, but we must ensure that it is blended in properly with the tourism product and correctly controlled. As a matter of fact, I believe that casino gambling has more to fear from the crime we presently have than us fearing any crime from casino gambling.
It would do well to examine some of the arguments for and against casino gaming.
Firstly, casino gambling is seen as an immoral issue. Gambling is seen as wrong. This is a very traditional view and is not shared by as many as before. Many people are waking up to the realization (including our tourism competitors) that casino gaming is merely entertainment, just as the many raffles and bingos carried on by many churches. Is there any difference between casino gaming and bingo “fund-raising” games. Both are games of chances and intended for entertainment. From a moral standpoint, if we can have lotteries, bingo, raffles and horseracing then what is wrong with casino gaming. In fact, my personal opinion is that it is better to raise funds through these means than stand on the road side and beg for money in the name of fund raising and charity, as at least there is some economic activity.
The second argument creates the distinction between casino gambling and other forms, which is crime. It is thought that casinos bring more corruption and crime than any other form of gambling. This perception derives from Hollywood, as persons have been exposed to mafia movies, where crime surrounds casinos. The reality, however, is that the crime came out of a time when it was illegal. Casinos flourish all over the USA and other countries now, even more than before, but there is no corresponding increase in crime. We suffer more violent crimes from politics than all the forms of gaming put together. Should we then ban politics? Are we not the fourth highest murder rate in the world without casinos? I don’t think “legalized” casino gaming will make much difference. In fact this is an argument for legalization, as it is easier to control a legal rather than an illegal operation. When something is illegal it tends to be accompanied by crime as there is no protection for the weak. Therefore, the best control is to legislate like anything else.
There is also the argument that legalization will geometrically expand gambling in Jamaica. There is a lot more illegal gambling than we think in Jamaica. The legalization of the drop pan game illustrates this and the problems Supreme Ventures and Jamaica Lottery Company faces with illegal games is evidence of this. People did not decide that to start playing drop pan when Supreme Ventures came. They were playing the illegal form long before. What legalizing casino gambling will do is bring more illegal money into the legal net. There are some establishments in Jamaica that could be called informal casinos, by the number of machines and even have live shows they have.
What is happening to us is that we have created a black market for gaming as we did with the US$ in the 80s. No legislation in the world can curb demand and supply. The US saw this with alcohol in the 50s and the world is seeing it with drugs. The more we legislate against and throw resources at it, the bigger it gets because the rewards are greater (Economics 101).
Increases in gambling are not driven by the legality but the economic climate. As income decreases, one is more liable to risk money on a chance to increase it tenfold. That is the opportunity gambling provides. I do agree that gambling creates addicts (pathological gambling) but isn’t this true of alcohol, cigarettes and even good causes such as charity. If a man spends all his time doing free work or even going to church, then sooner or later he will become a pauper. It is excess that creates the problem, not just casino gambling. In fact if it were legal then the extent of this problem could be more easily measured and controlled, as a portion of the proceeds could go towards addressing this problem. Currently, we have the problem, but as it is not reported on, it is okay.
There is no doubt that casino gambling (and all forms of gambling) has had a significant positive impact on many cities around the world. In Jamaica we see the benefits to sports, charity, education, culture and so on. Recently the US National Gambling Impact Study Commission (NGISC) tabled its final report. This can be found at www.casino-gambling-reports.com/GamblingStudy. The following are excerpts from the study, which speaks to the impact gambling has had on the US:
“..Today, all but two states have some form of legalized gambling…As gambling sites proliferate on the Internet and telephone gambling is legalized in more states, an increasingly large fraction of the public can place a bet without ever leaving home at all…Universally available, “round-the-clock” gambling may soon be a reality…the transformation of Las Vegas into family friendly theme resorts, in which gambling is but one of a menu of attractions, have become familiar backdrops to daily life…Many of the positive economic impacts are in fact easy to point to if not always to quantify: Sleepy backwaters have become metropolises almost overnight; skyscrapers rise on beaches at once-fading tourist areas; legions of employees testify to the hope and opportunities that the casinos have brought them and their families; some Indian nations have leapt from prolonged neglect and deprivation to sudden abundance. Gambling has not just made the desert bloom in Las Vegas but has made it the fastest growing city in the United States.”
In fact, we have missed out on a big opportunity in gaming, which is Internet Gaming. This is the fastest growing part of gaming today and we could have already earned millions of US$. The NGISC report states that Internet Gambling doubled from 1997 to 1998 with the number of gamblers increasing from 6.9 to 14.5 million and revenues from US$300M to US$651M. It also states that observers believe that the rapid growth will continue. In 1998, I prepared a report on Internet Gaming and learned that Antigua earned approximately US$7M in 3 years from licensing fees alone, not including the other spin offs to the economy. At that time the US was unsuccessfully fighting Internet Gambling and never had any significant convictions, as questions of jurisdiction arose. It was during this time that Antigua made a killing, as operators would set up base there, since it was illegal in the US. The players predicted that the US would conform, as it was fighting a losing battle, and so said so done.
