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July 1990

The incredible usefulness of laptops. (laptop computers) (includes related articles on audit tool programs and partner commitment to audit projects, and an example of an out-of-town audit)

by Arkin, Howard I.

    Abstract- Lightweight laptop computers provide accounting professionals with the means to increase their productivity, improve their accuracy, and enhance their client relations. The laptops enable accountants to bring their computers to the work site and perform their duties while their clients watch, making billing easier to justify. Professionals working in the field away from office distractions perform more efficiently and receive more satisfaction. Applications software packages that are available for laptops assist in tasks that include preparing financial statements, completing analytical reviews, and employing a standard set of work papers.

Then the mid-1980s witnessed the birth of the personal computer, a blessing for CPAs. Suddenly, there were computers, afFordable to most firms, that allowed the accountant to enter a preliminary trial balance and post transactions and adjusting journal entries. From this input, all types of analyses were generated. There was so much excitement that even the simplest and smallest jobs were put on the computer. But even with the excitement, there was still one problem. To make use of this incredible tool, the CPA had to do all the inputting in the office, causing massive delays, making managers and partners wonder if using the computer for field work was really worth the trouble. Only on the biggest jobs for both medium-and large-sized firms, was it feasible to bring a PC to the client's office. Despite the willingness of firms of all sizes to purchase desktop computers, and the additional flexibility of these new machines, they were of little more help with the field work than the mini-computers of the late 1970s and early 1980s.


Enter the late 1980s and the portable computer. All of a sudden CPAs were given all the flexibility, of the free-standing, desktop computer, without bringing work to the computer-they were able to bring the computer to the work. it was as if the portable computer were made especially for CPAS. But at first the portable computer wasn't very portable. Compaq's 40-pound, dual-floppy-drive, MS DOS-compatible machine was among the computer industry's first portable computers. The only people who found these machines to be portable were those who spent most of their free time in the gym or enjoyed lifting up the back ends of cars for a laugh. Perseverance, however, was the conqueror. A few years later, smaller, lighter, and more powerful machines were introduced. Names like Zenith, Toshiba, Ericson, and IBM entered the portable market. Competition forced producers of laptops to become more responsive to user needs. Now these machines are not just portables; they are laptops. Instead of the 40-pound, slow clunker, the newer, slimmer machines weigh only four to 15 pounds and are as fast as most desktop models. Many of these machines come with 20 megabyte hard drives and at least 640K of RAM (Random Access Memory), at a cost of under $2,500. The new players in the seller's ballgame include Sharp, NEC, and Grid. Now, not only are the Big Six going to clients with an audit bag in one hand and a laptop computer slung over a shoulder, but, also, sole practitioners and medium-sized firms are now able to take advantage of the laptop.



In reviewing laptops, we start with their portability. Now it is practical to perform nearly all the work for the client right before his or her eyes. This alone benefits firms in ways that are not directly measurable in hours saved. Too many times, clients argue that the bill is too high because they don't recognize the extent or nature of the work done away from their offices. The billing is more easily justified by having the accountant use a laptop on the client's premises.

Human Resources

Laptops should also be viewed from the perspective of staff efficiency and satisfaction. Now that staff does much computer work in the field, they are less likely to be pulled off the job, "just to do this one-hour project." During the busy season, when a quick job has to be completed in the office, a partner or manager has been known to pull someone from what seems to be less than an urgent job, such as keying entries into a computer. Such interruptions have a ripple effect and lead to inefficiencies and untold frustrations. Further, in the field most people are able to concentrate more completely on the task at hand. Phone calls, visits from other staff, and other distractions are not present at the client's office. Again, better for the client and the firm.

Staff feel a strong sense of accomplishment and satisfaction in being able to finish what they have started with a minimum of interruptions. How often does a job come into the office, partially completed, and because of other commitments and interruptions, the person who began it is unable to finish it? The manager scrambles to get someone else to wrap it up, or does it him- or herself. it's a lose-lose situation.


Financial Statements. As mentioned, computers can perform much of the tedious work required of the accountant, faster and more accurately. There are currently several excellent software packages designed to assist with such work. These packages give the accountants the ability to key in an unadjusted trial balance, make journal entries, and have a tailored financial statement and tax return run on site. The key is that now the computer takes into account that each client and its financial statements are dynamic. Previously, with minicomputers, it was difficult, if not impossible to adjust financial statements for the little idiosyncrasies of each client. But new systems Wave such flexible reporting that it is nearly effortless to print the financials in a manner that gives the most meaningful information.

