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Nov 1993

Multimedia: a new technology for the CPA. (includes related article)

by Miller, Jeffrey R.

    Abstract- Multimedia technology is expected to considerably change the day-to-day activities of accountants. An inevitable outcome of the personal computer revolution, multimedia facilitates the intermingling of information stored in text, audio, graphics, animation and video. The advancement of the technology was sped up by the invention of the compact disk-read only memory, a multimedia device that allows for the storage of large quantities of data. Already, multimedia technology is being used in such accounting functions as research, inventories, business presentations and professional training. Owing to its convenience, less travel time required, decreasing application cost and easy administration, the technology is expected to further gain inroads in the world of accountancy.

Multimedia can be used in both marketing and CPE. Here is what it is, its advantages, and how it can be used--preparing the CPA for its soon- to-be pervasive use.

During the past decade, the personal computer (PC) has revolutionized the way accountants carry on their daily activities, from the most simple to complex tasks they undertake. Multimedia is expected to have a similar, if not greater, impact during the next decade. This assessment has been made by computer industry leaders such as John Sculley of Apple and Bill Gates of Microsoft.

Multimedia was a natural outgrowth of the personal computer revolution that has had such a profound impact on the accounting profession. Since its introduction, the PC has provided powerful data-crunching and word- processing capabilities for businesses and individuals, and consequently, has dramatically changed the manner information is processed and the way people work. During the '80s and continuing in the '90s, numerous companies have installed or are installing networking systems to facilitate information-sharing. Electronic information is being transferred from one storage medium to another. However, until recently, some types of information could not be stored or retrieved electronically (via computer), such as audio or video images. Technologies have now been developed to integrate text, audio, graphics, data-crunching, animation, and video; thus, the PC has become a multimedia device.

Multimedia Terms and Concepts

Because multimedia technology is still in its infancy, a consensus has not been reached on a precise definition. Multimedia is the mixing and mingling of all types of information--numbers, text, graphics, audio, video, animation, and images.

Reaping the benefits of information technology requires converting information to and from different media. A multimedia PC requires special hardware and software to handle data communication between different devices. For example, a few seconds of high-quality images may require many megabytes of storage. Consequently, several companies have been investigating the technology required to make data storage more efficient. These companies include Apple, Commodore, Fujitsu, IBM, Intel, Microsoft, NEXT, Philips, and Sony. Intel, for example, has made great strides in this area working on a technology called Digital Video Interactive (DVI). DVI attempts to solve the problem of compressing huge data storage into a form that even ordinary PCs can handle. Compressed data is stored on hard disks or optical disks. A pair of special Intel microchips is used to retrieve the data. The main purpose of DVI is to translate the video data into digital data of a manageable size.

The invention of the compact disk-read-only memory (CD-ROM) has made many multimedia applications cost effective. CD-ROMs are relatively inexpensive and have the capacity to store vast amounts of information. One disk, for example, may hold over 600 megabytes of information, which offers substantially greater storage capacity than the typical hard disk found on PCs. A CD-ROM drive may be purchased for as little $300. Because of its low cost, speed, and capacity to store vast amounts of information, the CD-ROM is a leading multimedia device.

Besides CD-ROM, videodisc and videotape are used to store information for multimedia applications. Both multimedia devices utilize full-motion video. Because videodisc is a random access device, it permits retrieval of selected information much faster than videotape.

Philips, a laser-disc pioneer, and Sony have been working on a system called Compact Disc-Interactive (CD-I). Unlike the systems noted above, CD-I does not need a computer because the CD-I device can be connected to a television. The CD-I player is an advanced version of the CD player which revolutionized the music industry. The CDI-910 player developed by Philips and Sony costs about $600. Philips has also developed a CD recorder/player which costs around $8,500.

The Cost of Using Multimedia

Getting your computer ready to use a multimedia application can be relatively inexpensive. The basic requirements are a 386SX computer, 4MB of RAM, a 80MB hard disk, a color monitor, a sound board, speakers, and at least one type of multimedia device, such as a CD-ROM drive. Many PCs used by CPAs already have the hardware noted above, except perhaps a CD- ROM, sound card, and speakers. To obtain these additional items, the cost may be well under $1,000, depending upon the quality of the products and the ease of installation. If other multimedia devices are required, such as videodisc, then extra costs are involved.

Developing a multimedia software package costs more than getting a system ready for multimedia applications. The fundamental goal of multimedia is to allow users to retrieve the information they need in whatever medium required by the job--audio, text, graphics, video, or even animation. Consequently, special equipment is needed to produce these effects. In addition to the basic hardware, the multimedia developer may need a specialized videocassette recorder and videodisc player, depending on TABULAR DATA OMITTED the sophistication of the application.

A course for first-year audit staff is an ideal candidate for multimedia. For example, the proper methods for taking inventory could be presented in such a course. A videotape could be made of an actual inventory count, and the PC could initiate play on the VCR at the proper time in the course. To incorporate this video in the training course, a special type of videocassette recorder is necessary. This type of recorder looks similar to an ordinary VCR, but it is more sophisticated and rugged. The video can also be stored on disc (e.g., CD-ROM) with the aid of special software and equipment. Thus, the entire training program could be stored on CD-ROM. Special programming software needed to construct a CPE course using all multimedia capabilities can cost up to $8,000.

