Determinants of digitalization in the accounting function
A quantitative study
Negin Ghorbani
Department of Business Administration Master's Program in Accounting
Master's Thesis in Business Administration III, 30 Credits, Spring 2019 Supervisor: Dennis Sundvik
I
Acknowledgment
This journey would not have been possible without the support of my family, supervisor, and friends.
To my family, thank you for encouraging me to explore new directions in my life and find my own destiny. I am especially grateful to my parents, who supported me emotionally and financially for giving me the opportunities and experiences that have made me who I
am. I am grateful to my sister for always being there for me as a friend. I count myself lucky for having you as my family.
To my supervisor Dennis Sundvik, I would like to take this opportunity to thank you for your support, guidance and useful advices during the thesis course.
To my friends, thank you for listening, offering me advice, and supporting me through this entire process.
And finally, I am grateful for all the participants, who could give me valuable information, which were greatly important to complete this study.
Umeå 2019-05-23 Negin Ghorbani
Negh0003@ad.umu.se
II
Abstract
Technology grows continuously within the accounting field. A lot of new technologies have been invented in order to make facilities for the accountants and increase the quality of their performance, but there is less research on what accountants need based on the characteristics of the firm that they work for. There are a lot of different kinds of obstacles to investigate and implement new technology. Sometimes it happens that a company implements a new “trendy” technology just to be up to date with the market, but after a while they see that the technology is not suited for their firm’s employees or the size of the firm. Therefore, both investors and technology creators need to be aware of the firm characteristics and its need. On the other hand, employees or graduating students need to prepare themselves for the real competitive market and it is necessary for them to know which kind of skills they need to know and which knowledge they need to learn in order to be able to enter the job market. Consequently, universities as a place that have significant roles to educate and skilling students and make them ready for the real market need to keep the curriculum up to date and in line with the market demands. Therefore, the purpose of this study is to extend the current knowledge of the potential effects of various firms’ characteristics on digitalization in accounting function and the need of new skills by providing an answer to these two main questions:
➢ What is the relation between the level of digitalization in accounting function and the characteristics of firms?
➢ What is the relation between the level of digitalization in accounting function and the need of skills among the employees of an accounting function?
Findings from the empirical data show that accounting functions currently need to have an accountant with IT base knowledge and cloud computing knowledge besides the accounting knowledge. Moreover, results show that not all the firm characteristics have a significant role to develop and implement the new technologies within accounting functions.
Keywords: Automated accounting, Blockchain, Big data, Cloud accounting, Digitalization in accounting, Digitalization, Technology of accounting, Profession skills, and Accountant skills.
III Table of Contents
Determinants of digitalization in the accounting function ... 1
A quantitative study ... 1
1. Introduction ... 1
1.1. Background ... 1
1.2. Problem discussion ... 3
1.3. Research question ... 4
1.4. Research purpose ... 5
1.5. Delimitations ... 5
1.6. Outline of the report ... 6
1.7. The concepts in an empirical context ... 6
1.7.1. The evolution way of working ... 6
1.7.2. Cloud accounting ... 7
1.7.3. Internet of Things in accounting ... 8
1.7.4. Blockchain in accounting ... 9
1.7.5. Big data in accounting ... 10
1.7.6. Tools for visualization ... 10
2. Theoretical framework ... 12
2.1. Technology development ... 12
2.2. Theory of professions ... 12
2.3. Firm characteristics theory ... 13
2.4. Disruptive innovation ... 14
2.5. Organizational change ... 15
2.6. Institutional theory ... 16
2.7. Definition of hypotheses ... 17
3. Method ... 19
3.1. Preconceptions and background ... 19
3.2. Research philosophy ... 19
3.2.1. Ontology ... 20
3.2.2. Epistemological assumption ... 20
3.3. Research approach ... 22
3.4. Research design ... 24
3.5. Literature search ... 24
3.6. Data collection ... 25
3.6.1. Sample ... 26
3.6.2. Presentation of respondents ... 27
3.6.3. Data gathering procedure ... 28
IV
3.6.4. Ethical considerations ... 28
3.7. Analysis method ... 29
3.7.1. Descriptive statistics ... 29
3.7.2. Correlation analysis ... 29
3.7.3. Regression analysis ... 30
4. Results and Analysis ... 31
4.1. Definition of variables ... 31
4.1.1. Other variables ... 31
4.2. Data analysis ... 33
4.2.1. Result and analysis of the level of digitalization in the accounting function ... 33
4.3. Test of significance ... 35
4.4. Descriptive statistics ... 35
4.4.1. Results and analysis of the influence of digitalization on accounting... 37
4.4.2. Results and Analysis of obstacles to digitalization ... 37
4.4.3. Results and analysis of develop competencies and skills ... 40
4.4.4. Results and analysis of the participants’ perspective ... 41
4.5. Results and analysis of the correlation coefficient of the relationship between firm characteristics and the level of digitalization in the accounting function ... 42
4.6. Results and analysis of the correlation coefficient of the relationship between firm characteristics and the Paperless accounting ... 50
4.7. Results and analysis of the relation between the firm’s age and the firm’s size with the use of in-house or outsource accounting ... 53
4.8. Regression analysis of the relationship between firm characteristics and the level of digitalization in the accounting function ... 53
4.8.1. Results and analysis of the importance of the changes in the university curriculum on level of digitalization in the accounting function ... 54
4.8.2. Results and analysis of the importance of learning new technologies on the level of digitalization in the accounting function ... 55
4.8.3. Results and analysis of the importance of adapting to new equipment on level of digitalization in the accounting function ... 56
4.8.4. Results and analysis of the importance of teaching the accountants individually or in the group on the level of digitalization in the accounting function ... 57
4.8.5. Results and analysis of the importance of receiving digital skills training in accounting function on the level of digitalization in accounting the function ... 57
4.8.6. Results and analysis of the importance of business strategy on the level of digitalization in the accounting function ... 59
4.8.7. Results and analysis of the importance of changes by digital accounting tools in future on the level of digitalization in the accounting function ... 59 4.8.8. Results and analysis of the importance of viewing the digitalization in
accounting as a threat among the accounting function on the level of digitalization . 60
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4.8.9. Results and analysis of the importance of human capital on the level of
digitalization in the accounting function ... 61
4.8.10. Results and analysis of the importance of industry on the level of digitalization in the accounting function ... 61
4.9. Discussion on finding analysis with respect to the prior literature ... 63
4.10. Theory of profession ... 64
4.11. Firm characteristics theory ... 64
4.12. Disruptive innovation ... 64
4.13. Organizational change ... 64
4.14. Institutional theory ... 65
5. Conclusion ... 66
5.1. Overall conclusion ... 66
5.2. Contributions and Socio- ethical implications ... 68
5.3. Limitation ... 69
5.4. Further research ... 69
6. Quality criterion ... 70
6.1. Validity ... 70
6.2. Reliability ... 71
6.3. Generalization ... 71
References ... 72
