The his functions of Planning, Directing, Controlling, Improving

role of Information Technology in Management Accounting cannot be
ignored or overlooked and there exists a body of literature on the
topic. Technology used in Accounting has developed from the clay
tokens and containers used in the past, to punched card and computer
systems. Before the advent of Information Technology, record keeping
and processing of data, which are the primary functions of accounting
was done manually and it was laborious and error prone.

introduction of Information Technology to Management Accounting meant
the Manager could carry out his functions of Planning, Directing,
Controlling, Improving and Decision Making, effectively, efficiently
and with speed. The development of railroads and steel during the
century led to an increase in the level of commercial transactions
and the need to reduce human error to the barest minimum. And by the
late nineteenth century, writing boards, peg boards and document
control registers were invented to accommodate, repetitious data
processing tasks. The typewriter and adding machine were also
extended to create cash register, posting and accounting machine.
This can be said to be the beginning of the mechanization of
accounting practice.

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introduction of large scale digital computer in 1946 further
increased the efficiency of carrying out accounting functions. It is
the advent and use of Information Technology in Management Accounting
that has necessitated the quest to find out its impact on Accounting.
has evolved from simple record-keeping in the past to a system
designed to evaluate changes in economy activity. Likewise, the
technology used to store economic data has evolved from clay tokens
and jars to punched card and computer system (Robert Kee). For a
better understanding of the impact of Information Technology on
Management Accounting, we shall examine the historical relationship
between data processing technology and accounting.

keeping seems to have started even before the advent of written
language and numeral system. It is believed that small tokens found
throughout the Middle East, dated around 8000 B. C., were used to
represent and quantify commodities such as sheep or measures of grain
(SchmandtBesserat 1978, p. 52). He continues by saying that this
representation of an economic transaction or data was stored in clay
jars and may have been processed by adding or removing a container’s
tokens to reflect an entity’s account balance (SchmandtBesserat
1978, p. 52). This simple practice shows some of the basic function
of accounting, like storing, organizing, retrieving and processing.
to SchmandtBesserat, the limitations of this type of record keeping
may have led to the development of written language and eventually
alphabetic systems. The Greeks and the Romans used alphabets and
numeric systems to record economic transactions on storage mediums
such as pottery (ostraca) and wooden boards coated with wax (Robert
Kee). The Romans in their computations usually used abacus, which was
to become man’s earliest attempts to supplement human processing of
data (Robert Kee).

feudal system emerged throughout most Europe after the fall of the
Roman Empire. Record keeping became much more localized and centered
around institutions such as the church and manorial estates
(Chatfield, 1974. P. 1920). A tally stick with notches cut was used
to record payment and receipt of funds. It can be concluded that the
tally sticks performed the same role as clay jars and tokens of the
past, which eventually were replaced by computer systems. Records of
manorial estates were added up and balanced during an audit
(Oschinsky, 1956, p. 9192), which perhaps was an indication that a
more elaborate summation of financial data may be required.

the tenth and eleventh centuries the feudal system in most of Italy
became weakened and it was replaced with an economy based on trade
and commerce. This led to the development of the double entry system,
which is a great contribution to accounting practice because it
provided a powerful and flexible model for managing data. The
double-entry system was also overtaken in the 19th
century with the introduction of the use of Information Technology in

say that Information Technology has impacted positively on Management
Accounting is to state the obvious. Information Technology has
become the primary means of managing financial data and as a result,
the dependence on Electronic Data Processing (EDP) technology and
professionals to manage financial data is on the increase. Financial
data are usually managed by a Data Base Administrator (DBA) (Page and
Hooper, 1992, p.188), which is responsible for the content, structure
and security of the data base (Everest, 1966, p. 589600). This Data
Base provide access and availability, which conflicts with
management’s goal of restricting and controlling access to a firm’s
financial records with its attendant consequences. Although
authorization and password systems are often used to reduce their
effects a data base system exposes companies to unauthorized users
who can hack into systems to perpetuate fraud or steal vital

drawback of Information Technology in management accounting is that
much of the traditional data management function of Accountants have
be taken over by EDP professional, which has led to a gap between the
technology and data used to implement accounting functions, though it
has also increased the functions of the Accountant to include
managing the firm’s data in conjunction with performing its
traditional role. The use of Information Technology in accounting has
also led to a new corps of professionals responsible for the
management of the software developed for accounting.

use of Information Technology has also rendered the double-entry
accounting model, which had existed for centuries as the primary
means of managing financial data manually, obsolete. This is as a
result of using DBMS software, which now maintains the journals,
ledgers and procedures of manual accounting systems.

can be concluded that the impact of Information Technology in
Management Accounting, though a welcome development in that it has
increased the efficiency and effectiveness of accounting practice,
has also created new challenges that did not exist in the accounting

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