These systems are not limited to printing a trial balance, financial statements, and tax returns. They will give quite a bit more, such as control of statistical testing, tracking of confirmations, producing workpapers for specific account analyses, generating defined ratio analysis, and performing multiple level analytical review. Questions or discrepancies in the figures can be immediately checked to the books of original entry or other supporting documentation. The computer availability allows the CPA to focus immediately on a problem. As soon as a CPA enters the field, the laptop can be used to determine the sample size of confirmations to be sent out, keep track of which ones have been returned, and prepare second requests to be sent. And with a few quick entries, the whole process is summarized and evaluated.

Analytical Reviews and Other Work. Once the unadjusted trial balance has been entered, the laptop can assist with initial analytical review, showing the CPA which accounts seem to be statistically out of sync. Because the laptop is in tile field, the auditor can rerun an analytical review any time, immediately seeing the effects of current journal entries.

Once all journal entries are posted, the accountant can use a ratio analysis tailored to the client's needs. The advantage of working with these ratios at the client's office is obvious.

Finally, such programs will generate workpapers for selected accounts. This means that any time a journal entry is made, the workpaper will be updated to reflect the current account balance. By using the laptop, a workpaper can be generated and placed in the working files in the field. The papers are complete and ready to be reviewed where then, should be, right on the client's premises.

Work Papers and Audit Programs. With the onslaught of peer and quality review, standardization of workpapers is becoming more important. By using a laptop, clients will have the same or a standard set of workpapers, and yet they will be tailored to the unique circumstances of the industry and the client's control structure. The standardized approach will facilitate compliance with the firm's system of quality control. It is no longer acceptable to go to the file room where all the programs are stored, pull one out, and start checking off. With the laptop, if the client does not deal in inventory, the section is excluded from the program. Software companies have been quick to respond with packages that make tailoring programs easy. These programs also have checklists for review of audit work for conformity with GAAS and for review of financial statements for conformity with GAAP. A firm must decide as part of its quality control system which of the available checklists are to be used for each engagement. A CPA has the ability to add and delete items from a program or checklist as permitted by firm policy and as circumstances dictate, right on the client's premises.

These programs can also standardize printed reports. in other words, a firm can select which reports need to be printed before the client's workpapers are reviewed. We call these reports "the final package. "

And, much as we would like to, we can't forget SAS 55, "Consideration of the Internal Control Structure in a Financial Audit. " The latest software available for use by laptops builds in the requirements to satisfy SAS 55. As a matter of fact, using the right software can be the easiest way for a firm to comply with SAS 55.

Accounting Work Laptops are not just for firms that handle audits. There are currently hundreds of general ledger/ write-up programs to handle the work of even the most specialized of organizations. instead of having clients mail check stubs and cash receipt information to the office and scrambling to find an assistant to either analyze the information manually or input the information to a desktop PC, a firm can now assign a CPA to go to the client's office and input the required information, either directly from journals prepared by the staff, be way of a one-write system, or directly from check stubs. it need not be a professional that goes to the field with a laptop. A paraprofessional can also use the laptop at the client's premises, freeing up the CPA to handle more challenging work. Once the information is keyed into the computer by the paraprofessional, the CPA can later analyze the general ledger and make needed adjustments.

A program that helps both the accountant and the client is a fixed- asset database program. A fixed asset program, when loaded into a laptop, starts when the CPA enters all fixed asset additions and results in providing the client with an updated listing of all assets. The program also generates the current year's depreciation journal entry and a workpaper for the accountant's files.

Taxes and Loans. If a CPA is using a laptop in the field, after tile financial statement work is completed, additional data required to prepare a tax return can be keyed in and processed. Again, any questions or problems the preparer has can be handled and resolved right on the spot. The person dealing with the client resolves the tax questions at the most opportune moment. The goal of using a laptop is to have a finished product, financial statements and tax return, when the CPA leaves the client's office.

When it comes to tax planning, it may be beneficial to do the "what ifs" on the client's premises. Using a tax projection package, CPAs can show clients multiple scenarios, helping them plan for the future. Some projection systems allow the accountant to use either multiple years or multiple scenarios for future planning.

There are also several excellent loan amortization programs currently available. often a client would like to see how much it would impact operations to borrow a specific amount, what the cash flow requirements of various loan options are, or benefits of paying a note early. These packages give the accountant the ability, to supply the client with several choices and pictures.

