In defense of double entry accounting.

Some have asserted that with the advent of computerized information systems, double entry accounting as we know it is no longer relevant - the concept of debits and credits is archaic and is used by few computerized accounting systems.

In recent years information technology has had a significant impact on the practice of accounting. Computers have replaced paper, pencils and ten-key adding machines as the primary means of recording, classifying, analyzing and presenting financial information. This change has freed the accountant from performing many mundane record-keeping activities and has enabled him to devote more of his energies toward assisting management in identifying opportunities and resolving problems. Information technology has extended the accountant's capabilities in providing relevant and reliable information to both internal and external users on a timely basis. As a consequence, the role of the accountant has evolved from a spectator to an active player in the management process.

Accounting is structured to reflect the dual nature of business transactions. The two sides of every transaction, whether it is a sacrifice and reward, effort and benefit, or source and use must be in balance. The concept of double entry accounting has withstood the test of time. Fra Luca Pacioli, a Venetian monk, first described double entry accounting in 1494. Since then, there has been infinite changes affecting economic activity, however the universal nature of the double entry accounting has proven useful in organizing and understanding events and transactions for virtually all types of business organizations. In fact, Goethe, the German poet has described double entry accounting as "one of the finest discoveries of the human intellect."

Some have asserted the with the advent of computerized information systems, double entry accounting as we know it is no longer relevant. They argue that the concept of debits and credits is archaic and is used by few computerized accounting systems. It is contended that debits and credits were necessary to manually record transactions and provide control over the process. However, computerized accounting systems automatically and accurately process transactions with minimal human intervention.

Furthermore, Rick Elam of the AICPA has stated that "Traditional double-entry bookkeeping is becoming the Latin of business school - interesting to study and useful from a historical perspective, but not in demand in everyday practice." He argues that accounting education is behind the time and is wasting valuable time and effort teaching debits and credits that should be used by students in learning information technology.