Digital Transformation in Accounting and Auditing: An Analysis of Its Impact on Financial Reporting, Internal Controls and Fraud Detection

Abstract

The business world is highly computerised today as a result of the technological revolution. The language of business, accounting, has also gone through many changes. The double-entry system originated in Italy and was first documented in 1494 by Luca Pacioli who was known as the father of accounting due to his contribution to the study of accounting. Some of the earliest information about accounting is found in the book of Chanakya, the philosopher and economist, who wrote the Arthashastra during the Mauryan period. This priceless resource provided guidance on accounting and financial management. Now, the accounting profession is undergoing a revolutionary change in the midst of technological revolution. The use of new technologies including artificial intelligence, blockchain, data analytics and cloud computing is transforming accounting practices, improving the quality of data and improving decision-making. This study will focus on the impact of these technological developments in financial reporting and accountants. The study is founded on a detailed review of literature, case studies and expert interviews to gain insight into the various technological advancements in accounting. In addition, primary data were collected from the leading Indian companies - Wipro, Infosys, TCS and Tech Mahindra. A total of 95 respondents, chartered accountants, accountants and financial analysts (70 men and 25 women), took part in the study. For the data analysis, statistical techniques have been used (chi-square test and percentage analysis). This was done to find any insights and associations, particularly between gender and status in organisations. The findings reveal that technology is positively affecting accounting and auditing. Moreover, technology has enabled more accurate and timely financial reporting, and has become a valuable component of accounting.