1 - Letter of Consent ... 83
Appendix 2 - Questionnaire ... 84
List of Tables Table 1- SME categories………...…26
Table 2- Descriptive Statistics of the relationship between firm financial characteristics and the level of digitalization……….….36
Table 3- Correlation coefficient of the relationship between firm’s characteristics and the level of digitalization………...…43
Table 4- Correlation coefficient of the relationship between Industries and the level of digitalization………..………..49
Table 5- Correlation coefficient of the relationship between firm’s characteristics and the paperless technologies……….………52
Table 6- Relation between changes in university curriculum and the level of digitalization in accounting function……….…55
Table 7- Relation between the learning of new technologies by the accountant and the level of digitalization in accounting function……….………….56
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Table 8- Relation between the adapting of new technologies by the accountant and the
level of digitalization in accounting function………..57
Table 9- Relation between the teaching the accountants and the level of digitalization in accounting function……….58
Table 10- Relation between receiving the digital skills training and the level of digitalization in accounting function………...……58
Table 11- Relation between the business strategy and the level of digitalization in accounting function……….……59
Table 12- Relation between changes by digital accounting tools in future and the level of digitalization in accounting function………...60
Table 13- Relation between viewing the digital accounting tools as a threat and the level of digitalization in accounting function………..60
Table 14- Relation between human capital and the level of digitalization in accounting function ………..……….61
Table 15- Relation between Service business and the level of digitalization in accounting function………...……….62
Table 16- Relation between Production business and the level of digitalization in accounting function……….………63
List of Figures Figure 1 – The research onion………...21
Figure 2 - The deductive process………...23
Figure 3- Presentation of respondents………27
Figure 4- Digital tools………34
Figure 5- Influence of digitalization on accounting………...38
Figure 6- Obstacles to digitalization………..39
Figure 7- Develop competencies and skills………40
Figure 8- Correlation coefficient between the size and Digitalization level………..41
Figure 9- Correlation coefficient association of ROA and the level of digitalization…...44
Figure 10- Correlation coefficient association between the level of digitalization and Leverage………..45
Figure 11- Outsource and in-house accounting ……….47
Figure 12- Type of industry………48
Figure 13- The use of digital tools in accounting function……...……….51
VII
VIII
1
1. Introduction
In this chapter, the introduction of accounting and development in technology will be presented. The need for this thesis will be discussed. The chapter also presents the research questions, purpose and limitations of the study.
1.1. Background
Accounting is a system of measuring business activities by recording, summarizing, and analyzing the firm’s financial transactions. Accounting gathers the financial information into reports and therefore, enables the decision-makers to have a better understanding of the financial and economic situation of their firm (Shekhar, nd). Depending on the users of a report, accounting can be divided into external and internal accounting. External
accounting focuses on the preparation of financial reports for external users such as banks, investors, governmental agencies, and this report is mostly about the economic situation of a firm. On the other hand, internal accounting focuses on internal users such as a firm’s managers and employees. Internal accounting gathers and analyzes the information that can be used by internal users to give them an overview of the firm’s economic situation in the future (PWC, 2018a). Each firm can choose to produce their accounting reports in- house or outsource the whole accounting function (Maelah et al., 2010, p. 226-227;
Höglund & Sundvik, 2016) to a third party, such as accounting firms or bookkeeping firms. In this paper, I focus on both outsourcing firms and firms with in-house accounting.
Accounting is a major part of any business. All businesses and firms, even non-profitable organizations are run by decisions that are made based on their financial reports. Most managers are aware of this importance and that is why accounting functions are included in all businesses and depending on the size of business this sector can include only one person or a whole department. The responsibility of an accounting function is to analyze the financial transactions of a firm and provide transparent reports. Therefore, it needs dedicated specialists to provide financial and accounting support for the firm (Ramjee, 2019). The accounting department provides a report referred to as a financial statement.
This includes the income statement, the statement of cash flow and balance sheets, or other financial statements such as tax returns (which it provides for governmental users) (Hermanson et al, 2010, p.20). Sometimes it happens that people are confusing the terms accounting and bookkeeping. Bookkeeping is indeed a part of accounting but it is not all of it. Accounting functions have more important roles in each individual business rather than only bookkeeping, as it can be quoted from Hermanson et al (2010,
p.20) “Accountants analyze and interpret financial information, prepare financial statements, conduct audits, design accounting systems, prepare special business and financial studies, prepare forecasts and budgets, and provide tax services.”
The business world is changing and developing enormously through the digital
revolutions and the accounting functions are no exception to these changes. Therefore, firms need to be prepared for new adjustments. Way back at the beginning of innovation in accounting, the invention of the calculator helped accountants for information accuracy, but still they needed to record the information on a paper (Top Accounting Degrees, 2013).
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At the end of the twentieth century, the profession of accounting started to change by utilizing new technologies. Medium-size and desk-size computers were employed for bookkeeping in banks, professional firms, etc. (Lennox, 1965, p. 893). In 1961, Professor Richard Mattessich developed the first computer-based spreadsheets for use in accounting functions (Power, 2004, p.1). These developments in technology had amazingly continued with the invention of accounting software and an important achievement happened
between 1984-1985 with the release of Microsoft Excel. The first version of Microsoft Excel was launched for Apple Macintosh (Power, 2004, p.2) and the Windows version was released in 1987 (Cis poly edu, nd). Microsoft Excel helped the accountants to put the paper and calculator aside and enhanced the speed in their day to day tasks and routines.
Now accountants have the time to spend on more sophisticated analysis and perform statistical accounting with greater efficiency to predict the firm’s financial situation (Pepe, 2011). Until 2009, the use of computer technology in accounting was still not broad and common (Mukhametzyanov et al., 2017, p. 1233-1234). Although, the use of
digitalization became popular among the companies after a while. Companies started to accept the new technology and understood the importance of the digitalization and its implication in data security, storage as well as its importance in improving the accounting services. The use of digitalization by many companies consequently affected the price of these technologies and reduced the prices for software, internet-based technologies, and programs. Additionally, digitalization enabled businesses to grow more than ever by changing their business model. For example, it enabled the mobility of the workplace, users as well as the business functions and the, emerge of multi-sided businesses (Juribita, 2017, p. 656-666).