The question in my mind is not whether we should introduce casino gaming but how to approach it. There is no doubt that it can bring significant benefits, but we must ensure that it is blended in properly with the tourism product and correctly controlled. As a matter of fact, I believe that casino gambling has more to fear from the crime we presently have than us fearing any crime from casino gambling.
Saturday, March 01, 2003
Information Technology and its use by the Accountant
For the ICAJ Technology Tools and Information Systems Seminar, March 1, 2003
[SLIDE 1] Good morning colleagues.
In this presentation I will examine Information Technology (IT) and its importance to the organization. More specifically I will explore the various ways in which an accountant can utilize IT within an organization and examine the usefulness of IT to the introduction of International Accounting Standards.
[SLIDE 2] The Oxford dictionary defines information technology as “the study or use of systems (especially computers and telecommunications) for storing, retrieving and sending information.” Information Technology can therefore be viewed as the use of systems for capturing and processing information. This is fundamentally what the accountant’s role is in whatever sphere of the profession he/she chooses to practice. The accountant is the one within the organization with primary responsibility for capturing data and converting it to information, specifically for the various users of financial statements.
[SLIDE 3] The IASB (International Accounting Standards Board) Framework states that information presented in the form of financial statements must include the characteristics of:
Understandability – information must be readily understandable by the users;
Relevance –information must influence the economic decisions of users by assisting them to evaluate the past, present or future events;
Reliability (Accuracy) –information must be free from material error and bias and can be depended on by users; and
Timeliness – information must be presented while it is still applicable for decision making.
In fulfilling these requirements the accountant could find IT extremely useful and particularly important in today’s world of increasing market complexities and competitiveness.
[SLIDE 4] The concepts of “Relevance” and “Timeliness” are also constantly changing as markets develop. Increased competition impacts on the need for information to be provided on a timelier basis in order to remain relevant. Also, with the advent of globalization many products are becoming more homogenous, with the only real distinction in product or service delivery being driven by the quality of information and the speed at which it can be processed.
In addition to the usefulness of IT to the accountant, there are also benefits of efficiencies that the organization can enjoy from a properly implemented IT solution, which will be addressed.
IAS Introduction
[SLIDE 5] Over the past two years, the ICAJ has been involved in the introduction of International Accounting Standards. IAS compliance became necessary for companies whose financial year started on July 1, 2002 or after. The introduction of IAS in 2002 has resulted in increased reporting requirements as well as the need for more detailed information gathering. The standards which will affect us more in this regard include IAS 12 (Income Taxes), IAS 14 (Segment Reporting), IAS 19 (Employee Benefits), IAS 36 (Impairment of Assets) and IAS 39 (Financial Instruments). This increased reporting requirement results from an effort by IAS to accurately capture all assets and liabilities that exist or can reasonably be expected to arise at a future date. This translates to a need for proper record capturing systems within companies. Companies must of necessity move away from the temptation to delay data capturing until the preparation of financial statements and begin to capture information at the transaction level.
The increased number of transactions and employee numbers in businesses today also add to the complexity of IAS reporting requirements, as it increases the amount of data that must be captured by accountants. This necessitates that organizations deploy new technological tools to capture information in a timelier manner so as not to delay the reporting of information for management purposes. The accountant needs to therefore conform to greater reporting requirements and at the same time face the challenge of increasing reporting efficiencies. This means that the accountant needs to utilize tools outside of the traditional accounting modules (General Ledger, Accounts Receivable, Accounts Payable, Cash Book) as information needs to be captured much earlier to ensure that it is fed to the financials on a more timely basis. An increased information requirement makes it imperative to employ efficient information processing to meet similar reporting deadlines.
The accountant needs to utilize systems such as Fixed Asset Registers, HR systems, Financial Reporting Systems and spreadsheet applications.
[SLIDE 6] I will now address some examples of how IT can assist with IAS compliance:
· IAS 12: IT solutions can be used to compute taxable differences and capital allowances by setting parameters within the Fixed Assets Register and GL and Reporting systems, which would otherwise have been time consuming if done manually;
· IAS 19: deals with five categories of employee benefits:
1. Short term benefits e.g. wages, annual leave and bonuses;
2. post employment benefits e.g. pensions and post-employment insurance and healthcare;
3. Other long term benefits e.g. log-service leave and log-term disability benefits; termination benefits; and
4. Termination benefits; and
5. Equity compensation benefits.
HR systems can be used to capture this information. Automated HR systems are particularly key to reducing inefficiencies where there are large numbers of employees, e.g. at ROJ where we have some 1,500 employees. A good locally developed HR package is provided by New Generation Solutions.