Sampling. A program that directly impacts audit efficiency is audit sampling software. Programs now allow an accountant to link a laptop, or any type of PC, into a client's computer and pull out audit samples. In addition, these programs will perform mathematical or other reasonableness tests on tile sample items. These packages cut the time required to select a sample, assure that the objectives of the sampling plan are met, and perform tests for mathematical accuracy.

Databases. Many firms are not satisfied with the programs currently being offered by software developers. Then, feel the need to develop their own specifications to achieve certain objectives. Because of this, firms are using database systems and writing their own programs. Like other systems, the databases can be run at the client's site using a laptop. There is no one application that stands out when using a database, because the applications are truly endless. A few examples include: a time sheet generating package; an audit confirmation control system; and a workpaper control listing.

Spreadsheets. what article on PCs would be complete if it did not talk about the father of MS DOS programs, the spreadsheet? when any article talks about having flexibility, in reporting, number crunching capabilities, or ability to manipulate data, the first program that comes to mind is the spreadsheet. When considering some applications of the spreadsheet program, the simplest must be the programming of a 13- column workpaper. These workpapers can now be put on a spreadsheet and handled faster and more accurately than writing them manually and any change to the workpaper is automatically recalculated.

Spreadsheet software is at its best when it comes to any type of projection. From the simplest cash flow projection to a complicated divisional sales or accounts receivable/payable loan balance projection, the client and the CPA using a laptop can together view multiple scenarios and arrive at a projection just right for the client's needs. These projections are not limited to one industry or one type of analysis. There are no boundaries or parameters that hold back the user. The only limitation is the imagination of the CPA. The clear advantage to using a laptop at the client's office is the availability of client personnel and documents and the client's first hand observations of the process that is going on.

The limitless flexibility of spreadsheet programs, even for the most complex financial statements (i.e., multi-divisional companies which allocate expenses based on formulas), takes the trouble out of preparing and recording changes and makes preparation of these financials practically effortless.

Some clients do not require formal financial statements and simply need the accountant to consolidate their companies for tax purposes. Again, a spreadsheet program can easily be written for this specific purpose.


After the first year of a computer's use in processing the client's records, both the current year's work and prior years' work become available on the same disk. As a matter of fact, one 3 1/2-inch disk has the capacity to store as many as five years of history. Before the PC and its friendly laptop, CPAs had to lug around prior year analyses to see exactly what had been done in the past. Now that information can be stored on one diskette. With this newfound resource, the CPA can store multiple years on one disk and an unlimited amount of data-account balances, statistical samples, loan schedules, fixed asset schedules, audit programs-on additional diskettes.

When using a laptop, CPAs can get many times the information at the client's office in a fraction of the space. In some instances, it is like bringing the entire file room to the client's office.

The ability to store this much data on one disk also makes in-house control of workpapers easier. Instead of having to access the physical workpapers, the first step can now be to access the disks kept in-house. In-house management of disks is much easier to organize and control than actual workpapers.


As mentioned, the laptop computer has gone through its own evolution. Even while the cost of these machines is coming down, the units themselves are getting smaller, lighter and more powerful. But is the investment really worth it? Not every client needs all the capabilities that a computer offers, especially a laptop. But the goals of all firms are to give clients the highest level of service while saving time in doing the work. In looking at the applications, it is safe to say that there are programs available for all facets of the accounting process. In deciding whether to use a laptop on a specific job, a firm should anticipate saving 10% to 15% of prior years' time to make it beneficial. In other words, if using a laptop turns a 14-day job into a 10-to 11-day job, the computer has done its job. It has freed up the CPAs to get on to other work sooner and given the client a finished product faster and more accurately than ever before, and the equipment is available to use on the next client with the same results. All these advantages can be obtained for an initial investment of $1,500 to $4,500. Using our example, assuming the staff member is billed at $65 an hour and works an eight-hour day, the time saved on this one job has a billing value of $2,080. Averaging this, it obviously does not take a firm many working days to recover the cost of the computer.

It has been my experience that the use of laptops in the field saves, on average, about 15% of the time on a job. This is not to say that all jobs will result in such savings. The largest savings I experienced was accomplished by using a spreadsheet program. The job originally required a staff of four working 30 days. By using a laptop and a spreadsheet program in the field, the client was given a completed product at an earlier date while saving the four staff five full days. To get a true idea of the time savings, the programming and support time must be added to the first year's time; but the savings will occur every time this assignment is undertaken. In this case, the first-year savings were about $15,000 (this is no fish tale). Included in the first year's savings was the extra time taken in learning the new system (the learning curve).

