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Top 10 technologies - plus 5 for tomorrow.

Deciding on the top 10 technologies for CPAs has become a tradition. This year, however, the AICPA information technology (IT) committees expanded the list to cover 30 items--the top 10 issues, applications and technologies. Earlier in the year, the Journal covered issues and applications ("Y2K Tops Tech Issues List," JofA, Jan.99, page 16, and "Top 10 Technologies: The Applications," JofA, Mar.99, page 12.) Below is a discussion of the underlying top 10 technologies themselves, which serve as the basis of the applications and issues. The committees also chose five additional items that, while not yet part of any of the top 10 lists, still bear watching.

1 Communications technologies--bandwidth. If you look at the Internet as a giant plumbing system, "bandwidth" is the measure of how wide the "pipes" are. Telephone lines--ubiquitous and accessible with a low-cost modern--are the narrowest pipes. Other options--T-1 lines, ISDN and cable service--are faster but tend to be less available and more expensive. A video training session, for example, involving dozens of participants--each at a desktop computer--in different cities, requires large bandwidth to work effectively. As one top 10 conference participant explained, "The major impediment to many mobile applications today is the lack of sustainable and reliable bandwidth." As cable and other high-speed technologies become available to more people and as the big corporate players sort out who will provide the necessary hardware, bandwidth will become more plentiful.

2 Remote connectivity tools--products that keep you in touch. Today's technology is blurring the lines between office, road and home. It's more than just e-mail--one participant said he stores key information on a Web site (which can be password-protected) so, if his laptop crashes while he's on the road, he can rent another and download all the files he needs. The flipside of the coin, though, is the problem of security.

3 Portable technology--notebooks and palmtops. These small computers are getting even smaller, more powerful and less expensive. They let auditors in the field access files and do research, turning "wasted time"--a plane trip or a train commute--into productive time. As these new products are lighter than conventional laptops, CPAs increasingly may take them everywhere. "Information where and when we demand it is becoming a hallmark of professional business," said one participant.

4 Electronic authorization--the digital signature. What is the digital equivalent of signing on the dotted line"? That is, how can you sign a piece of e-mail--or any document sent electronically--so your recipient is sure it came from you? The much--touted paperless office will require digital signatures--consider how much time and energy can be saved by employees filing amended W-4 forms, for example. A wide variety of software products are already available--see the security options that come with Microsoft's Outlook Express.

5 Electronic authentication--digital certificates. Related to the digital signature above, an electronic certificate provides a level of assurance for data sent over the Internet. One company is already marketing a digital certificate that allows doctors to securely prescribe medications over the Internet. VeriSign (www.verisign.com) provides certificates for CPA WebTrust.

6 Image processing. Using this technology, you could take each piece of paper in your office, scan it onto a disk and catalog it on your computer so every bit of information is always accessible. The issue here, according to one participant, is being able to index the information in each hard copy document as you scan it in--without laboriously typing in key words. Fortunately, optical character recognition (OCR) software is getting better, and this process soon will be completely automated. There's also the human factor, one committee member pointed out--too many people are still more comfortable with paper.

7 Data mining and OLAP. Data mining is searching through databases for relationships that might help in making business decisions. For example, can you find a correlation in sales figures between people who purchase golf clubs and those who purchase tennis equipment? Online analytical processing (OLAP) is the ability to extract data from a database and view them from different perspectives: A CPA could create a series of spreadsheets showing golf club and racket sales in June, over several years, and compare these figures with other sporting-goods sales at the same time. Although this information and analysis can be very useful, OLAP programs are still expensive (an estimated $2,500 for each user). However, one participant said there would be data-mining applications even for smaller firms--pulling detailed information out of Form 1040's and using the result as an aid in estate planning, for example.

8 Interconnectivity tools--ODBC, DDE, COM, CORBA. These acronyms stand for the tongue-twisting "open database connectivity" "dynamic data exchange" "component object model" and "common object request broker architecture." Basically, these refer to systems or methods of sharing database information--the communications glue between databases and applications, according to one committee member. Although these terms are relatively unfamiliar now, they'll get more attention in the coming months as companies increasingly share data across systems for e-commerce applications. Said one participant, "The time is at hand when the combination and integration of applications will be more important than any of a system's pieces."

9 Agents. An agent is a program that runs automatically without a user's having to start it. For example, the online job service Monster Board (www.monster.com) allows users to enter the types of jobs they're looking for. Even when the users are offline, an agent scans the Monster Board job database daily and sends an e-mail when it finds a job matching the user's criteria. In the future, "audit agents" may become a part of accounting software, allowing for "continuous audits"

10 Database technologies. How do you organize and manage databases, particularly the enormous repositories that large companies have? A specific issue for CPAs is how to audit and maintain the integrity of all this information. One participant said database technologies could be part of a decision support system--an application that analyzes business data for a company's decision makers. However, such systems require superior project management and a lot of money. A related issue is data mining (see item 7).

Five on the horizon

The committee members identified these five technologies as up-and-coming. Although these are not yet making a big impact on CPAs, many believe they will in the future.

1 Voice and speech systems--voice applications. These involve getting rid of your keyboard and talking to your computer. Applications are becoming more sophisticated, but many participants felt they were not yet far enough along for widespread use. As these systems develop, the big change could be in practice management--secretaries and administrative assistants may become obsolete.

2 Smart cards. They look like credit cards but have embedded chips that contain personal information--your medical history and your bank account, for example. They can be used to transfer money, in the same way as an ATM card, but also to facilitate the transfer of business and financial information between a CPA and a client. Pay phones in some European countries accept smart cards, but they have not caught on yet in the United States. Participants split widely on their use--some were excited about them, but others dismissed the cards as a solution in search of a problem or "technology's equivalent to the Susan B. Anthony dollar."

3 Extensible markup language (XML). XML is the smarter sibling of HTML, the language of the Internet. It defines each piece of data, thus allowing information to be widely shared across all platforms. The implications of XML are enormous. For details, see "The XML Files" page 71.

4 Knowledge systems and knowledge management. In a firm or company that has huge amounts of information, how do you make sure everyone in the organization knows what is available and how to get it? The key is knowledge management, and that means having the right software as well as a thoughtful, logical organization of data. Lotus Notes and Microsoft's Exchange are two products that can help an organization manage information.

5 Continuous auditing. The rifle describes it--a system that is always auditing a company's statements. Companies could discover irregularities almost instantly--not at the end of the year when the problem has become nightmare. Of course, continuous auditing requires a sophisticated system with the right programs and excellent controls. Nevertheless, one participant said the only question was when continuous auditing would become a reality, not/f

Beyond the basics

This article provides merely an introduction to these 15 complex technologies. More details are available at www.toptentechs.com.www.sandismith.com and www.whatis.com.
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Title Annotation:AICPA list of most important technologies
Publication:Journal of Accountancy
Geographic Code:1USA
Date:May 1, 1999
Words:1419
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