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Information Technology Knowledge and Skills for Accounting Graduates: An

Insight from Public Accounting Firms

Article in Indian Journal of Science and Technology · May 2017

DOI: 10.17485/ijst/2017/v10i12/112976

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 ISSN (Print) : 0974-6846
Indian Journal of Science and Technology, Vol 10(12), DOI: 10.17485/ijst/2017/v10i12/112976, March 2017 ISSN (Online) : 0974-5645

Information Technology Knowledge and Skills

for Accounting Graduates: An Insight
from Public Accounting Firms
S. M. Amirul*, R. Mail, M. A. Abu Bakar and N. Ripain
Accounting Centre, Faculty of Business, Economics and Accountancy, Universiti Malaysia Sabah, 88400 Kota
Kinabalu, Sabah; [email protected], [email protected], [email protected], [email protected]

Abstract
This research seeks to discover the IT knowledge and skills for accounting graduates which are essential for them to work
competently in the industry at the early stage after graduation. In line with the evolvement in technology, it is crucial for
accounting graduates to acquire and master accounting-related skills and topics associated with technological innovations,
including hardware and software, for them to be resourceful, starting from their first day in the profession. Hence, this
study is proposed to provide insight on the expected IT knowledge and skills among accounting graduates from the
perspective of industry, specifically public accounting firms in Malaysia. Our descriptive findings reveal that knowledge
and skills in accounting software, accounting system, database concept and analysis, project management and business
process are essential for accounting graduates. This finding may be used as a basic guideline to enhance IT knowledge and
skills for accounting graduates, by incorporating these IT elements into specific accounting degree program course, which
is accounting information system. With this, it is hoped that the supply of future accountants by educational institutions
are of high quality as expected by the industry.

Keywords: Accounting Graduates, Accounting Information System, Information Technology,

Public Accounting Firms

1. Introduction with the notion that accounting as a profession is not

functioning in isolation and stand alone, rather influential
Rapid development in Information Technology (IT) has and subject to the influence of other discipline3-6 such as
posed many challenges and opportunities to accounting IT. Therefore, it is advocated that continuous effort must
profession. Indeed, it expands the role of accountants be put to equip future accountants with sufficient IT
and the way they deliver services is now more than their knowledge and skill as the interconnectedness between
conventional boundary that limited to updating records IT and accounting functional areas in an organization is
and files through computer programs. IT enables them to invariably important. This effort must be done as early as
enhance their services to perform added values activities at the formal level of accounting education. For instance,
such as analysis and design, evaluation and use of Ahmad7 has emphasized the importance of increasing
information systems (IS)1. More importantly IT enhances IT competency among accounting graduates. In a more
more quality and timely report that enable better decision specific tone Cory and Peruske8 emphasized that, for
making process. accounting graduates to be able to perform productively
Furthermore, IT enables accountants to deliver as early in their first day of employment, it is essential
services that usually performed by others in the profession, for them to have a solid foundation in understanding
such as those of auditors and management accountants, and mastering the accounting-related skills and topics
which require an understanding of how their companies’ associated with technological innovations, including but
computer systems work 2. This scenario consistent not limited to hardware and software.

* Author for correspondence

 Information Technology Knowledge and Skills for Accounting Graduates: An Insight from Public Accounting Firms