Spreadsheet applications can be used to track pension valuations and tie that into the accounting system. A spreadsheet can also be set up with the appropriate macros to determine what a company’s obligations are under a defined benefits plan, for recognition under IAS 19.
· IAS 14: defines a reportable segment as a business or geographical segment for which segment information is required to be disclosed by section 9. Segment reporting can be easily captured by accounting applications, and in fact has been a feature of accounting systems for a long time. It is important, however, to first establish the rules by which segments will be reported on. It is possible with some accounting applications to report on both business and geographic segments.
The way it is handled is that the segment information is captured from the point of the subsidiary ledgers and defined and reported through the GL. The financial report writer can also be set up to report based on certain criteria, such as the five test process outlined by Professor Chris Knobes at the last seminar.
· IAS 39: deals with three basic categories of financial instruments:
Type of Investment
Value
Gains/Losses
Held-to-maturity
Cost
None
Available-for-sale
Fair Value
Changes in equity, or income
Trading
Fair Value
Income
* Table extracted from presentation done by Professor Chris Knobes
Financial IT systems can be used to track the various categories for reporting and spreadsheets can most certainly be used to compute value and gains or losses. The use of IT to track and report on financial instruments can significantly reduce reporting time and manual input; and
· IAS 1: deals with the presentation of financial statements. IT use is applicable through the GL chart of accounts and financial report writer.
[SLIDE 7] Most available accounting and other applications do not conform to IAS, simply because the major market for development, the US, does not use IAS. The implication is that the automation of IAS requirements requires creative use of fields within the present systems as well as personal productivity applications such as spreadsheets, which can be easily tied into the mission critical systems. We are unlikely to see changes in the available applications to conform with IAS unless the US adapts IAS or IAS compliant countries begin to develop accounting applications. Alternatively, individual companies can modify applications through developmental interfaces available from solution providers.
Computers used in everyday businesses cannot think through problems, but are merely used to aid in the faster capture and processing of information. Consequently, IAS rules must be determined before they can be adapted to IT, to facilitate faster processing and capture of data.
The introduction of systems can greatly assist in the implementation and conformity to IAS but if implemented and maintained incorrectly can lead to greater inefficiencies and costs. A major benefit from using IT is that once set up the process is automatic and does not require further manual processing.
[SLIDE 8] Data Capture
The accountant must find ways to capture data at the transactional source and speedily convert that to information, as this is the most efficient way to record data and also when it is most readily available. This is easily achieved via process specific and accounting applications. At the core is usually an accounting system, which consists of a general ledger (GL) and include accounts receivable (AR), accounts payable (AP) and inventory (IV) functions. Extensions of these modules include order entry (OE), purchase order (PO), manufacturing, warehouse management, reservation and other process specific applications.
The chart illustrates the relationship between the various modular components of such packages. The ultimate aim is the timely capture of information to produce financial statements. Along the way the method of gathering data is critical. The chart illustrates that systems today encompass the full gambit of an organization’s operation.
It should be noted that the only modules where an accounting entry is generated are AR, AP, IV, Bank and GL. All other applications only provide data for the accounting entry to be posted. An examination of the file structure will reveal this.
[SLIDE 9] The idea behind these systems is to capture data at each point of interaction (originating document) with external parties, thereby reducing the need for further manual data processing.
The points (originating documents) at which data is gathered includes, but are not limited to:
· Entry of customer quotes, vendor invoices and job costing information;
· Printing of customer invoices and cheques for payment;
· Printing of purchase orders; and
· Entering inventory receipts.
There is no longer a need to employ a specialist data processing department or individuals primarily for that purpose. Additionally, these systems add benefits of speed (timeliness), accuracy and relevance to the information process.
When data is gathered at these points it produces instantaneous information for management decision. Additionally, capturing data here creates a check point for accuracy as external parties ensure the correctness of the documentation. The result is a reduced need for unnecessary reconciliation. A properly implemented and run system means that financial statements can be kept current throughout the month.
At each stage management will have information for decision making. A manufacturing system will produce costings, a PO module will show credit obligations, AR and AP will show customer and vendor balances and history and the GL will produce financial statements. It should be noted that the further the information gets from the point of external interaction the more consolidated it becomes. This is consistent with the use of information by various levels within the organization. Management will primarily use the more consolidated information and the functional staff will use daily reports. This acts as a guide for the access levels given to users.
