Top 15 technologies CPAs should know about in 1996.

Image processing--converting from paper to electronic documents (digital images) using computer scanning--heads a list of 15 information technologies and practices that will have the greatest impact on CPAs during the coming year, according to the American Institute of CPAs information technology division.

Items are ranked based on the level of impact they are expected to have in four areas: accounting and auditing, taxation, consulting and finance and operations. The Institute's information technology practices and information technology research subcommittees, which compile the list: annually, consider how implementation in each of these areas might affect potential revenues and organizational and personal productivity and effectiveness, as well as the effect each item might have on the risks and exposures in the CPA's professional environment. Each technology also is evaluated to determine its stage of development and acceptance and level of use by CPAs ranging from new or emerging technologies or practices through those that are widely used.

The following are the technologies:

1. Image processing--converting paper images into electronic documents through scanning. Organizations may routinely transfer these digital images internally and externally, and the technology can significantly streamline workflow. However, the validity and integrity of information are key concerns for CPAs, and automated quality control over the conversion will be more important. Also, backup materials that traditionally have been available on paper may be absent.

2. Electronic data interchange (EDI). This is the automatic electronic execution of routine business transactions between two or more business entities in a standard format, with greater reliance on third-party and software controls over transactions and data files. EDI represents a significant departure from traditional business practices. The risk to data increases as computers become more involved in the transactions than people, and business partners will have to pay close attention to compliance with contracts. CPAs working with electronic data must consider the competency and sufficiency of a solely electronic audit trail.

3. Security. CPA firms, companies and other organizations need to establish policies, procedures and methods to limit access to information systems to authorized users.

4. Electronic commerce--the use of computer and communication technologies to link multiple enterprises. This helps maintain a company's competitive advantage by providing accurate and timely operating information. When dealing with electronic commerce, auditors need to consider the sufficiency of the audit trail and assess the risks and exposures for system controls.

5. Communications technologies--the process of packaging and transmitting data, text, voice or video information using a combination of technologies such as modems, networks, gateways and satellites in a seamless manner. The technologies allow businesses to decentralize their physical operations and expand their marketplace worldwide. Access to information requires additional preventive controls: Communications technology often presents security problems.

6. Workflow technology. This enables workgroups to move and manage information among themselves. As responsibilities are realigned, certain controls are eliminated, and a complete reassessment of the client's internal control structure may be required.

7. Area networks--computers at different locations linked by data communications technology to share resources. Networks can improve productivity by increasing the accessibility of multiple systems from a single computer. They entail unique audit, control, security and reliability considerations, making it difficult to identify the origin or a transaction.

8. Collaborative computing and groupware--software that allows teams of people to work together by allowing every member ora team to view and update documents. When working with groupware-generated documents, CPAs must be more skeptical, since accountability is more difficult to maintain as the number of participants increases.

9. Cooperative and client-server computing--the distribution of processing functions among two or more computers. This allows greater efficiency in processing and telecommunications as well as independent design, implementation, maintenance and control of applications. Unlike in the case of mainframe computers, a single control point does not exist; thus, it may be difficult to document transactions.

10. Intelligent agents. These are software products that are used to make inquiries into databases, systems or networks.

11. Business process reengineering--an approach that joins information technology and continuous improvement. The entire business process must be studied and redesigned, and it is essential that internal audit staff be involved early in the decision and implementation process.

12. Mail technology. This consists of the various technologies to shorten response time, including voice mail and e-mail.

13. Expert systems--a focused form of artificial intelligence used in the decision-making process. Expert systems are used in audits. CPAs may need specialized skills to use expert systems' data query and report-generation tools.

14. Quick response (QR)--a business strategy to better respond to changing customer demands. Technologies supporting this include point-of-sale transaction processing, bar-coding-scanning, EDI and automatic reordering-replenishment, among others. QR is a significant departure from traditional business practices, and CPAs need to assess the risks and exposures for system controls.

15. Telecommuting. This is an arrangement trader which employees work at sites other than the employer's central location. It focuses on the work being performed, rather than where it is being done.

Several of the items on this year's list were identified as "emerging" technologies: electronic commerce, workflow technology, intelligent agents, expert systems and computer-telephony integration.

For more information about these technologies or about division publications or membership, contact Andrew Gioseffi, [phone]; e-mail: [e-mail]. The division's technology guides may be purchased through the Institute's order department, [phone], menu #1; fax no. [phone].