However, as IT has been progressing dynamically and profession is being ubiquitously affected by advances
constantly updated, the field of IT is diverse and wide. in IT 13. However, the dissatisfaction with the quality of
Thus, it is notable that not all IT knowledge and skills are accounting graduates and their skills has been widely
related to accountants’ specific role, and consequently not evidenced 14-15.
all either are applicable to accountant’s functional area9. Albrecht and Sack16 suggest that the business
While existing literature have provided vast discussion environment is speedily changing due to globalization
on the skills and knowledges pertinent to accounting and evolving technology. As a result, accounting faculty
graduates, insofar report on Malaysian case is rather must continuously evaluate their program to ensure that
limited due to limited attention given to specific IT they are preparing graduates with the skills and content
knowledge and skills for accounting students inspite the knowledge needed by today’s accounting professional.
fact that accounting and IT are interrelated in practice. Cory and Pruske8 stated that, in the case of specific
Thus, this study is conducted to provide insight on the accounting courses; it will not be easy to provide courses
relevant IT knowledge and skills that are seemingly that cover all accounting-related skills and topic to satisfy
important for accounting graduates, from the perspective the both public and non-public sectors in the accounting
of industrial players in the context of public accounting profession. Therefore, following Cory and Peruske, and
firms in Malaysia. The main inspiration of this research is Tam 8-9 this study covers the specific accounting related
the need to highlight the expected relevant IT knowledge skills and IT knowledge based on prior literature in the
and skills for accounting graduates so that educational setting of within Malaysian context.
institutions can equip their accounting graduates with
skills and knowledge parallel with the expectation from
the industry. In respect to that motivation this paper
3. Human Capital Theory and
adopts the definition of ‘relevant’ IT knowledge proposed Stakeholder Theory
by Tam9:
“All IT concepts, knowledge, skills, tools, use of Human capital theory contends that earnings are
standard office software and specialized software determined by workers’ productivity which is determined
applications to allow accounting graduates to perform in turn by their education and experience17. It also
competently in their first five years of practice after postulates that increases in the supply of education are
graduating from an accounting major degree programme”. responses to increased demand for skilled labour18. As
It is argued that the findings of this study are useful such education is recognized as an investment in human
as a reference or basic guideline in aligning accounting capital. Employers require graduates of higher education
courses or syllabus to be offered at the higher level of institutions to possess abilities and skills that coincide
accounting education, particularly courses pertinent to with those required by their organisations19.
Accounting Information System (AIS). Since the intention of this research is to identify the
AIS is an interdisciplinary in nature and seems to perceived necessary IT knowledge and skills required
integrate the fields of accounting and information system for accounting graduates from the industry, therefore
(IS)10. This opinion is supported by Bagranoff11 who students/graduates and employers are the stakeholder
claimed that AIS courses stand at the intersection of groups that are closest to the workplace and are the
two disciplines which are accounting and Information groups that can best articulate on the IT knowledge.
Technology (IT). Hence, through this AIS courses It is essential for education institutions to be able to
accounting graduates’ competency in IT knowledge and provide necessary skills and knowledges parallel with the
skill can be improved. industry’s expectation for promising future job career.

2. Literature Review 4. Methodology

Information technology (IT) is crucial for the professional This research applies the quantitative methods by using
accountants due to its pervasive use in the business primary data directly obtained through questionnaires.
world12. Today, almost every aspect of the accounting The questionnaire was adapted from Cory & Pruske8 and

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 S. M. Amirul, R. Mail, M. A. Abu Bakar and N. Ripain

Tam9. A total number of 185 questionnaires distributed Similar feedbacks were drawn where 40 percent of the
to firms, but only 55 questionnaires were returned. The respondents also agreed the importance of understanding
respondents were selected from small and medium and knowing the accounting systems. These include for
companies holding a position ranging from executive, example the understanding of the business system, ERP,
senior executive, manager and senior manager. The CRM, GL reporting cycle, Revenue cycle, purchasing cycle
measurement of necessary IT knowledge and skills for and HR/payroll cycle. Yet 28 percent of them considered
accountting graduates consisted of 14 items of questions this to be very important, contrary to 4 percent as not
which are assessed using a six-point Likert scale ranging important.
from 1 to 6, of which 1 meaning ‘not needed’, 2 meaning Most respondents, at 38.8 percent, reported that
‘not important’, 3 meaning ‘neutral’, 4 meaning ‘fairly an understanding of data analysis and the ability to use
important’, 5 meaning ‘important’ and 6 meaning ‘very Audit Command Language (ACL) in their employment
important’. is subject to a degree of being important, while only 24.4
percent report that it is very important. Marginally, only
6.1 percent of them responded this dimension as neutral.
5. Results The motivation to use ACL into their comprehensive risk
The survey examined 55 respondents on necessary IT assessment, audit management, work papers, etc. is also
knowledge and skills for accounting graduates covering related to the individual’s perception. If the user perceived
period of first to five years ofemployment in an accounting the ACL to be useful and easy, he/she will have a high
capacity. Table 1 presents that majority of the respondents, interest to use this technology.
92.7 percent, working in a public accounting/audit In terms of the understanding of database concepts
firm, with only 1 respondent or 1.8 percent work in a and the use of database software for the purpose of
manufacturing industry. The remaining of 3.3 percent database searching, database retrieval and access, 26.5
comes from the financial services. percent of respondents indicate that it is very important,
38.8 percent considered this as important, while only 8.2
Table 1. Respondent distribution Based on the percent reported neutral for them to understand how
industry database works. When it comes to the use of this database,
Firm Frequency Percent more than 30 percent of them respectively claimed it is
Manufacturing 1 1.8 fairly important, important and very important.
Public Accounting / Audit firm 51 92.7 On the question whether the respondents placed
Financial services / Banking / Insurance 3 5.5 a relatively high importance on understanding the
Total 55 100.0 system flowcharts, Document flowcharts and Data flow
Source: Data Processed diagrams, 22.4 percent of the respondent stated this as
Table 2 describes the responses of the 55 respondents very important, 30.6 percent agreed to be important and
surveyed in the current study. In general, respondents are 38.8 percent of the 55 respondents reflected this to be
aware and acknowledge the importance of IT knowledge fairly important.
and skill set requirement during their employment. In addition, the statistic shows that general knowledge
When they were asked about the use of accounting in IT skills is essential at the workplace and other areas
software in their daily task such as MYOB, Great Plains, of life. Nowadays people need IT knowledge to browse
SAP, Oracle, Tax return software, etc., more than 40 the web, produce report using spreadsheet and even
percent agreed that the knowledge in using these manipulate data stored in a database. This computer skill
accounting software is important, and only a small also assists people to have better understanding of the
number of which 6 percent claimed it is rather neutral for features and functions of computer software and hardware.
them. The practice of using accounting software by the Hence to address this dimension of an understanding
audit firm is now common to the large and even small and transaction processing system, and end-user computing,
medium size firms. Besides, the knowledge in running 44 percent reported as fairly important and relatively a
and using this accounting software is crucial to ensure the small number of 4 percent reported as very important.
efficiency in completing the audit/accounting task. A plausible explanation is that people perceive that an

