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Chapter 27
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1. | Introduction | ||
2. | Background | ||
3. | Historical Account | ||
3.1. | The Era of the Research Prototypes | ||
3.1.1. | Financial Reporting/Auditing | ||
3.1.2. | Tax | ||
3.1.3. | Management Accounting | ||
3.2. | Moving into Practice | ||
3.3. | A Field is Born | ||
4. | Applications and Impacts of Accounting Expert Systems | ||
5. | The State of the Art | ||
6. | Research Issues | ||
7. | Future Trends and Summary | ||
References |
In a rapidly changing and highly competitive business environment, professionals in accounting struggle with managing information, integrating research, and applying technologies to practical accounting situations. Since the mid-1980s, the use of expert systems to solve practical accounting problems and to assist with financial decision-making has spread throughout business, industry, and government.
With the continued growth of expert systems use, substantial benefits have been reported. In the mid-1980s, accounting and auditing firms put their first expert systems into field use. By the late 1980s, accounting expert systems were already providing substantial payoffs for leading U.S. companies. For example, Texas Instruments' capital-budgeting proposal package increases the speed of processing time for requisition goods by 20 times, reduces cost overruns, and saves $2 million in preparation expenses.
Financial applications are by far the most frequent users of expert system technology. Companies in a variety of industries are using expert systems to prepare complex entries for their accounting records, analyze division performance, assist with capital budgeting decisions, analyze variances, prepare audit plans, assist with tax planning, and perform many other accounting-related tasks. Companies must now decide if expert system technology is suitable and cost effective for their accounting tasks.
The background section of this chapter (Section 2) describes why both accounting firms and companies for which accounting is a staff function develop expert systems for accounting tasks. The historical account section describes the beginnings of expert system research and use in accounting, and how accounting expert systems became a field of study and application. Sections then follow on current applications and areas of study related to accounting expert systems.
Organizations develop accounting expert systems because they are discovery systems that can affect competition, productivity, and task process. Expert systems are a part of the organizational strategy of many accounting organizations.
Discovery. Expert systems development is a discovery process. The development of an expert system requires a deep understanding of the domain and task; thus, organizations acquire information during development. Accounting expert systems can, therefore, impact the organization's knowledge level.
Competition. Another motivation for accounting expert systems development is to affect or influence competitive forces. Within the auditing industry, expert systems development grew rapidly as competition and litigation increased and clients began to shop around for lower audit fees.
Productivity. Accounting expert systems can provide measurable improvements in individual and organizational productivity. Expert systems may increase personnel productivity, increase task efficiency, improve quality control, or result in other productivity impacts. In fact, a number of expert systems for audit tasks have resulted in both improvements in efficiency and effectiveness overall, and particularly, in faster expertise development for novice auditors.
Task process. Accounting expert systems have also changed task processes. The development process provides a deeper understanding of the task and therefore the process can be improved. The task process may also be changed as a result of the expert system enabling tasks to be done by users with less experience. In addition, the system may allow for more inputs and outputs than the task could incorporate prior to the creation of the expert system. This is particularly true for tasks whose complexity is often largely the result of the amount of inputs that must be processed, as in some audit, tax, and financial planning tasks.
Organizational strategy. These impacts and motivations highlight the sometimes mysterious relationship between expert systems and organizational strategy. The interaction between organizational strategy and expert systems is a continuous process that can be described as having six steps.
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