[SLIDE 10]
IT System Selection & Implementation
The key steps that must be followed are:
1. Proper selection process [often the longest part of the project as once a system is selected it is very difficult to reverse the decision]
Company Size
Available Accounting Packages
Large and multinational
· Oracle Financials
· JD Edwards
· SAP
Medium – Large
· EPICOR Financials
· ACCPAC (probably most widely used in Ja)
· Solomon
· Great Plains
Small / Home Office
· MYOB
· Simply Accounting
· QuickBooks
2. Proper implementation procedures [including project management where project management software can be utilized]; and
3. Proper training of personnel.
There are various options available to the accountant as shown in the chart. It is important to select a multi-currency package in Jamaica. Quicken is NOT a substitute for a good accounting system.
(Specific accounting applications are to be presented in a later paper)
The appropriate system selection not only depends on company size and transaction volume, but also on the features and third party solutions available. Each system has its strong points and weaknesses. In selecting an appropriate system the accountant must ensure that proper due diligence is conducted, which examines, among other things, the following requirements:
· Transactional (process method and volume);
· Processing speed;
· Input / Data capture;
· Reporting; and
· Integration needs.
[SLIDE 11] The accountant must arrive at a balance between cost and functionality. In considering costs, the accountant must not only bear in mind absolute cost, but more importantly opportunity cost. The opportunity cost of one system may be greater than the other even though the absolute cost is much less. In such a case the long term benefit of the more expensive system may be more beneficial to the organization. Additionally, the cost of training and technical expertise must not be sacrificed as incorrect (or no) training and expertise will inevitably lead to incorrect implementations or the expected efficiencies not being realized. The cost of correcting a bad systems implementation is always greater in direct and indirect costs than doing it right the first time. It always surprises me when organizations spend exponentially more on acquiring private motor vehicles (that have limited economic benefit) than on putting proper systems in place or on training. It should be noted that the initial costs of IT may seem prohibitive but the future benefits can lead to a substantial return in greater years.
An important consideration for system selection is how widely used a system is. If you are the only one using a certain application in Jamaica then the replacement of human resources will be difficult and at a greater cost. This is similar to having the only type of a car, which means that parts will not be readily available.
[SLIDE 12] Of critical importance is the need for proper IT implementation. This means that from design phase to cutover there must be a proper assessment and management of the appropriate resources. Important in all of this is the need to ensure that proper controls are in place, as employees with fraudulent intents can most certainly do greater damage with a computerized rather than a manual system. This damage is not only restricted to the manipulation of normal internal control practices but employees can cover their tracks by introducing viruses or eliminating data. The control and risks associated with IT systems will be addressed in greater detail in a later paper.
[SLIDE 13]
Human Resource Implication
There are of course important HR considerations in the deployment of any new IT tool. After all we must remember that IT is just another tool that is being used by the accountant. Just as a hammer or saw cannot work on its own so too IT cannot be made to act on its own. What’s more is that the more skilled with the tool the operator is, is the greater the competitive advantage. It always amazes me when people talk about IT as if it is this magical thing that will bring great benefits once it is acquired. This could be no further from the truth. IT must only be seen as another tool that can provide expanded benefits to an organization, which requires a skilled operator to handle. This means that the success of IT solutions involves proper recruitment and consistent training of the organization’s human resources.
(Pookie Johnson Joke)
The real advantage of IT is not determined by how much money is spent but on the use that is made of the system, that is, the expected economic benefits are greater than the cost.
The fundamental rules as it applies to HR in the context of IT then are:
1. Hire the appropriate personnel; and
2. Training, training and more training.
[SLIDE 14]
Manual vs. Computerized Accounting Systems
A comparison of a manual against a computerized accounting system will show that although there is a difference in form there is no difference in substance of these systems.
Manual System Computerized System
Additional ModulesIn both a manual and computerized system you will find a set of subsidiary ledgers (AR, AP, Cash Book and Inventory) which feeds into a General Ledger. The only difference is one requires key strokes and the other pen strokes. A computerized accounting system is therefore only an automation of a manual system’s book keeping and information processing functions. This adds efficiencies, in terms of functions and costs, but does not change the underlying operation. As a matter of fact, the literature promoting some accounting systems will state that it is written to adhere to GAAP.
This means that the accountant is the person with primary responsibility for the IT accounting solutions, and this should not be left to the systems administrator. Which accountant would leave the responsibility of their manual ledgers to someone else within the organization? It is therefore imperative that accountants understand fully the tools of their trade.
[SLIDE 15] This is recognized by organizations as is typified in the requirements of job advertisements for accounting positions.