Today, accounting software is widely used in accounting functions. In our modern and competitive business world, it is almost impossible to have an efficient accounting system without using digitalization in a firm’s accounting process. Therefore, technology
development through the accounting field has become a Megatrend p. 4; PwC, 2018b). A Megatrend is described as a macroeconomics and global forces that are developing and shaping the businesses and cultures. Megatrends are big and include lots of opportunities and consequently a lot of challenges for the business (Modly, 2016). Megatrends have different impacts and different types for different industries, therefore it is crucial for a company or an industry to analyze and implement the related megatrends (Efrat, 2016).
The standardization of accounting reports is one of the reasons that prompted accounting functions to automate their accounting processes which are known as automated
accounting. Automated accounting has been growing vastly and is still growing (Uwadiae, 2015).
According to KPMG (2017), there are four main concepts that have shown a fundamental effect on the automation of the auditing field. These four concepts include: cloud
accounting, Internet of Things (IoT), blockchain, and big data. Although, there are some debates about the recognition of these four concepts as main trends in accounting
functions (e.g. Dai & Vasarhelyi, 2017, p. 5-6; Dimitriu & Matei, 2014, p. 842; Fleisch, 2010, p. 133-134; Richins et al., 2017, p. 76). As Meuldijk argues, while the technology and digitalization are developing and progressing among the industries, there is a high level of uncertainty about what technologies are going to be successful over the coming 3 to 10 years to become a trend (KPMG, 2017). Therefore, this thesis focuses on these four concepts of digital technologies that companies are already using and/or willing to use them in the future.
The technological growth and the need for implementation of newly emerged technologies force the industries and companies to adapt themselves with the trends. Therefore, the
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necessity of achieving new skills and qualifications by employees becomes more significant than ever. The result of a study in Germany indicated that the qualifications required for employees in accounting should be developed more and more in the direction of IT by 24 percent compared to the status quo (KPMG, 2017b). The competitive pressure and technologies have forced accounting graduated students to increase their non-
accounting skills and capabilities. These capabilities and skills have a significant role when the accounting professionals start their new chapter of life among real businesses and in a real working environment. In this situation if they have achieved this required knowledge from a university they can be successful in their new role as an accountant.
Therefore, the old syllabuses and courses would not be enough for the needs of today’s job market (Kavanagh & Drennan 2008, p. 281).
1.2. Problem discussion
The impact of automation has been studied by many researchers in previous years.
Nevertheless, most of the research has emphasized the proletarian jobs which the labor union claims that will disappear by technological developments, and human force will be replaced by machines for these jobs (Hanley, 2014, p. 401). On the other hand, scholars have shown that new jobs would be created in the cases that machines take the routine jobs (Arntz et al., 2017, p. 158-159; Autor, 2015, p. 4-5). This problem can be expanded to the accounting field since there is not any exception when we are talking about technological development. It seems that there are fewer investigations about the accounting area or in other words, white-collar jobs (Kepes, 2017).
According to Tekbas (IFAC, 2018), traditional accounting methods such as paper, declaration, registration, etc. will be replaced by internet-based accounting such as cloud and blockchain. Many of the transactions will be done by artificial intelligence and automated systems. Therefore, to accept and be able to use these changes and
developments to rebuild or improve the structure of existing businesses the accounting functions will need a workforce that has more technological competence and knowledge.
Changes are coming at different stages of the business process and consequently they bring some challenges with themselves, this is due to the barriers on the way of their implementation (Teece, 2010).
Güney (2014, p. 855), Zhang and Gu (2013, p. 143) discussed in their research for change in educational systems. They believe that the need for accounting skills decreases by time and instead of that, the need for technological skills decreases. Therefore, the employee’s skills have to be change accordingly. In the other study, Taipaleenmäki and Ikäheimo (2013, p. 342-343) argue that technology changes and development influence the
accounting firms as well. For example with an easy accounting program, there will not be a need for an accountant to do the firm’s bookkeeping.
Moreover, implementation of the new technologies, for example, big data in accounting makes the new needs for the accountant to go to the new level. Through the enormous data analysis, a human is not able to analyses the data, and therefore with gaining skills and knowledge related to the big data, accountants are able to use the computers properly in order to help them (in this example) with a part of analytical processes.
Moreover, according to Turner (2004, p.16) by growth and change in technology in the firms (The level of digitalization) the type of demands also changes. Gould (2017) discussed these changes may have a considerable impact on accounting functions as the
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other part of the firm. Consequently, these changes in technology may change the demand and expected tasks of the accountant in the future. Therefore, it is important for the
accountant or those who want to be an accountant in the future to learn the new skills, which are demanded and expected from the accountant in the accounting function.
Previous researches show that there is either relation or no relation between the firm characteristics and the use of digitalization in the firm (Level of digitalization in the firm).
Gibbs &Kraemer (2004) discuss that bigger firms are more likely to have more knowledge about the impact of technology compared to the smaller sized companies. Bresnahan et al (2002) discuss that firms that hire more employees with university degrees use digital technologies more than other firms do.
Within our knowledge, based on the present literature, some unaddressed problems demand more detailed investigations. As the first problem, we can question if there is any relation between the firm characteristics and use of digitalization in their accounting firm.
There is a gap in previous studies regarding the companies’ technology needs and their characteristics. All companies are not the same; they have different demands and expectations to utilize the technologies. It seems that studies have mostly been
concentrating on different concepts of creating automation systems. It seems most of the previous research concentrated on the correlation of the firm characteristics and amount of digitalization they use as a whole and not concentrates on a different part of the firm in detail. Since accounting functions are an important part of the firms or it is the firm itself (Accounting firm) I found the lack of research in this area and therefore I would like to find out if the firm characteristics influence the amount of use of digitalization (Level of digitalization) in accounting function as well. The other gap that can be mentioned is about the changes in the education system. As mentioned earlier according to the previous research by growing in the technology the expectation and demands from the accountant also change. The majority of scholars have briefly mentioned that the accounting
professionals will need new skills to be able to work in a real job market, but only a few studies have focused on the exact skills and educations that the accounting students need.
