The IT Committees' Top 10 List
I ts hard to find traditions in the American Institute of CPAs information technology committees; issues change too quickly. However, one institution is the annual vote among members of these IT committees, and other invitees, for the top technologies for the upcoming year. Number-one this year is security. E. C. Johnson, Jr., a member of the information technology executive committee (ITEC) and the events facilitator, says this was actually a multiple issue: Various communications technologies, also on the list, all have security issues, and they combined to push security to the top. Separately, many of the top items bring with them a number of auditing implications as well, as paper trails disappear. Apart from the resulting list, the high-tech method the participants used to choose the top 10 technologies is as interesting as the technologies themselves.
For your consideration in 1997
The 10 chosen this year are as follows. (For comparison, see last years list, JofA, Jan.96, page 25.)
1. Security issues. Security is actually a wide range of issues covering items as familiar as the passwords on cash cards and as sophisticated as "data encryption standard," a technique that creates an unbreakable network transmission code with more than 72 quadrillion combinations. Another key subtopic is the digital signature, which allows the recipient of an e-mail message to authenticate the sender.
"These security technologies are coming of age with the Internet," said Johnson. "Its not just businesses but their customers who want to be sure the Internet is secure before doing business on it." Johnson said we might all someday have digital ID cards to identify ourselves in cyberspace. As security becomes better and more efficient, businessesand CPAswill have more online opportunities.
2. Image processing. A longtime item on the list, this is the process of scanning paper documents and turning them into electronic documents, leading to the much-discussed "paperless office." Documents stored on disks are easier to sort and search through. However, there are both accounting and technology roadblocks. The loss of the paper trail carries serious auditing implications (see "The Implications of Electronic Evidence," page 69, for more information). And character recognition, although getting better, is not perfect: Even many small offices have scanners, and anyone who has used one knows that results are rarely 100% accurate. Intelligent character recognitionthe ability to recognize handwritten charactersis a developing technology.
3. General communications technology. Many technologies are affecting the way data and voice are transmitted. These include common ones such as wireless networks as well as satellite communications. General communications technology affects, and is affected by, security issues.
4. The Internet and public online services. CPAs and many companies already are using the World Wide Web for marketing and delivery of services. (The AICPA itself is online at http://www.aicpa.org .) Organizations, companies and individuals have established discussion groups (similar to the Accountants Forum, for example, but accessible to everyone). The Internet is dissolving boundaries between states and countries, leading to hotly debated regulation issues.
5. Training and technology competency. Only 30% of a companys investment in IT should be in hardware and software; the other 70% should be in training and implementation, said Gary Boomer, chairman of ITEC (see "A Worldwide Call for Technology Training," JofA, Dec.96, page 22). As CPAs, both in the United States and around the world, become more technologically sophisticated, more consulting engagements open up and more complex audit issues can be resolved, for example.
6. The year 2000. Historically, many computers were designed with two-byte year fields, which means that the year 00 could be interpreted as the year 1900. Now, as the year 2000 approaches, any calculation that involves comparing dates (for example, financial calculations dealing with aging such as mortgages, pensions, aging of receivables) will be incorrect. (See "New Millennium Is Cause for Concern," JofA, Oct.96, page 15.) Not one of last years top 10, the year 2000 issue is quickly becoming urgent as some estimate that it could cost as much as $400 billion to correct the problem. Resulting problems, and the costs to fix it, have raised accounting, auditing, tax and consulting issues that the AICPA and other organizations are addressing.(Also see the technology alert on the year 2000 at http://www.aicpa.org/members/div/infotech .)
7. Electronic commerce. Participants admitted that the definition is under constant debate. Generally, electronic commerce refers to a variety of techniques of doing business in a paperless environment and thus has a lot in common with security, image processing and Internet issues. E-mail, electronic funds transfers and electronic publishing all fall under the electronic commerce rubric. It of course streamlines business processes and can reduce paperwork. However, as with so many technologies, it can create audit problems by reducing paper trails.
8. Workflow. Private express mail services that have recipients sign for their packages with an electronic "pen" on a notebook computer are using workflow technology. The aim is to enable workgroups to move and manage information among themselves quickly and accurately by allowing multiple processes to be performed simultaneously. In addition to possible security and audit implications, a significant capital investment may be required.
9. Private networks, including intranets. The intranet is the Internets little sibling, best thought of as a private Internet-like network. One company essentially creates a private World Wide Web site just for its employees, for example, for posting items for internal use only. Intranets can reflect and have the same advantages as the companys actual Web site, with much faster response times. As the new Java programming language becomes more common, Intranet users will be able to run applications directly from Intranet pages.
10. Electronic data interchange. Related to other communications issues on this list, EDI specifically refers to electronic transmission in a particular standard format. Large retailers use EDI to keep track of their stock and automatically alert their suppliers when necessary. Bills of lading, purchase orders, health care bills and letters of credit are commonly transmitted items. EDI is becoming so pervasive that some entities are requiring their suppliers and vendors to use it.
So many choices...
Over 50 technologies, compiled from previous lists and suggestions from committee members, were up for consideration. To sort through them all, the participants used a group decision support system (GDSS) at a computer lab at the University of Arizona at Tucson. The elements were simple: Participants sat at terminals in the lab and responded to questions about themselves and their opinions of the different technologies. Would a given technology have an effect on auditing issues? On tax issues? Was the technology still incipient (neural networks), used extensively (such as laser printers) or somewhere in between (the Internet). One result, for example, was that laser printers were dropped from consideration altogether because they are now so universal and unchanging. GDSS absorbed all the responses and quickly compiled rankings and lists.
GDSS also allowed "brainstorming sessions." Various topics were introduced and participants could type their opinions and then reactions to other participants opinions. It was like a series of message threads in a CompuServe forum, except the time frame was over seconds and minutes rather than weeks and days. Also, all comments were anonymous.
Johnson said the IT committees were looking at ways to broaden participation by putting some form of GDSS online, a formidable technological challenge. "We could then allow all IT section members, or even any interested AICPA member, to provide input into this list of key technologies," he said.
The Institute plans to publish a book, Top 10 Technologies and Their Impact on CPAs (product no. 043009JA), in the first quarter of 1997 describing the technologies in greater detail.
Additional information on these technologies can also be found on the AICPA Web site ( http://www.aicpa.org/members/div/infotech ); in the Accountants Forum on CompuServe; by calling 212-596-6211; and by e-mailing email@example.com .
Richard J. Koreto