Vol 10 (12) | March 2017 | www.indjst.org Indian Journal of Science and Technology 3
 Information Technology Knowledge and Skills for Accounting Graduates: An Insight from Public Accounting Firms

advance IT skill set is not necessarily required in an audit With regard to IT control which address issues of
firm particularly small and medium size firm, unless the internal control, computer fraud, IT audit and controls to
firm is heavily applied in IT work task. personal computers, 34 percent of respondents agreed the
Furthermore, an understanding of The Accounting importance of IT control to be well establish in a firm,
and Information Systems Audit and Control in the while 14 percent of the respondent reported neutral.
IT infrastructure to establish quality audit placed, the Further, for common and basic computer presentation
respondents to agree statistically of 38 percent as fairly software such as Power Point / Prezi, results indicate
important, 30 percent to be important and 20 percent that 36 percent of the respondents claim this to be fairly
very important. Meanwhile, only 12 percent out of 55 important, while another 2 percent not important. This is
respondents gave neutral feedback. because respondents notified that this software and skills
On the use of IT audit software and CAAT, the have been exposed to accounting graduates since they
respondents deemed considered this to be important as were studying in the tertiary level.
well with the response rate of 34 percent. Nevertheless, a Another interesting finding is on the ability to
small number percentage of 2 percent responded that it understand business process and operation, as well
is not important for them. Today’s environment require’s as ability to analyse the critical element of running a
IT auditing to be the integral part of audit function since business for example how to reduce cost, methods in
it supports the auditor’s judgment on the information improving business performance and business process
processed by computer systems. Besides, audit staff will management system. This element of dimension has been
look forward to use the IT auditing in their job especially ranked by respondents to be important by 40 percent, 34
for technical assistance since the auditor’s role has greatly percent fairly important, 14 percent very important and
evolved in order to provide assurance in their audit report. 12 percent neutral.

Table 2. Descriptive of 14 dimension on IT knowledge and skills requirement for accounting graduates
Dimensions Details NN NI N FI I VI
Accounting Software Application/Use of MYOB, Great Plains, SAP, Oracle, 6 22 44 28
Accounting software Tax return software, Electronic
working papers, Time management and billing Systems, etc
Accounting System Understanding business systems, ERP, CRM, GL reporting 4 6 22 40 28
cycle, Revenue cycle, Purchasing cycle, HR/payroll cycle
Data analysis/ Use of Audit Understanding of data analysis and ability to use Audit 6.1 32.7 38.8 22.4
Command Language Command Language
Database concepts Understanding database concepts 8.2 26.5 38.8 26.5
Database software Use of database software, database search and retrieval 6.1 32.7 30.6 30.6
(e.g. Access)
Documentation tools Understanding System flowcharts, Document flowcharts, 8.2 38.8 30.6 22.4
Data flow diagrams
General systems knowledge Understanding transaction processing system, end-user 2 10 24 44 16 4
computing
Information system auditing Understanding The Accounting and Information Systems 12 38 30 20
Audit and Control
IT audit software Use of IT audit software, CAAT 2 22 14 34 28
IT controls Internal control, computer fraud, IT audit, controls to 14 26 26 34
personal computers
Presentation software Use of presentation software (e.g. Power Point / Prezi) 2 14 36 28 20
Process/Operational Im- Ability to analyze Reduce cost, improve performance and 12 34 40 14
provement business process management systems)
Project Management Understanding and able to use project management 2 2 6.1 36.7 38.8 14.3
software such as Microsoft project
Cloud Computing Understanding and able to use cloud computing in daily 38.8 37 14.2 6 2 2
task
NN= Not Needed, NI= Not Important, N= Neutral, FI=Fairly Important, I=Important, VI=Very Important