1.3. Research question
Technology grows every day and a new automation accounting concept is invented. The research available, is mostly about the automated accounting concepts while very little is known about a firm’s characteristics and digital needs. Although, as mentioned in the previous session and according to the previous literature it is reasonable that the firm’s characteristics will affect its demand for digitalization among the firm as a whole. I, therefore, am interested to study how a firm’s fundamental characteristics such as its industry, size, age, leverage, and performance, as well as its own thoughts about a number of other factors can affect the use of digitalization in specifically accounting functions since according to Mellemvik et al(1988) accounting functions are important “to reduce uncertainty in control and decision-making processes” in the firm. The other factors are derived from a questionnaire and cover digitalization as a part of the business strategy and what the firm thinks about the future of accounting, perceived threats, and university education. Internal accounting expertise and internal training frequency and the
importance of learning, adapting, teaching is also factors taken into consideration. Based on this gap in the literature, and the unknown relation between these factors and the level of digitalization in the accounting function, the following first research question is formulated:
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➢ What is the relation between the level of digitalization in accounting function and the characteristics of firms?
According to the previous literature, there is a controversy about the new generation of skills needed by accountants. Moreover, the literature failed to address the link between the need for a company’s accounting function for the specific skills and educations and its characteristics. Hence, this gap led me to the second research question:
➢ What is the relation between the level of digitalization in accounting function and the need of skills among the employees of an accounting function?
1.4. Research purpose
Previous research has focused on different concepts of digitalization and automation among the accounting functions. They also have started to discuss the new phenomena of the necessity of new skills and education among the newly graduated and new accounting students. The purpose of this thesis is to extend the current knowledge of the potential effect of various firm’s characteristics on digitalization among the accounting function.
This understanding can help both graduate students and current employees to be aware of the needs of different companies and prepare themselves for those requirements.
Furthermore, the aim of this thesis is also to extend the knowledge of the phenomena of new skills and education. These new changes and development in automation and
digitalization in accounting inevitably influence the accountants. As discussed earlier, the traditional accounting systems are not usable in this modern business world, therefore universities who are responsible to educate and train the future employees need to gain an understanding of the technical and practical skills and the knowledge which job market needs. It seems the education system at the university level could not adapt and could not grow as fast as the growth of technology.
Additionally, this study investigates how technology development and disruptive innovation may cause organizational changes. Moreover shows how the institutional theory causes the firms to try to make themselves more similar to the other firms by developing digital use and change or set up the business model among the firms in order to become more successful and be able to stay in the new market.
1.5. Delimitations
The focus of this study is on the accounting functions through small and medium-sized enterprises (SME) and it is not on accounting and auditing firms. I have chosen the SMEs since according to Sundvik (2017), micro, small and medium-sized enterprises are socially and economically important to study since they represent 99 % of all enterprises in the EU and provide around 65 million jobs representing two-thirds of all employment. Thereby, this study is limited to accounting functions in the firms and their accountants.
Furthermore, I have decided to conduct this study on small and medium-sized enterprises because some research has already done on larger sized firms. To realize how the
characteristics of the firm are connected to the use of digitalization among the accounting functions I have delimited the sample to different countries which are in the list of top ten most digitized countries in 2018 based on the IMD world competitiveness center.
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Therefore, the countries are Sweden, Finland, and Norway. Moreover, I have not prioritized the industry of the firm as sample selection criteria. Therefore, there are different types of industry among the sample. These three countries have been chosen because of my current living place is in Sweden and I also have eyes on the Nordic countries’ job market. In addition, in my opinion, these countries have good English knowledge, therefore it is easier for them to answer the English questionnaire.
1.6. Outline of the report
The rest of the thesis is organized as follows. In chapter 2, some of the most important concepts incorporated in the questions of the study’s questionnaire are presented. Chapter 3 represents the important theories regarding the topic, which further will be used to help the analysis of the data gathered from this research. Chapter 4 explains how the research was done and through which lens. Therefore, it includes the research philosophy of this study, the research approach employed in this study and finally, the research design is discussed. In chapter 5, the empirical findings from the questionnaire and the Orbis database are analyzed and cross-referenced with the theories mentioned in the theoretical framework chapter. The last two chapters present the overall conclusion of this thesis which simultaneously answers the research questions and describes suggestions for further research, and provides a discussion on validity and reliability.
1.7. The concepts in an empirical context
In the following section, the concepts will be further explained to give a better
understanding of their importance in the accounting field by investigating their importance in previous empirical studies. The concepts are included since they are part of new
technology and therefore digitalization in the accounting field. Furthermore, they are incorporated into the questions of the study’s questionnaire.
1.7.1. The evolution way of working
The accounting has shifted during the decades from the paper-based accounting to its first large shift when the computers were invented, until then the accounting had been done only manually and analog. The second large technological shift is ongoing digitalization.
This shift is involved in digital tools like software, Cloud accounting, Internet of Things, Blockchain, Big data and tools for visualization, etc. which given the accounting sector digitalized accounting possibilities. For the accounting section, many day-to-day tasks have been replaced with modern technology. For example, before the cloud has invented and implemented in accounting industry firms had to use locally installed software that could lead to potential memory loss. Moreover, before the blockchain innovation, the receipt, and invoices from the bank or suppliers, etc. were paper-based which it had a high risk to get lost before the participants in the transaction has received it, also it could take a long time depends on the distance between the participants of the transaction to do the transaction and payment. In general, digitalization makes the business more accurate in detail and numbers, helps to access to data easier, more secure storage, more time and cost-efficient, access to reliable as well as produce the reliable data due to the digital tools and technologies (Southern Cross University, 2016)
7 1.7.2. Cloud accounting
Cloud-based technology is one of the newest trends in accounting and information technology. Based on a study on American and Canadian companies (Robert Half International, 2017), the usage of cloud accounting among accounting firms has reached 51 %, an increase with 27 % since 2014. There are several differences between traditional on-site accounting and cloud base accounting. The cloud suppliers claim that cloud implementation is quick since it does not need to download or install any software. This facility can be important for companies with multiple locations and branches. All users then can have access to the same version of an application at the same time (Defelice, 2010). The cloud accounting has some main advantages which in follow talks about them in more detail.
Any time access: All data and information are available anytime and from anywhere, on any device as long as the internet connection would be accessible rather than, the
traditional way in which data was accessible only on a few on-premises computers. Which again, made the remote workplace for employees (Financial force, nd).