[SLIDE 16] There are three levels to understanding an IT solution:
LEVEL 1:
Functional
Everyday users
LEVEL 2:
File structure
Accountant and provider
LEVEL 3:
Programme
Developer
It is Level 2 that the accountant needs to focus on, as this is similar to how entries in the subsidiary ledgers affect the GL. Low level accounting staff may only understand the particular entry they are involved in, but the accounting manager / chief accountant / financial controller needs to understand the full impact of the entry.
[SLIDE 17]
Challenges Faced By Jamaican Companies
There are some peculiar challenges being faced by Jamaican organizations in the implementation of IT systems. These include the following:
1. Labour Productivity – one of the main challenges faced in Jamaica today is the low level of labour productivity. It is no secret that labour productivity has consistently declined over the years. In fact a paper produced recently (Geoffrey Messado) shows the following comparison between 1960 – 1990:
Labour Productivity Increase
(1960 – 1990)
Singapore
386.6%
Barbados
118.9%
Jamaica
18.8%
Jamaican organizations, therefore, of necessity need to compensate for the low level of productivity by utilizing more technology. Because IT requires HR productivity and IT cannot run on its own, Jamaican organizations are faced with increasing training costs in the bid to remain competitive.
Solution: It is necessary that Jamaican organizations utilize technology to compensate for labour productivity in addition to emphasizing greater training.
2. HR and Managerial Ignorance of IT – Another challenge is that much of Jamaica’s labour force is highly IT illiterate. Persons usually only have a passing acquaintance with personal productivity applications (Spreadsheets and Word Processors) but do not understand the available technology enough to make a proper assessment or use it effectively. This is by no means restricted to lower level employees but also includes management all the way up to the top. Recently I was at a meeting where a senior manager said to a subordinate “do not worry about the technology but leave it to the systems persons”. Many managers do not understand the integral role IT plays within the organization and thinks that the old days of supercomputers are still with us.
Solution: Recruit personnel who has a knack for IT, and who has experience with IT systems. This must be addressed at the senior level also.
3. Lack of Adequate Financing – the economic times we find ourselves in have also restricted the ability of many organizations to implement IT solutions that will make them competitive. The result is that they fail to compete effectively because of inefficiencies and cannot afford to reverse that trend because of inadequate funding (chicken and egg situation).
Solution: IT providers have introduced hosting services to assist with defraying large capital outlay.
[SLIDE 18]
Conclusion
The onus placed on accountants for the quality of management information inevitably will lead to a merger between the accounting and IT functions. A move towards efficiency and the available tools have made that distinction redundant. Today’s accountant must understand IT to be relevant.
In the final analysis, the accountant is responsible for the integrity and timeliness of information and must employ tools in achieving these objectives. Although this is a very involved process, ultimately it will enhance work flow and decision making. If organizations are to become more efficient in today’s competitive environment then the accountant must be aware of and consistently employ new IT tools.
[SLIDE 1] Good morning colleagues.
In this presentation I will examine Information Technology (IT) and its importance to the organization. More specifically I will explore the various ways in which an accountant can utilize IT within an organization and examine the usefulness of IT to the introduction of International Accounting Standards.
[SLIDE 2] The Oxford dictionary defines information technology as “the study or use of systems (especially computers and telecommunications) for storing, retrieving and sending information.” Information Technology can therefore be viewed as the use of systems for capturing and processing information. This is fundamentally what the accountant’s role is in whatever sphere of the profession he/she chooses to practice. The accountant is the one within the organization with primary responsibility for capturing data and converting it to information, specifically for the various users of financial statements.
[SLIDE 3] The IASB (International Accounting Standards Board) Framework states that information presented in the form of financial statements must include the characteristics of:
Understandability – information must be readily understandable by the users;
Relevance –information must influence the economic decisions of users by assisting them to evaluate the past, present or future events;
Reliability (Accuracy) –information must be free from material error and bias and can be depended on by users; and
Timeliness – information must be presented while it is still applicable for decision making.
In fulfilling these requirements the accountant could find IT extremely useful and particularly important in today’s world of increasing market complexities and competitiveness.
[SLIDE 4] The concepts of “Relevance” and “Timeliness” are also constantly changing as markets develop. Increased competition impacts on the need for information to be provided on a timelier basis in order to remain relevant. Also, with the advent of globalization many products are becoming more homogenous, with the only real distinction in product or service delivery being driven by the quality of information and the speed at which it can be processed.
In addition to the usefulness of IT to the accountant, there are also benefits of efficiencies that the organization can enjoy from a properly implemented IT solution, which will be addressed.
