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How CPAs use computers.

HIGHLIGHTS OF three surveys on how accountants use computer technology:

* ON AVERAGE, CPA firms spend $2.67 per chargeable hour on computer technology--that's about 3.5% of gross revenues and $2,053 per employee.

* LARGE CPA FIRMS are more likely to have local area networks (LANs) than smaller firms. The proportion of industry accountants who have LANs is greater than that of their colleagues in CPA firms: 48% of industry accountants versus 34% of public accountants. Of the respondents who are not on networks, 54% in public practice and 46% in industry say their organizations plan to add LANs within the next 12 months.

* THE HIGH-POWERED 486 and 386 computers are quickly gaining favor among CPAs, with large CPA firms moving most swiftly to acquire them. Laptops are used in 72% of CPA firms and in 75% of industry accounting offices.

* MANY CPAs don't seem worried about computer viruses. Only about a fourth of CPA firms and less than half of the industry offices have procedures to prevent the introduction of a virus. As for controls to prevent unauthorized access to computer systems and data, 43% of the public CPAs and 84% of the industry accountants use passwords.

* OVER 80% of both the public and industry CPAs perform regular data backups.

* BATCH PROCESSING is used by 62% of CPAs for individual income tax preparation, 34% for business income tax processing and 43% for financial statement preparation.

The data for this survey were culled om a questionnaire mailed to members of the American Institute of CPAs. The purpose was to find out what hardware they were using and what they planned to buy in the future. Half the questionnaires were sent to accountants in public practice and half to accountants in industry.

The results of the survey follow:

Local area networks (LANs). As expected, LANs are more common in larger organizations than in smaller ones. Only 15% of organizations with fewer than 5 computers have LANs. The percentage jumps to 45% when there are between 5 and 10 computers and to 65% when more than 10 computers are in use. The proportion of industry accountants on LANs (48%) is greater than that of their colleagues in CPA firms (34%). Of the respondents who are not on networks, 54% in public practice and 46% in industry say their organizations plan to add a LAN within the next 12 months.

The most popular LAN products, with 71% of the public accounting market and 64% of the industry accounting market, are made by Novell; IBM is a distant second, favored by only 4% of public accounting firms and 11% of industry CPAs. Contrary to those CPAs relating horror stories about their computer networks, most respondents express satisfaction with their LANs.

Desktop computers. Most accountants use IBM-compatible desktop computers, and Compaq is the most popular brand, with 24% of the total CPA market. However, the recent collapse of personal computer prices and Compaq's slow response to meet the competition surely are having a major impact on purchases. For example, when asked what brand of computer they planto buy in the next 12 months, public CPAs responded: 65% Dell, AST or another clone; 20% IBM; and 8% Compaq. CPAs in industry say they will follow the same general trend. The Macintosh comes in last in both groups with less than 5%. Compaq and IBM recently introduced new, competitively priced PCs, which may affect future responses.

High-powered 486 and 386computers are quickly gaining favor among accountants, with large CPA firms moving most swiftly to acquire them. For a breakdown of who is using what, see exhibits 1 and 2, below.

Laptops and notebooks. As small, transportable computers get both lighter and more powerful, accountants are adding them to their professional toolbox. Overall, laptops and notebooks, which are even smaller, are used in 72% of CPA firms and in 75% of industry accounting offices. Toshiba and Compaq are the leading brands. Exhibits 3 and 4, page 40, give the details.

Printers. No matter how fast and powerful a computer is, the speed at which reports, spreadsheets and tax returns are generated is limited by the speed of the printer. This is one reason accountants are moving increasingly to high-speed laser printers. By far, the most popular laser printers are the Hewlett-Packard models. At least one Hewlett-Packard printer is used in 93% of CPA firms and in 80% of industry accounting offices. Xerox and Apple laser printers, the next most, popular brands, are reported by fewer than 10% of respondents in either category. If budget is not a consideration in purchasing a new printer, 71% of public CPAs say they will purchase a Hewlett-Packard printer, 27% another brand and 2% an IBM in the next 12 months. Among industry accountants, 59% will buy a Hewlett-Packard, 36% another brand and 5% an Apple.

Despite the trend toward laser printers, the old standby, the dot-matrix, is still used by almost 99% of all accountants. And inkjet printers, which fall in price between the laser and the dot-matrix models, are used by 18% of CPA firms and by 34% of industry accountants.

Color graphics plotters (printers) generally are used in only the large CPA firms. However, nearly 37% of industry accountants have them. Portable printers are used by 29% of CPAs and by 17% of industry accountants.

Peripheral equipment. The mouse has not yet become standard equipment on either public or industry accountants' computers, with usage standing at 41% and 62%, respectively. Undoubtedly, it will become standard as more accountants use the newer software with Windows-type graphics interfaces, which require a mouse.

Other special-purpose peripherals have barely made it into the accounting work place. The desktop optical scanner, for example, is used by only 5% of public accountants and 19% of industry accountants. But this device, too, is sure to grow in popularity as CPAs discover how easy it makes entering printed data into the computer.

Phone-answering boards are used by 6% of public accountants and by 12% of industry professionals. Optical disk drives are reported in 9% and 5%, respectively, of public and industry accounting work places.

About 90% of all accountants use color monitors rather than monochromes, and 66% of public accountants and 46% of industry professionals recently acquired monitors that emit lower levels of radiation.

Security. Many accountants don't seem worried about computer viruses. Only about a fourth of public CPAs and less than half of management accountants take steps to prevent the introduction of a virus. In both categories, the interest is mainly in large CPA firms and large companies.

As for controls to prevent unauthorized access to computer systems and data, 43% of the public accountants use a password, 14% use an identification code and 9% use a keyboard lock. Nearly half do not use any access controls. In contrast, 84% of the industry accountants use a password, 32% an identification code and 18% a keyboard lock. Obviously, of those who use security at all, many apply more than one measure.

Backup procedures. Over 80% of both the public and industry CPAs regularly back up computer data, and over 25% of the offices log these backups as an extra safeguard. The frequency of backup is evenly divided among daily, weekly, monthly and immediately after a file is changed.

Backup procedures for networks are performed by LAN or department administrators in 44% of the industry offices and in 54% of the CPA firms. Network backups are done on a daily basis in 72% of industry accountants' companies and in 54% of CPA firms.

When asked if a work place experienced problems due to failure to follow proper backup procedures, 84% of the industry respondents and 80% of the public respondents said no.

External communications. Modems are used in 43% of the small local CPA firms (with 2 or fewer professionals), 74% of medium-sized CPA firms (with 3-14 professionals), 93% of large local (with 15 or more professionals) and regional offices and 86% of national and international offices. Industry accountants are more likely to have modems: They are installed in 86% of the offices of small companies (those with under $10 million in sales), in 98% of medium-sized companies (those with $10 million to $99 million in sales), in 85% of large companies (those with $100 million to $499 million.in sales) and in 78% of very large companies (those with sales of $500 million or more).

Computer technology is continuing to have a major impact on the accounting profession. The trends are definitely toward LANs and high-powered computers, implying that technology is becoming more complex. Clearly, accountants must keep abreast of technology to remain competitive; those who fall behind risk becoming technologically obsolete.
COPYRIGHT 1993 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Computer & Technology Surveys
Author:Lindsey, Howard C.
Publication:Journal of Accountancy
Date:Jan 1, 1993
Words:1445
Previous Article:Family affairs.
Next Article:How CPAs use software.
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