Real-time analysis: According to Ace cloud hosting (2018), cloud in accounting released the amount of unnecessary data. Therefore, accountants do not get mixed up by the information which is not relevant anymore. They also claim that since the data is not shared and updating via email as an attached file, the accountant will have more time to focus on significant main tasks and it could be very helpful during the accounting’s busy seasons such as the tax declaration period. The cloud makes the users able to edit the same files on the cloud, thus the other users have access to the updated financial information since the cloud automatically changes the information rather than the traditional software which users need to update the data manually. Therefore, the account balances are always accurate and less error takes place in it (Ace cloud, 2018).
File storage: According to Ace cloud (2018), accounting files are among the heaviest ones.
Therefore, as a business grows the demand and need of the data storing grows
simultaneously. Traditionally, the company needs to buy or upgrade the hardware to be able to fulfill the demand which is obviously an expensive solution. Based on the
accounting cloud, the company can choose to improve and expand the storage space and it is much cheaper than the traditional way. Cloud also makes a backup of the information automatically which keeps the accounting information safer.
According to Christauskas & Miseviciene (2012), small to medium-sized entities can take several advantages of implementing the cloud in their accounting function. Although, this implementation has its risks. The advantages based on this study are: “reduced costs”
which refers to reducing the expenses on hardware and in general in IT parts. The other benefit is “security”; the web-based systems are either better or have the same security as the traditional in-house based software.
The next benefit is “responding to business”; now, for example, it is easier and quicker for the companies to apply for more resources to store their data in the case of expanding their business. It is also easier to add new software if the company feels it needs new software.
Additionally “Easier administration” is another benefit of the cloud, which means all the users use the same version of the software and the only thing that they need to get access to the cloud is the internet connection itself. Moreover, they will have real-time financial reports. Also, all the users follow the same standard and rules which the authors called
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“compliance”. The last benefit and important benefit is the “global access” which means that users can have access to data whenever and wherever they are.
Simultaneously, there are some risks to use the cloud in accounting. According to Christauskas & Miseviciene (2012), the accountant needs to have access to data anytime and anywhere but since the cloud is dependent on the internet connection, and if the internet is down, it will make the problem for the accountant to reach the information directly. In addition, there is a risk of privacy and confidentiality. Moreover, since the cloud providers are the one who has control over the cloud area and every change on it, companies which are using the cloud technology are more dependent compare to before over the software applications.
1.7.3. Internet of Things in accounting
Another new trend is emerging which is called Internet of the Things (IoT). The internet is for sure one of the most important phenomena in technology development during the last century. The enormous amounts of information are on the internet which is updated by people and it is mostly about people. But the “new internet” is not only the connection to the people, but it is to connect the things as well (Chandi, 2017)
Now all the things or devices that are connected to the internet can share their data among the other internet-connected devices. According to Ashton (2009), IoT tries to reach objects’ interconnection and communication. On the word, IoT makes the new way of connection between people and devices also between industrial devices and private devices. IoT can be employed in all fields of society (Cao & Zhu, 2012).
From the business perspective, Atzori (2010) states that IoT has mostly influenced the business management and the intelligent transportation of the goods and people. IoT in recent years has played a significant role in business by added value to the entire business chain by changing the business processes, companies’ strategies and strengthen competencies independently of the company’s industry (Lee & Lee, 2015, p. 431). On the other hand, the IoT technology has had a significant effect on marketing and product development. By monitoring, transferring data from interconnected devices, and so on, consumer behavior can be observed in real-time (Golpayegani, 2018). Up to the present time, the product development conducted by the companies is based on a backward cycle.
This means that the companies develop a product based on previous experience and an assumption of how consumers react to the newly developed product (Golpayegani, 2018).
Herein, comes the advantage of IoT technology as the “connected products have the potential to provide data on actual use and essentially replace guesswork with hard facts”
(Saarikko et al, 2017).
The usage of IoT in accounting has started with the need for the connection between all parts of the business process to create efficiency for the financial accounting process (Cao
& Zhu, 2012, p. 741-72). Through the IoT data transfers and delivers to the other devices more safely and securely (Mishra et al., 2016, p. 1332). Inventory tracking is not an easy process, but by adopting the IoT and interconnecting the devices through IoT or use the tracking chips, one will know all the time that where the inventory or your manufacturer is. IoT makes the ability to predict whether the company needs more or less of a certain product, also, this ability can be used in the stock market so the person will know when to buy or sell a certain stock. Thus, IoT helps with real-time data as well (O’Leary, 2013, p.
61; Newman, 2018). The other advantage of IoT in accounting according to Newman (2018), is when the accounting department knows what would need to be fixed, hence
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they will have a wider idea and better prediction regarding how to allocate the budget. The consequent result in high productivity and therefore customer satisfaction.
Like any other technology, IoT also has its risks and disadvantages. According to the Information Systems Audit and Control Association (2015, p. 9), known as ISACA, new technology in the market normally results in a riskier situation. ISACA also claims that there is a risk of attack when the devices need to be connected to the internet. Therefore the main disadvantage and risk of using IoT is the security risk. Therefore, there is the main concentration on how to prevent the people from outside reach the data. Moreover, to be assured that the system is functioning well (Borgia, 2017, p. 22). Nevertheless, based on the ISAC report in 2014 the participants agreed that even if there are risks with the implementation of IoT, the benefits and advantages of IoT are equally or higher (ISACA, 2015, p. 7).
1.7.4. Blockchain in accounting
Blockchain is the other trend in the financial and accounting industry. While it is more known as a structure and fundamental of cryptocurrencies, the technology itself is usable for all different fields of industries. When bitcoin proposed for the first time in 2008, blockchain originally developed. The blockchain is a digitized ledger that records the transaction without involving any financial intermediate (Dai & Vasarhelyi, 2017, p. 5).
Blockchain contains the storage spaces in which data are recorded on and it is called
“block”. Each block works as a real-time general ledger. Each block stores the permanent information regarding the previous transaction, when the block is completed it will attach to the next block and gives it away. These blocks, therefore, have a strong connection together and have specific information about the previous block for the safety matter.
These blocks are joined together in a linked chain and that is why this technology called blockchain (Fanning & Centers, 2016). This system is decentralized therefore all parties engaged in a transaction, which called nods, have access to the blockchain, thus they can read, verify, update, and publish new transactions in the blocks. By blockchain technology, it would be clear if the payer has enough funds to complete the transaction or not.
