BAPUJI EDUCATION ASSOCIATION

DEPARMENT OF COMMERCE
BAPUJI INSTITUTE OF HI-TECH EDUCATION, DAVANGERE

Class: 2nd Semester [Link]

SUBJECT: ADVANCED FINANCIAL ACCOUNTING

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MODULE – 5 EMERGING TRENDS IN
ACCOUNTING
• INTRODUCTION
We are in the middle of a sustained boom in the growth of the
accounting industry . The introduction of new technology presents both challenges
and opportunities for the accounting business, as disruption has become the norm.
The introduction of new innovative enterprises, greater customer demands, and
escalating business costs due to inefficiencies and manual accounting methods are
all major causes of disruption.

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Will study some of the following emerging trends in accounting.

• Digital Transformation in Accounting

• Big Data Analytics in Accounting
• Cloud Computing in Accounting
• Accounting with Drones
• Forensic Accounting
• Accounting for Planet
• Creative Accounting
• Outsourced Accounting
• Predictive Accounting.
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 1. DIGITAL TRANSFORMATION

INTRODUCTION
Digital transformation is the process of using digital technologies to create
new or modifying the existing business process and customer experiences to meet
changing business and market requirements. In reimaging of business in the age is
digital transformation.
Meaning :-
Digital transformation is the process of using digital technologies to create new — or modify
existing — business processes, culture, and customer experiences to meet changing business and
market requirements. This reimagining of business in the digital age is digital transformation.
OR
It refers to the use of digital technology to materially evolve or create new business
processes.

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Goals of Digital Transformation
Digital transformation enables an organization to better serve its principal stakeholders: customers,
employees, partners and shareholders. The integration of computer based digital technologies in business
operations helps organization do the following:
1. Increase in speed to market with new products and services;
2. Increase in employee productivity;
3. Increase in responsiveness to customer requests;
4. Gain more insight into individual customers to better anticipate and personalize products and services; and
5. Improve customer service, especially in providing more intuitive and more engaging customer experiences.
Different Types of Digital Transformation
1) Customer Experience
2) Operational Processes
3) Business Models.
Benefits of Digital Transformation
 Improved Efficiency
 Increased transparency
 Cost Savings
 Revenue Growth 5
 2. BIG DATA ANALYTICS IN ACCOUNTING
Big data analytics is the process of collecting, examining, and analyzing large
amounts of data to discover market trends, insights, and patterns that can help
companies make better business decisions.
OR
Big data analytics is the use of advanced analytic techniques against very large,
diverse big data sets that include structured. Semi-structured and unstructured data.
From different sources, and in different sizes from terabytes to zettabytes.
Big data is data that has exploded in one or more of these ways:
 Volume
Variety
Velocity
Veracity
Company Data
Consumer Data
Sensor Data
Syndicated Data 6
Benefits for Data Analytics in Accounting

In the current business climate, almost every industry is being driven by

Big Data, including Accounting. Accounting Data Analytics can help to make
effective business decisions and meet client expectations. Below are some of the
benefits of incorporating Data Analytics in Accounting:
1. Monitoring and Improving Business Performance:
2. Improving the client Experience:
3. Identifying and Managing Risks:
4. Generating Higher Profit Margins:
5. Cash Flow Analysis:

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 3. CLOUD COMPUTING IN ACCOUNTING
Cloud Computing refers to ‘a storing and accessing data and programs
over the internet instead of a computer’s hard drive’. When an individual store data
on or run programs from the hard drive, that’s called local storage and computing.
BENEFITS OF CLOUD COMPUTING
1. Access Accounts Anywhere:
2. Access to Real Time Information:
3. Access to the App Eco-system:
4. Live Bank Feeds:
5. Working with Latest Software Version:
6. Secure Sharing of Data:
7. Connected Online Payments:
TYPES OF CLOUD COMPUTING
8. Public cloud,
9. Private cloud,
10. Hybrid cloud.
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 4. ACCOUNTING WITH DRONES
What are Drones?
Drones are unmanned aircrafts generally used during war time. Sometimes they
are also used to deliver packages and also used during construction of sites.
Meaning :- Accounting with Drone refers to ‘the use the technology to
dramatically some business processes, while automating others’. Drones are
used now on construction projects from the initial site survey through to building
completion, site surveys which would have taken two or three weeks for humans
can be completed in a matter of hours using a drone armed with image capture
software.
Benefits of Drone technology in Accounting :-
1. Cost-savings
2. Security
3. Efficiency
4. Accessibility
5. Digitalization

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 5. FORENSIC ACCOUNTING
Forensic Accounting is an art of investigation over accounting records, financial
statements, and other related financial records. The result of the investigation
mostly uses for legal support and resolving conflict.
OR
it is a type of accounting that investigates financial information for potential
evidence of crimes.
TYPES OF FORENSIC ACCOUNTING
1. Financial theft ( customers, employees, or outsiders)
2. Securities fraud
3. Bankruptcy
4. Defaulting on debt
5. Economic damages (various types of lawsuits to recover damages)
6. M&A related lawsuits
7. Tax evasion or fraud
8. Corporate valuation disputes
9. Professional negligence claims
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10. Money laundering
 11. Privacy information
12. Divorce proceedings
Uses of Forensic Accounting:-
1. Litigation support.
2. Criminal investigations.
3. Insurance.
4. Business diminution report.
5. Professional malpractice report.
6. Wrongful termination report.
Types of Forensic Accounting Services
1. Criminal Investigation Service
2. Dispute Resolution Service
3. Insurance Claim Review Services
4. Fraud Investigation Service
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 6. ACCOUNTING FOR PLANET
Planetary Accounting is a way of translating non-negotiable environment limits
(Planetary Boundaries)- such as Climate change. And biodiversity loss- into actionable,
science based, environmental budgets that can be scaled for use any level.

7. CREATIVE ACCOUNTING
Creative accounting consists of accounting practices that follow laws and required
laws and regulations, but capitalize on loopholes in accounting standards to falsely
portray a better financial image of a company.
Objectives of Creative Accounting :-
1. Increased Profit
2. Management Motivation
3. Seeking Promotions
4. Takeover and Acquisitions
5. Other objectives

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 Types of creative accounting:-
1. Invoicing
2. Service Contracts
3. Property Values
4. Loans
8. OUTSOURCED ACCOUNTING
Outsourced accounting is the assigning of accounting, bookkeeping, and/or compliance
work to accounting professionals in another country.
OR
Outsourced accounting is ‘a service which provides a full, accounting department experience
for small businesses. An accounting department handles the day-to-day transaction coding,
accounts payable, accounts receivable, payroll, management financial reporting and many
other services.’

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 Benefits od Outsourced Accounting
The following are the benefits of outsourced accounting:
1. Accessing expert advice
2. Meeting compliance requirements
3. Reducing business costs
4. Improving productivity
5. Gaining valuable time

9. PREDICTIVE ACCOUNTING
Predictive accounting is founded on the observation that events have a sequence-certain
events precede and other events follow. At any point in time, certain events have already
occurred that will largely dictate the upcoming short-term events.
OR
Predictive accounting refers to is ‘a projects future financial performance using a statistical
understanding of an organization’s processes. Predictive accounting seeks to understand the
future. It is not tarot cards. It is based on the observation that much of an organization’s work
is repeatable. The work steps of these activities have been well thought out and provide an
“invisible hand” that guide’s daily work.’ 14
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