What might be the "next big things" on the internet?

The internet has facilitated many monumental changes in the traditional business function. Its wind of change is now firmly fixed to rock the boat for the steadfast bean counters. An un-relinquishing thirst for knowledge has been exposed by the internet as a consequence of the ease of research. This has prompted these changes which are currently being pushed by the combined efforts of the largest accountancy firms;

“In their Utopian fantasy, out would go quarterly reports loaded with complex historical figures and rules-dictated footnotes. Instead, readily accessible updates on a company's state of health would be posted in (almost) real time on the internet.” [3]

This recent announcement, if it pans out in the way which has been proposed will completely revolutionise the current accounting practice and pose significant implications concerning my future prospects. This is the reason I chose to concentrate on this emerging challenge.

Investors and other groups of stakeholders feel that the current static reporting is inadequate within today’s fast track business environment. The widespread adoption of ecommerce has “made it possible to gather more data significantly faster than before.” [1] Current processes to record these rapid transactions are not fit for the challenge requiring an entirely new system.
Many of the essential components required for the transition to “Real Time” reporting are already in place. Since the beginnings of the 21st century many large companies have toiled with the implementation of Enterprise Resource Planning (ERP) systems. A full blown ERP system may be wholly uneconomic for the small to medium sized organisation. In response slim lined versions are becoming available from firms such as; AccTrak21, to accommodate the revisions for all.
This technology is designed to centralise the information output of every distinct activity within the organisation. The goals of this software are comparable with the intentions behind the real time proposal, namely to un-obstructive the data collection and interrogation process. By effectively posting this information online via the companies website, replacing the archival of financial reports. Up to the minute results become assessable for any interested party to analyse and interpret.
“It wasn't too long ago that corporate accountants could take their time assembling, analyzing and packaging financial data for executives. It took a while to massage the numbers, and that wasn't a problem because the competition was moving at the same sluggish pace”. [3]
Whilst eventually every organisation would be subject to these new requirements, so that the information advantage would be cancelled out. It does raise concern for the early adopters. Competitors would gain insight into the current sales patterns and mark up. From this knowledge they may be able to adjust their policy to counteract these observations appropriately.
The also exists a suitable format to display this information, XBRL, eXtensible Business Reporting Language. This is a derivative of the present XML / RSS technology. Not only is un-molested data presented immediately to the user, it is also made vastly more interrogatable through the use of these tags. The job of the analyst is seriously under threat from the enhanced capabilities of the new system. Individuals can more readily filter specific data they may require, the creation of “wiki” accounts.
This is the predominant facet that makes managers less than cooperative to join. As information is published in near real time there is little opportunity for managers to be selective in their announcements, there may also be a distinct lack of narrative to explain or qualify the results.
While this real time was intended to empower investors, “the development of such access would create major problems for both management and the financial world - more problems than it would solve.” [1]

Real time reporting is bound to favour select industries or company practices. Variants across the results may lead to in appropriate conclusions being drawn. For example; the seasonality of some business may not be reflected well by the new system which may induce investor prejudice and short-termism amongst the markets. In theory the requirement of keeping accurate information should benefit the company however this may not materialise is it is not comprehended correctly by investors.


Bibliography;

• [1] Real-Time Accounting, Paul Ashcroft. The CPA Journal. New York: Apr 2005

• [2] Harnessing technology: Real time, real problem? Abid Shah, Andrew Higson. Accountancy. 1997

• [3] Real-Time reporting, Maria Trombly. Computerworld. Framingham: May 8, 2000

• [4] Opening the books; Auditing firms, The Economist, 2006

• [5] http://www.acctrak21.com/ecommerce.shtml