Fanning and centers (2016) explain how the blockchain helps with the financial services with all of its advantages. First, they explain that there are no failures in any nod and even if there is any, the other nods continue their tasks and keep the performance on. Secondly, since almost all the documentation is digitized, it is easy to send it for several other applications. Third, all the participant has access on all the transactions on the blockchain, therefore it increases the audit ability and trust. To prevent the fraud the use of blockchain can be a good option since the changes on the blocks are highly difficult, therefore it might happen very seldom, and even if it happened all the parties can see such a change occurred. The other advantage of using blockchain in financial services is that two parties participated in a transaction can send or receive the invoice through the blockchain as well as being able to pay the invoice back through the blockchain system which makes the transaction process faster, paperless and also prevent of any missed invoices (Fanning &
Centers, 2016).
Implementation of this technology as the implementation of all new technologies has obstacles and disadvantages and negative effects. Alarcon & Ng (2018, p. 2) discuss that there are no sufficient tools to control and make certain that the system works as it promised which leads to the low reliability of the system. Yeoh (2017, p.199-200) argues
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that there is still a lack of standards in this field of technology such as bitcoin scandals.
Partida (2018, p.5-53) also argued about the obstacles. One obstacle could be the lack of expertise and skilled person who can manage the system and the other obstacle could be about the implementation and investing in this technology since it might be expensive to invest on therefore it would be costly for the company.
1.7.5. Big data in accounting
According to Rezaee &Wang (2017), big data have been used increasingly in the past decades among the financial and business industries. Big data determine as an enormous collection of data that is huge in size, therefore it is impossible to analyze it manually or with old traditional accounting software. Moreover, big data consists of structured and unstructured data which makes it difficult if we want to use the traditional accounting software to analyze them (Warren et al., 2015, p. 398). Big data breaks into four dimensions which are known as four V’s: volume, variety, velocity, and veracity. Each dimension stands for different statements. The volume stands for big amount of data, variety as great variation in data types; velocity stands for fast speed in data generation and veracity represent the trustworthiness of data (Syed et al, 2013, p. 2447).
Richins et al. (2017, p. 74), argue that by developing big data through the accounting function, the accounting entries would be automated, but still, the role of the accountant is significant and the accountant position will not vanish, instead, there will be a demand to hire accountants who are able to work and have knowledge of interpretation and manage the analysis of financial data. Accountants have already knowledge and a good understanding of the business, they used to work with data, hence they are still important in the accounting role.
Big data technology is not an exception when there is a talk about the disadvantages and risks besides its advantages. According to Payne (2014), the main disadvantages of big data for the companies are first, privacy issues, and second, cybersecurity problems which both can lead to the unethical usage of data. Besides, when big data increases in the use of accounting, the accounting profession needs more knowledge and skills to be able to adjust to technological changes. Griffin and Wright (2015, p. 379) argue that this accountant adjustment mostly needs to happen among the academics and educators, which so far have not proven specific curriculums for preparing the students for the new technological changes. The accountant, hereby, needs to know how to analyze and use databases and more precisely how to use big data analytics instruments.
1.7.6. Tools for visualization
Development of the technologies and the possibility to save and have access to an enormous amount of data, make the question of how reporters and decision-makers can organize this volume of data and make them understandable and reasonable. According to Dilla et al (2010), visualization of data in financial reporting increasingly common.
Companies use data visualization tools to make sense of the big amount of data stored in their information systems. For example tables, graphs, and other visual indicators that are suitable and common to use. Spence (2007) discussed that data visualization consists of three aspects: “interaction (i.e., acquisition of different “views” of data), selection (i.e., choosing which data to display), and representation (i.e., how data are depicted or portrayed)”. It helps the users of the data facility to restructure the data and increase the
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control over the data gathered. Moreover, users can take relevant and efficient information from the vast amount of information and then make the report and finally make the data more accurate. Accountants and decision-makers can compare the different visualization tools and choose the one which is the best for their given task (Dilla et al, 2010).
As discussed, the visualization tools have a significant role in representing data more simple, but visualization tools also have their limitations which can become a problem as the data grow. Manning (2015) introduced the top four limitations of visualization tools.
First of them, the data visualization does not prepare any explanation of the user, which takes time to look at data and then writes the explanation of the data which is not good for the fast-paced business. Second, different users based on different knowledge or different experience can get a different insight from the same data which if the conclusion made by the user is wrong can put the company in a highly risky situation. Third, usually there is not any guidance about the visualization tools, therefore it can lead the user to make a mistake and provide incorrect information, and it can be worse when the datasets are not simple any more being complex analysis or big data. Forth, sometimes data visualization tools provide a false sense of security for example, when we look at the table full of data, we might think that making a right decision and we fully understand the data, while we do not know the full story behind the data since there is not any sentences or phrases along them to make sure that users really understand the situation.
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2. Theoretical framework
This chapter will present the technology development to shows how technology is developed and accepted. Additionally, important theories regarding the topic are
presented. The theories in this chapter and empirical findings in chapter 2 will be used to help the analysis of the data gathered for this study.
2.1. Technology development
To understand how technology grows and how it is implemented, first we need to
understand the definition of technology. Technology development is based on innovation, which is defined as “an idea, practice, or object that is perceived as new by an individual or other unit of adoption” (Rogers, 2010, p.xviii). Innovation has two different categories, depending on its effect on the economy. The first category has an evolutionary role, which means that the innovation improves and continues the existing process and technology.
The second category is revolutionary, which means a radical change where new technologies or processes are implemented (Minakov et al., 2015, p. 307). Automated accounting is not a complete innovation, but it has a long time frame for full
implementation in accounting (Yu & Hang, 2010, p. 436-437).
It is, therefore necessary for the company to go along with the environmental changes and technological development and improvement. In other words, firms need to prepare themselves for these changes and make sure that they are ready to meet the future
demands of the society, industry, and clients since with growth in technology the level and type of demands will change as well. If the firm does not accept the changes and
progresses, it will become minor to the current environment and after a while will most probably fail and eliminated from the environment (Turner, 2004, p. 16).
Technological changes can interrupt the accounting function and at the same time evolve within the accounting profession. These changes may have a significant impact on accounting functions and it also proves the new argument that profession will become different in the future (Gould, 2017). Consequently, demand and the expected tasks of the accountant might change in the future. Therefore, there is a need to find out what
constitutes a profession.
2.2. Theory of professions
Technological changes and developments may continue to grow among the accounting profession and such changes may have a significant effect on the accounting function.
These changes have led to the discussion that the current professions will become different in the future. It would also affect the demands and expectations among the accountants (Gould, 2017). When we talk about the changes among the professions, therefore, it is necessary to know what constitutes a profession.