4 Vol 10 (12) | March 2017 | www.indjst.org Indian Journal of Science and Technology
 S. M. Amirul, R. Mail, M. A. Abu Bakar and N. Ripain

Next, is to access the importance of understanding process and operation and ability to analyze that may
and the ability to use project management software such result in reducing cost, improve performance and
as Microsoft project. On average, the statistic revealed this business process management systems through usage of
as 36.7 percent to be fairly important and 38.8 percent to technology such as ERP, MRP, JIT, etc, are also deemed
be important. Finally, pertaining to cloud computing the to be crucial for accounting graduates. Last but not least,
result reveals that, most of the respondent considered this knowledge and skill in project management is not of less
as not needed, presented by 38.8 and 37 % not important, important as the industry also perceived it to be important
14.2% fairly important, while only 2% respectively as it relates to implementing a new system.
considered this to be important and very important.
The reason might be due to cloud computing is a new
technology and not widely used by the respondents of
7. Conclusion
which most of them are from public accounting/audit The paper mainly focuses on providing insight on the
firms. specific necessary IT knowledge and skills for accounting
graduates from the perspective of industry, specifically
6. Discussion from the public accounting firms in Malaysia. It deliberates
how IT has affected and influence the accounting
Based on the overall results and findings of the study, profession which consequently demands accountants
out of fourteen IT listed knowledge and skills there are to possess knowledge and skills that related to the IT.
six those can be considered as significant to be mastered Precisely, the study considers specific core accounting
by accounting graduates. Knowledge in accounting information course which is accounting information
software such as MYOB, UBS, Great Plains, SAP, Oracle, system that relates to information system and technology.
Accounting software Tax return software, Electronic Hence, the study seeks to give insight on the relevant IT
working papers, Time management and billing Systems, knowledge and skills to be integrated into the course so
etc. is of important due to most of the businesses are that it is parallel with the expectation to the industry.
using it on daily basis for recording economic data/ While this study may be useful as a basic guideline and
transactions. Accounting graduates are also expected to reference, future study is suggested to come up with a
have good understanding in accounting systems such as model to be integrated in teaching course of accounting
ERP, customer relationship management (CRM), general especially in accounting information system (AIS). It is
ledger (GL) reporting cycle, revenue cycle, purchasing essential that a set of clearly defined IT knowledge and
cycle, human resources (HR)/payroll cycle as it is claimed skills for accounting graduates to be developed to serve
to be a pre-requisite for being an accountant even at a as a guideline for accounting education. This may include
junior level. consideration for time and resources that may be required
Additionally, the accounting graduates are expected in order to make sure that accounting graduates acquired
to understand the relationship between journal entries the skills and knowledges equivalent to the requirement
and the various sub-systems such as the accounts from the industry. For instance, the finding has important
receivable, accounts payable, general ledger, etc. Besides implications on how databases should be taught in an
that, competency in database analysis and concepts are accounting major programme structure such as AIS.
also one of the IT knowledge and skills that must be Other than that, since majority of the respondents come
possessed by accounting graduates. The reason may be from public accounting/audit firms, therefore it can be
due to fact that all accounting software have a database in concluded that, the findings provide insight from the
the background. Thus it demands accounting graduates public accounting firms.
not only to have an understanding of what a database
is, but also know how to retrieve data from databases,
thus enable them to become system designers as well as
8. Acknowledgments
creating database. This work was fully supported by Universiti Malaysia
Apart from that, IT knowledge and skills in business Sabah under Research Grant No. SBK-0246-SS-2015.

Vol 10 (12) | March 2017 | www.indjst.org Indian Journal of Science and Technology 5
 Information Technology Knowledge and Skills for Accounting Graduates: An Insight from Public Accounting Firms

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