IAS Introduction
[SLIDE 5] Over the past two years, the ICAJ has been involved in the introduction of International Accounting Standards. IAS compliance became necessary for companies whose financial year started on July 1, 2002 or after. The introduction of IAS in 2002 has resulted in increased reporting requirements as well as the need for more detailed information gathering. The standards which will affect us more in this regard include IAS 12 (Income Taxes), IAS 14 (Segment Reporting), IAS 19 (Employee Benefits), IAS 36 (Impairment of Assets) and IAS 39 (Financial Instruments). This increased reporting requirement results from an effort by IAS to accurately capture all assets and liabilities that exist or can reasonably be expected to arise at a future date. This translates to a need for proper record capturing systems within companies. Companies must of necessity move away from the temptation to delay data capturing until the preparation of financial statements and begin to capture information at the transaction level.
The increased number of transactions and employee numbers in businesses today also add to the complexity of IAS reporting requirements, as it increases the amount of data that must be captured by accountants. This necessitates that organizations deploy new technological tools to capture information in a timelier manner so as not to delay the reporting of information for management purposes. The accountant needs to therefore conform to greater reporting requirements and at the same time face the challenge of increasing reporting efficiencies. This means that the accountant needs to utilize tools outside of the traditional accounting modules (General Ledger, Accounts Receivable, Accounts Payable, Cash Book) as information needs to be captured much earlier to ensure that it is fed to the financials on a more timely basis. An increased information requirement makes it imperative to employ efficient information processing to meet similar reporting deadlines.
The accountant needs to utilize systems such as Fixed Asset Registers, HR systems, Financial Reporting Systems and spreadsheet applications.
[SLIDE 6] I will now address some examples of how IT can assist with IAS compliance:
· IAS 12: IT solutions can be used to compute taxable differences and capital allowances by setting parameters within the Fixed Assets Register and GL and Reporting systems, which would otherwise have been time consuming if done manually;
· IAS 19: deals with five categories of employee benefits:
1. Short term benefits e.g. wages, annual leave and bonuses;
2. post employment benefits e.g. pensions and post-employment insurance and healthcare;
3. Other long term benefits e.g. log-service leave and log-term disability benefits; termination benefits; and
4. Termination benefits; and
5. Equity compensation benefits.
HR systems can be used to capture this information. Automated HR systems are particularly key to reducing inefficiencies where there are large numbers of employees, e.g. at ROJ where we have some 1,500 employees. A good locally developed HR package is provided by New Generation Solutions.
Spreadsheet applications can be used to track pension valuations and tie that into the accounting system. A spreadsheet can also be set up with the appropriate macros to determine what a company’s obligations are under a defined benefits plan, for recognition under IAS 19.
· IAS 14: defines a reportable segment as a business or geographical segment for which segment information is required to be disclosed by section 9. Segment reporting can be easily captured by accounting applications, and in fact has been a feature of accounting systems for a long time. It is important, however, to first establish the rules by which segments will be reported on. It is possible with some accounting applications to report on both business and geographic segments.
The way it is handled is that the segment information is captured from the point of the subsidiary ledgers and defined and reported through the GL. The financial report writer can also be set up to report based on certain criteria, such as the five test process outlined by Professor Chris Knobes at the last seminar.
· IAS 39: deals with three basic categories of financial instruments:
Type of Investment
Value
Gains/Losses
Held-to-maturity
Cost
None
Available-for-sale
Fair Value
Changes in equity, or income
Trading
Fair Value
Income
* Table extracted from presentation done by Professor Chris Knobes
Financial IT systems can be used to track the various categories for reporting and spreadsheets can most certainly be used to compute value and gains or losses. The use of IT to track and report on financial instruments can significantly reduce reporting time and manual input; and
· IAS 1: deals with the presentation of financial statements. IT use is applicable through the GL chart of accounts and financial report writer.
[SLIDE 7] Most available accounting and other applications do not conform to IAS, simply because the major market for development, the US, does not use IAS. The implication is that the automation of IAS requirements requires creative use of fields within the present systems as well as personal productivity applications such as spreadsheets, which can be easily tied into the mission critical systems. We are unlikely to see changes in the available applications to conform with IAS unless the US adapts IAS or IAS compliant countries begin to develop accounting applications. Alternatively, individual companies can modify applications through developmental interfaces available from solution providers.
Computers used in everyday businesses cannot think through problems, but are merely used to aid in the faster capture and processing of information. Consequently, IAS rules must be determined before they can be adapted to IT, to facilitate faster processing and capture of data.
The introduction of systems can greatly assist in the implementation and conformity to IAS but if implemented and maintained incorrectly can lead to greater inefficiencies and costs. A major benefit from using IT is that once set up the process is automatic and does not require further manual processing.