Another way firms recoup their investment in computers is to bill computer time to the client. Some firms charge an hourly rate for the use of a computer on site. With this charge, the firm's investment is quickly recovered, and expenditures for new laptops do not seem to be so formidable.


When an accountant comes to a client with a laptop for the first time, the client is usually amazed. Here is the CPA that was handling his or her books for years with 13-column paper, now on the leading edge of technology. For some clients it is the first time they see the CPA not just as a "number cruncher," but as a business advisor. In one case, a client was so impressed that it led to other services, including help in installing a new automated accounting system and assistance in general business consulting areas.

It is important to educate clients to think of their accounting firm as more than a bunch of auditors. As in other industries, accountants must stay on top of technological changes. By using a laptop, the CPA is seen in a new light. The CPA is seen as keeping his or her fingers on the pulse of advancing technology, and looking for better ways to serve clients, while finding more efficient ways for the clients to conduct their businesses.


It seems that every day there is a new manufacturer producing a smaller and lighter laptop. The latest technology is the notebook," weighing only 4 pounds with a 40-megabyte hard drive and running an 80286 chip with a four-hour battery. This new kid on the block makes the big audit bag obsolete. These computers fit in the thinnest briefcases and are almost as powerful as the desktop computers in the office. The future looks bright for firms that want all their CPAs to take a computer to every client, limited only by the accountant's knowledge of the computer and the firm's commitment to automation. With a minimal hardware investment and without sacrificing speed or power, the laptop provides the CPA in the field with the limitless power of today's computer technology.


The accounting industry has been using computers to help process data for over 15 years. Now most firms, no matter their size or the amount of billings, are able to make full use of the personal computer, More and more applications are being written to assist CPAS in all facets of their profession. Because most of these applications require information from the client, the use of laptop computers is a natural. The benefits of using a laptop at the client's office are not limited to the applications available for PCs. Having a complete set of workpapers brought back from a job and having the staff work at the client's office uninterrupted, are just a few of the benefits. The icing on the cake is that by doing most work in the client's office, the client sees the CPA at work, making it easier to justify fees, increasing productivity and improving client relations-truly a winning proposition for everyone.


The implementation of the "audit tool" software does not happen overnight. The process of training the auditors, getting everyone to print out o standard package to put into the workpapers, and formatting the financial statements is a slow and, to be effective, organized process. One of the most important elements that mode the automation of the author's clients' data easier, was the partners' commitment to the project. The firm as a whole sow the advantages of working with the audit package, and understood the required investment in both time and money. Now the entire firm, not just the partners, are benefiting from the program. Jobs are running faster, staff morale is higher.


One of the author's out of town audits involved four staff members. The staff went to a distant city two weeks each year to gather accounting information for financial statements and tax returns and do the financial audit. Until 1988, a trunk would be loaded with prior year workpapers and sent to the client's office in advance. When work was completed, (on the 14th day), the four staff made their way back to home base, returning with preliminary numbers and awaiting the posting of the trial balances, the consolidation of some 30 entities and the final report combinations.

In 1988, the partner on the job asked if there was any program that could assist in posting and combining these companies. After a three hour meeting, all that was left to do was the programming. In about 11 days, a rough program using an electronic spreadsheet was developed to allow the accountants to enter unadjusted trial balances and the adjusting journal entries. From this input and the information derived from the meeting, a program was prepared to print an adjusted trial balance, by company, and combine all the trial balances into a consolidated total.

But that was not all. The program then combined all companies on a tax basis, printing out a report used to generate tax input sheets. With all the problems and additional information desired, adding all the macros, exceeding the computer's available memory, changing the format of the reports, etc.), an additional five days of programming time was required. In total, the programming took 16 days, but when the staff returned from the 1988 audit, instead of the usual two weeks' work for all the staff, there was only one additional week's work. In the second year, the time back in the office was reduced to four days. This is just one of many substantial time savings a laptop in the hands of a computer trained CPA can achieve.












The efficient audit using a laptop is driven by the audit tool" software. The process begins with the least experienced staff member on the job entering the client's year-end unadjusted trial balance. The manager gets the first run of the current year balances compared with the prior year, and reviews the audit strategy. When the CPAs go to the client's office to begin the field work, they have a disk with prior year information, including a current year's unadjusted trial balance. With a laptop, the CPAs make all necessary adjusting entries on the job, get printouts of the analytical review, final trial balances, workpapers, and draft copies of the financials.

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