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The theory of profession focuses on the relationship between occupational groups, theoretical education, and possibilities for the profession to embed their theoretical knowledge among their occupational practice (Sundin & Hedman, 2005). Brante (2009) divided the theory of professions into eight categories. First, higher education is needed;
nevertheless, we need to keep in mind that education is not that important for some professions (Brante, 2009, p. 25-26). Second, abstract knowledge is needed. Although, the knowledge cannot be too abstract when the person as a profession needs to have a sufficient balance between the level of practical knowledge and the abstract knowledge.
Especially where one needs to increase and show the confidence and competence to the society and job market (Brante, 2009, p. 26). Third, there is some kind of uncertainty in society when it comes to demand from a profession. For example, some kinds of jobs are mechanical and physical jobs. Those easily can be taken over by other occupational groups, but on the other hand, there is some kind of jobs which need profession and expertise to perform it. Forth, is profession autonomy, which means that the profession is free to make its own decision independently (Brante, 2009, p. 27). Fifth, trust in the practitioner’s integrity is necessary. This trust can come from external elements such as the society or it can come from internal sources, such as co-workers (Brante, 2009, p. 27- 28). The sixth factor is a type of organizational structure that can be designed by either individual initiatives or by initiatives from governmental institutions. The seventh factor is interchangeability that happens when all practitioners need the same knowledge to do the same tasks within the area of competence. And finally, the last factor is knowledge conveyance, which means that the profession must be able to apply its knowledge and skills on tasks that society demands from it (Brante, 2009, p.28).
2.3. Firm characteristics theory
As discussed earlier, various firm characteristics might influence the use of digitalization.
Next, I will discuss how various firm characteristics influence the use of technology. I need to point out, in this thesis several firm characteristics have used.
Size
The size of the firm is the most important aspect of technology adoption. However, this assumption is controversial. Larger firms most likely are more financially able to buy and implement the new technologies compared to the smaller firms which might have a financial crisis or fewer budgets. Bigger firms are more likely to have more knowledge about the impact of technology compared to the smaller sized companies (Gibbs &
Kraemer, 2004). At the same time, it is more expensive and costly to implement and adjust the new technology within bigger firms while, the smaller companies might be quicker and more agile to perform changes since their organization structure would be more flexible (OECD, 2017). Giunta and Trivieri (2007) and Fabiani et al (2005) showed that larger firms are more willing to adopt new technologies. On the other hand, Love (2005) and Teo et al (1997) showed that the firm size has either no or less impact of adoptions.
Human capital
Another important characteristic variable is the degree of human capital within the firm.
The cognitive ability of the employees makes greater flexibility with the implementation
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of new technology as well as usage of the technology (Bartel & Lichtenberg, 1987). The firms, who hire more competent employees such as employees with a university degree, can use digital technologies more than the firms which have employees without academic training (Bresnahan et al, 2002).
The OECD discovered that the firms which adopt the cloud computing are the firms which have other complex Information and communications technology (ICT) and this
adaptation cannot be done unless the firm has a substantial human capital such as consumer resource management, financial accounting software, etc. (OECD, 2015)
Age
The age of a firm might have either a positive or a negative influence on new technology adoption. In a study by Dunne (1994), no significant relationship between the age of a firm and new technology adoption was found.
Thus, in this study, I will examine the role of some of the firm characteristics on the level of digitalization among the accounting functions according to the firm characteristics theory.
2.4. Disruptive innovation
Digitalization is a type of innovation and that is the reason that it brings change among the accounting industry. Digital accounting creates value for industry through the new
technologies, services, and techniques to satisfy the customers and bring new markets to rise (Southern Cross University, 2015).
Innovation can refer to the transformation process of an idea into a service or product.
Innovation creates value by being economically capable to produce while satisfying a need. According to Roger (2003), innovations try to increase or bring new value from resources in all processes of the business. There are two types of innovation. The
innovation is usually either evolutionary or revolutionary. Evolutionary innovation can be seen as a slight improvement in technology and processes while a revolutionary is
disruptive and new which also refers to disruptive innovation. The revolutionary innovation has the mission to satisfy a customer that has been hard to satisfy before (BusinessDictionary, 2016). Digitalization among the accounting industry seems to be more based on the new technologies which create more efficiency regarding solving the accounting problems and push the accounting companies to adapt to the new technologies and change services (Southern Cross University, 2015). Therefore, we can say
digitalization in accounting is a revolutionary innovation.
According to Christensen (1992), disruptive innovation leads the company to the new unexplored markets which make opportunities for high return because of being the first company through the industry in the new market. In other words, disruptive innovation is what shifts technology.
For companies that employ and offer a disruptive technology, there is usually a low gross margin and smaller target markets at the beginning which is not attractive for the
companies. As Christensen (2016a) discussed, usually in a niche customer segment where
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simplicity, comfort, handiness, and affordability are valued are the first costumers of disruptive technologies. Moreover the author (Christensen, 1992) argued, at the beginning of employing disruptive technologies it is hard to gain the bigger profit to the time of using traditional technology, but still it is crucial to invest in these technologies.
Otherwise, the competitors will do it and in a few years they will perform better compare to the rest of the market. Moreover, Christensen (2016b) indicates that disruptive
technologies are a positive force, they force to grow new technologies and services. He also mentioned (Christensen, 2016a) has a balance between sustainable and disruptive technologies come into the market is significant since they force each other to improve and even create the new technology and services which it is more acceptable for a current sustained market. That is why digitalization in accounting is a disruptive innovation and needs more consideration on it as technology shifts in the industry. Therefore in this study, I will examine if the firm characteristics have any role to push the company to more digitalize.
2.5. Organizational change
Digitalization is quite distinct from digital transformation. An organization might
undertake several digitalization projects but the digital transformation has a broader term and is not something that the organization can undertake as projects. Typically, the digital transformation begins with several digitalization projects (Bloomberg, 2018, p.5).
In reality, digital transformation has pressure on the organization to change their
technology, their system, their traditional way of working (Andersson et al., 2018). These changes facilitate ongoing digitalization initiatives (Bloomberg, 2018, p.5). Companies need to change and adapt themselves and their organization to become nimbler in order to survive and stay competitive in a dynamic and rapidly changing market and environment (EY, 2017). Most of the research considers if the management process changes within the business organization specifically if it examines the barriers which slow down the
progress it will affect the success of digitalization. As business becomes more digital it is important for the company to redesign. According to Quinn (2017), digital technology potentially is enabling to change the way people among the organizations work.