[SLIDE 8] Data Capture
The accountant must find ways to capture data at the transactional source and speedily convert that to information, as this is the most efficient way to record data and also when it is most readily available. This is easily achieved via process specific and accounting applications. At the core is usually an accounting system, which consists of a general ledger (GL) and include accounts receivable (AR), accounts payable (AP) and inventory (IV) functions. Extensions of these modules include order entry (OE), purchase order (PO), manufacturing, warehouse management, reservation and other process specific applications.
The chart illustrates the relationship between the various modular components of such packages. The ultimate aim is the timely capture of information to produce financial statements. Along the way the method of gathering data is critical. The chart illustrates that systems today encompass the full gambit of an organization’s operation.
It should be noted that the only modules where an accounting entry is generated are AR, AP, IV, Bank and GL. All other applications only provide data for the accounting entry to be posted. An examination of the file structure will reveal this.
[SLIDE 9] The idea behind these systems is to capture data at each point of interaction (originating document) with external parties, thereby reducing the need for further manual data processing.
The points (originating documents) at which data is gathered includes, but are not limited to:
· Entry of customer quotes, vendor invoices and job costing information;
· Printing of customer invoices and cheques for payment;
· Printing of purchase orders; and
· Entering inventory receipts.
There is no longer a need to employ a specialist data processing department or individuals primarily for that purpose. Additionally, these systems add benefits of speed (timeliness), accuracy and relevance to the information process.
When data is gathered at these points it produces instantaneous information for management decision. Additionally, capturing data here creates a check point for accuracy as external parties ensure the correctness of the documentation. The result is a reduced need for unnecessary reconciliation. A properly implemented and run system means that financial statements can be kept current throughout the month.
At each stage management will have information for decision making. A manufacturing system will produce costings, a PO module will show credit obligations, AR and AP will show customer and vendor balances and history and the GL will produce financial statements. It should be noted that the further the information gets from the point of external interaction the more consolidated it becomes. This is consistent with the use of information by various levels within the organization. Management will primarily use the more consolidated information and the functional staff will use daily reports. This acts as a guide for the access levels given to users.
[SLIDE 10]
IT System Selection & Implementation
The key steps that must be followed are:
1. Proper selection process [often the longest part of the project as once a system is selected it is very difficult to reverse the decision]
Company Size
Available Accounting Packages
Large and multinational
· Oracle Financials
· JD Edwards
· SAP
Medium – Large
· EPICOR Financials
· ACCPAC (probably most widely used in Ja)
· Solomon
· Great Plains
Small / Home Office
· MYOB
· Simply Accounting
· QuickBooks
2. Proper implementation procedures [including project management where project management software can be utilized]; and
3. Proper training of personnel.
There are various options available to the accountant as shown in the chart. It is important to select a multi-currency package in Jamaica. Quicken is NOT a substitute for a good accounting system.
(Specific accounting applications are to be presented in a later paper)
The appropriate system selection not only depends on company size and transaction volume, but also on the features and third party solutions available. Each system has its strong points and weaknesses. In selecting an appropriate system the accountant must ensure that proper due diligence is conducted, which examines, among other things, the following requirements:
· Transactional (process method and volume);
· Processing speed;
· Input / Data capture;
· Reporting; and
· Integration needs.
[SLIDE 11] The accountant must arrive at a balance between cost and functionality. In considering costs, the accountant must not only bear in mind absolute cost, but more importantly opportunity cost. The opportunity cost of one system may be greater than the other even though the absolute cost is much less. In such a case the long term benefit of the more expensive system may be more beneficial to the organization. Additionally, the cost of training and technical expertise must not be sacrificed as incorrect (or no) training and expertise will inevitably lead to incorrect implementations or the expected efficiencies not being realized. The cost of correcting a bad systems implementation is always greater in direct and indirect costs than doing it right the first time. It always surprises me when organizations spend exponentially more on acquiring private motor vehicles (that have limited economic benefit) than on putting proper systems in place or on training. It should be noted that the initial costs of IT may seem prohibitive but the future benefits can lead to a substantial return in greater years.
An important consideration for system selection is how widely used a system is. If you are the only one using a certain application in Jamaica then the replacement of human resources will be difficult and at a greater cost. This is similar to having the only type of a car, which means that parts will not be readily available.
[SLIDE 12] Of critical importance is the need for proper IT implementation. This means that from design phase to cutover there must be a proper assessment and management of the appropriate resources. Important in all of this is the need to ensure that proper controls are in place, as employees with fraudulent intents can most certainly do greater damage with a computerized rather than a manual system. This damage is not only restricted to the manipulation of normal internal control practices but employees can cover their tracks by introducing viruses or eliminating data. The control and risks associated with IT systems will be addressed in greater detail in a later paper.
