Question

The improvements in computer technology has affected how accountants do their jobs. Thirty years ago an accountant might take 3-4 hours to prepare an individual’s tax returns or a few days to work on a firm’s taxes. With improved computing technology, the time for both activities is much less than before. The use of computers has also reduced the amount of time required to look up information necessary to work on taxes (both for individuals and for firms). What impact have the improvement in computers had on the isoquants of tax firms that work on both individual and corporate taxes? You may assume that capital and labor are on the two axes used to construct the isoquants.

Answer 1

In recent year computers has changed the way accounting was done. Earlier the tax work was done manually after the books has been made. But now with the evolution of technology the tax work has been changed and the efforts required to make tax returns has been decreased as the work has been done by the computer systems.

This has been possible because of the below computer evolutions

• Accounting software’s.
• Integration of tax system with bookkeeping
• Filling of tax reports from the accounting system.
• Recording of tax reports entries from the software automatically.