This topic is important so it seems many organizations tend to only change and mainly focus on technological elements and neglect the importance of the human element. The question comes to our mind that if only technological elements are important so why the organizational barriers are in the top of the list of digitalization challenges? The answer is that management and employees’ attitude should be involved in the changes as well (Keller & Aiken, 2008). To adapt to the environment changes and remain competitive, organizations need to be more influenceable and proactive to change. Therefore, any try to initiate the change involves significant challenges for the managers at all levels as well as the organization (McConnell, 2018). Manage organizational resistance and push the human capital perspective to change has a more significant role compare to managing the other elements of digitalization and digital transformation challenges which the latter one leads the organization toward a successful change. According to Westerman et al. (2012) the better the business manages the organizational obstacles to change, the more it will be effective in its digital transformation effort.
To successfully lead any organization and company through the changes, which in this study is digitalization among the accounting functions, it is crucial for the management to be able to balance the technology changes as well as the human capital changes. As mentioned earlier one of the biggest challenges of implementing new technology is the human resistance through the transformation journey since people experimenting with a change from the known task and situation to an unknown task and situation.
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Research on institutions had mostly divided into two different research fields. One of them is the rational agent model of institutional economics where the actions are based on individual cost-benefit preferences. The other field of institutional theory is based on social and cultural elements where individuals are agents of change who are affecting and affected by their surrounding environment (Pacheco et al. 2010).
Institutional theory has traditionally concern how organizations set up and organize their position and reach legitimacy to gain profit and sustain. This has been done by adjusting the rules, norms, and social structure of the institutional environment (Scott& Meyer, 1994, Scott 2007). The institutional environment is set up of institutions, a term that relates to authorization, social, and cultural elements that put pressure on the organizations to adjust to the environment around them. These elements describe what is the appropriate behavior and accordingly adjust pressures on the organization to not to act unacceptably (DiMaggio & Powell, 1983, 1991). Decades ago, Scott (2007) identified the pressure of the institutional environment and organized them into three regulative, normative, and cognitive pillars. In addition, DiMaggio and Powell define their work as a process of isomorphism. According to DiMaggio and Powell (1983), institutional isomorphism happens in three different mechanisms, coercive, mimetic, and normative isomorphism.
The regulative pillar leads the organization’s manner by governmental law, industry agreements, and standards. In other words, the regulative pillar is based on rules and laws (Scott, 2013). This pillar strongly relies on neoclassical components and assumptions and belongs to the economic/political category of institutional theory (Bruton et al., 2010).
The normative pillar describes what is expected and suitable for organizations in different situations and consequently guides the organization to communicate and interact with other actors. The second pillar has more concern about the norms and values and authorizes the softer rules which are more fit in with the organization.
The third pillar, cognitive pillar, derived from social behavior at a more specific level such as language or cultural differences. This pillar is important since it concerns on cognitive and social elements. These pillars may be simulated and interact with each other depends on the specific institutional environment (Bruton et. al, 2010; Scott, 2007). These pillars are significant to implement correctly since if the organization fails to understand any of them, the organization facing the risk of losing the legitimacy (Kostova & Zaheer 1999).
According to DiMaggio and Powell (1983), coercive isomorphism arises from political influences and legitimacy problems also it arises from different pressures of other organizations as well as the cultural beliefs of the society they are in. This kind of
pressure, sometimes getting the force and law shapes and organization directly affected by them. For example, the legal and technical requirement such as budget and annual reports.
Moreover, mimetic isomorphism leads the organization to imitate. When there are unclear goals and uncertainty in the instructional environment, each organization can become a model for the other organization. As a result of this isomorphism, organizations try to make themselves more similar to the other organization and therefore become more successful and legitimate (DiMaggio & Powell, 1983).
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The third mechanism of isomorphism according to DiMaggio and Powell (1983) is a normative isomorphism. Based on the normative isomorphism all members of the profession, specialists, can define the condition and method of work together.
Additionally, they can contribute to the legitimacy of the organization. Universities
mainly provide the cognitive-based legitimacy and knowledge, and then the second step is to expand the professionals and therefore disseminate the knowledge regarding developing the organizational norm.
2.7. Definition of hypotheses
In line with the theories mentioned above, this study aims to examine the influence of firm characteristics and the level of digitalization in the accounting function, also find out the relation between the level of digitalization in accounting function and the need for skills among the employees of an accounting function. According to Gray (2017), it is necessary to set the hypotheses in quantitative studies to investigate the relationship between
variables. According to these theories, it is important for the firms to keep themselves up- to-date with the new technology, which causes the need for professional and skilled employees. In addition, theories and research show that a couple of firm characteristics elements such as firm size, age, business strategy, etc. (see Chapter 4) have an impact on the level of digitalization in the firm. Therefore, it leads me to believe that this is what I aim to examine with my hypothesis.
Moreover Gray (2017, p. 144), discusses that the operationalization of hypotheses is “A concise statement that assigns meaning to a constructor variable by specifying the activities necessary to measure it”. The operationalization shows what needs to be
measured which means to determine the key variables which will be measured later in this study to examine the hypothesis. Accordingly, this study will use two key variables to test the hypothesis. These variables are firm characteristics and the need for skills as
independent variables on one hand and level of digitalization in accounting function as a dependent variable on the other hand. Moreover, this study will use 14 sub-variables to measure the level of digitalization in accounting function (see Chapter 4)
Therefore, this thesis tests two groups of hypotheses. The first hypotheses group
regarding the relationship between the firm characteristics and the level of digitalization in the accounting function. The second hypotheses group concerning the level of
digitalization in accounting function and the need for skills.
First hypotheses group: Firm characteristics and level of digitalization in the accounting function
Null hypotheses (H0): The firm characteristic variable has not any statistically significant effect on the level of digitalization in the accounting function
Alternative hypotheses (H1): The firm characteristic variable has either a positively or negatively significant effect on the level of digitalization in the accounting function.
The second group of hypotheses: The level of digitalization in accounting function and need for skills
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Null hypotheses (H0a): The need for skills has not any statistically significant effect on the level of digitalization in the accounting function
Alternative hypotheses (H1a): The need for skills has a statistically significant effect on the level of digitalization in the accounting function
I need to mention that the firm characteristics variables in this study as independent variable is included in Business strategy, Future, Threat, Expertise, Age, Size, Leverage, ROA and Outsource accounting, which they will introduce, and defined in detail in Chapter 4. In addition, needs for skills, as another independent variable is included in University, Learning, Adapting, Teaching, Training, and Expertise, which also will be explain in detail in Chapter 4.
