Abstract In this last in a series of four planned commentaries, the author examines the potential impact of changes in information technology on the future of accounting and financial reporting. The author divides accounting into two primary functions: ‘compiling’ and attestation. He posits that information technology will assume an enhanced role with respect to the former function, namely tracking and categorizing information, aggregating information and conceptualizing data into asset, liability and equity components. He also suggests that advancements in technology—such as expert systems, smart agents, relational databases, neural networks and data visualization—will increasingly offer users the ability to manage large amounts of disaggregated data. As a result, rather than rely on traditional financial statements, users would have the opportunity to access, analyze and focus on data that is most relevant to their particular needs, including forward-looking and soft information. The author also notes the benefits that would inure to corporations providing information under this new system. He discusses several reasons why a disaggregated data paradigm has not yet materialized, but predicts that such a system seems fairly inevitable in the future given the press of technology. The author also asserts that the attestation function will shift from a focus on attesting to financial statements to attesting to the procedures and processes used to present data for access by end users. Under such a changed accounting and information paradigm, the roles of accountants, standard setters and regulators would undergo substantial change.
Steven M. H. Wallman (Sun,) studied this question.