[SLIDE 13]
Human Resource Implication
There are of course important HR considerations in the deployment of any new IT tool. After all we must remember that IT is just another tool that is being used by the accountant. Just as a hammer or saw cannot work on its own so too IT cannot be made to act on its own. What’s more is that the more skilled with the tool the operator is, is the greater the competitive advantage. It always amazes me when people talk about IT as if it is this magical thing that will bring great benefits once it is acquired. This could be no further from the truth. IT must only be seen as another tool that can provide expanded benefits to an organization, which requires a skilled operator to handle. This means that the success of IT solutions involves proper recruitment and consistent training of the organization’s human resources.
(Pookie Johnson Joke)
The real advantage of IT is not determined by how much money is spent but on the use that is made of the system, that is, the expected economic benefits are greater than the cost.
The fundamental rules as it applies to HR in the context of IT then are:
1. Hire the appropriate personnel; and
2. Training, training and more training.
[SLIDE 14]
Manual vs. Computerized Accounting Systems
A comparison of a manual against a computerized accounting system will show that although there is a difference in form there is no difference in substance of these systems.
Manual System Computerized System
Additional ModulesIn both a manual and computerized system you will find a set of subsidiary ledgers (AR, AP, Cash Book and Inventory) which feeds into a General Ledger. The only difference is one requires key strokes and the other pen strokes. A computerized accounting system is therefore only an automation of a manual system’s book keeping and information processing functions. This adds efficiencies, in terms of functions and costs, but does not change the underlying operation. As a matter of fact, the literature promoting some accounting systems will state that it is written to adhere to GAAP.
This means that the accountant is the person with primary responsibility for the IT accounting solutions, and this should not be left to the systems administrator. Which accountant would leave the responsibility of their manual ledgers to someone else within the organization? It is therefore imperative that accountants understand fully the tools of their trade.
[SLIDE 15] This is recognized by organizations as is typified in the requirements of job advertisements for accounting positions.
[SLIDE 16] There are three levels to understanding an IT solution:
LEVEL 1:
Functional
Everyday users
LEVEL 2:
File structure
Accountant and provider
LEVEL 3:
Programme
Developer
It is Level 2 that the accountant needs to focus on, as this is similar to how entries in the subsidiary ledgers affect the GL. Low level accounting staff may only understand the particular entry they are involved in, but the accounting manager / chief accountant / financial controller needs to understand the full impact of the entry.
[SLIDE 17]
Challenges Faced By Jamaican Companies
There are some peculiar challenges being faced by Jamaican organizations in the implementation of IT systems. These include the following:
1. Labour Productivity – one of the main challenges faced in Jamaica today is the low level of labour productivity. It is no secret that labour productivity has consistently declined over the years. In fact a paper produced recently (Geoffrey Messado) shows the following comparison between 1960 – 1990:
Labour Productivity Increase
(1960 – 1990)
Singapore
386.6%
Barbados
118.9%
Jamaica
18.8%
Jamaican organizations, therefore, of necessity need to compensate for the low level of productivity by utilizing more technology. Because IT requires HR productivity and IT cannot run on its own, Jamaican organizations are faced with increasing training costs in the bid to remain competitive.
Solution: It is necessary that Jamaican organizations utilize technology to compensate for labour productivity in addition to emphasizing greater training.
2. HR and Managerial Ignorance of IT – Another challenge is that much of Jamaica’s labour force is highly IT illiterate. Persons usually only have a passing acquaintance with personal productivity applications (Spreadsheets and Word Processors) but do not understand the available technology enough to make a proper assessment or use it effectively. This is by no means restricted to lower level employees but also includes management all the way up to the top. Recently I was at a meeting where a senior manager said to a subordinate “do not worry about the technology but leave it to the systems persons”. Many managers do not understand the integral role IT plays within the organization and thinks that the old days of supercomputers are still with us.
Solution: Recruit personnel who has a knack for IT, and who has experience with IT systems. This must be addressed at the senior level also.
3. Lack of Adequate Financing – the economic times we find ourselves in have also restricted the ability of many organizations to implement IT solutions that will make them competitive. The result is that they fail to compete effectively because of inefficiencies and cannot afford to reverse that trend because of inadequate funding (chicken and egg situation).
Solution: IT providers have introduced hosting services to assist with defraying large capital outlay.
[SLIDE 18]
Conclusion
The onus placed on accountants for the quality of management information inevitably will lead to a merger between the accounting and IT functions. A move towards efficiency and the available tools have made that distinction redundant. Today’s accountant must understand IT to be relevant.
In the final analysis, the accountant is responsible for the integrity and timeliness of information and must employ tools in achieving these objectives. Although this is a very involved process, ultimately it will enhance work flow and decision making. If organizations are to become more efficient in today’s competitive environment then the accountant must be aware of and consistently employ new IT tools.
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