Once a training video has been produced, however, it is inexpensive to duplicate. In many cases, the cost of duplication would be substantially less than the price of a textbook, and one copy may be used repeatedly. In addition, if part of the CPE course becomes outdated because of changes in the tax law or in an accounting pronouncement, the course can be easily edited and updated.

Manufacturers already produce machines that are equipped to handle multimedia applications. Table 1 compares five major manufacturers of such machines.

Current and Potential Multimedia Applications

Multimedia devices are already being used to provide information accountants need. For example, Commerce Clearing House, Inc. (CCH) offers its Standard Federal Tax Reporter on two CD-ROM disks. One disk contains the income tax laws by code section, and the other contains a history of the IRC and the CCH Citator. A complete Federal tax service on seven CD-ROM discs coupled with on-line access via modem is also available. Thus, tax accountants can make effective use of a CD-ROM drive for traditional tax research, as well as other possible multimedia applications.

The AICPA currently offers its popular computer database, the National Automated Accounting Research System (NAARS), on CD-ROM. This database includes searchable full text of financial statements, related notes, and auditor's reports of over 4,000 U.S. companies. CD-NAARs is a subscription service with quarterly updates. Orders can be placed through the AICPA Order Department (800-862-4272).

American businesses use CD-ROM for purposes other than research. Eastman Kodak, for example, has found that recording monthly inventory data on CD-ROMs saves the company over $750,000 annually. Travel agents use CD- ROMs as a promotional tool. When a customer comes into their office, they can show them a picture of the hotel, a map of the city, and locate a restaurant using the CD-ROM.

In the United Kingdom, the government's training agency recognized small businesses' need for training to improve operating methods. An agency funded a program to offer 25 multimedia modules covering the key problem areas that affect small businesses. Each package was priced around $200 and included a videocassette, audio cassette, and a workbook.

Use of Multimedia in Professional Presentations

A CPA is often called upon to give presentations to clients, to civic and charitable organizations, and to various other groups. Such presentations are important for they may provide helpful information to the audience, aid the CPA in personal development, and demonstrate the skills and talent of the CPA to those that might have a need for his or her services. Proper use of multimedia may greatly enhance the effectiveness of such presentations. Many software packages are on the market today, which give valuable assistance in making convincing presentations. Such programs help the presenter organize the presentation, create charts and drawings, and utilize other special effects. All of these presentation packages, such as Harvard Graphics, Freelance Graphics, Persuasion, PowerPoint, and Charisma, cost less than $600.

Multimedia will strengthen presentations by incorporating sound, video, and animation. All the data to drive the presentation can be stored on a computer disk. To give a presentation using multimedia, the speaker will need a computer, an overhead projector, and an ovation (which connects the computer with the overhead). Laser pointers also may be used to control the use of multimedia up to 25 feet from the screen. When certain slides, videos, and animation are to be used during the presentation, the speaker uses the laser pointer and points and clicks at an appropriate place on the screen to activate the item at the desired time. Presentation packages are currently being developed to take advantage of multimedia capabilities, and they will be on the market soon. In fact, both Harvard Graphics and PowerPoint presentation packages already have the ability to use certain multimedia effects (e.g., sound).

Multimedia and Professional Training

The amount of time many CPA firms devote to the education of their employees provides a glimpse of the CPE's importance. For example, the first-year staff of some firms spend up to 80 hours on CPE. Much of this training for the largest firms takes place at professional education development centers. To help reduce costs, at least one firm is using multimedia technology to develop Expert Access System (EAS). EAS uses a multimedia platform to provide an experience similar to a live-training session. A central training facility is not needed as employees may stay in their own offices or even at home and receive the same high-quality training as if they attended class at the development center, saving much time and expense.

At Ernst & Young, Robert H. Dean of the Cleveland office helped develop a multimedia approach called "Desktop Learning" (DTL). He said, "DTL demonstrates how multimedia enhances the learning process for certain types of technical subject matter." Steve Davis, director of technical training in Canada, indicates that for one audit course, training takes "65% less time, yields a 15% increase in learning as well as a 25% increase in consistency, which means more of the students are learning what we want them to learn."

Other companies have also effectively used multimedia training, resulting in increased learning performance and productivity by their employees. For example, DuPont used a computer-controlled video system to train truck drivers. The American Heart Association designed interactive lessons on how to measure blood cholesterol levels. GTE North used computers to teach workers how to fix telephone cables and found audiovisual computer programs can provide a deeper understanding than lectures or books. Multimedia is expected to have a profound impact on training and continuing education in many fields of work. Some of the important educational benefits of using multimedia for CPE are summarized below.

Focuses on student needs. The instruction is tailor-made to the student's needs. If the student needs further explanation, the student may use "hot buttons," to retrieve more information about a term or concept. In an ideal situation, multimedia will also allow the student to focus on the method of learning (audio, text, graphics, video, and/or animation) that is best for him or her.

Improved learning. Studies have indicated that students learn faster, improve their comprehension, and retain more when multimedia is used.

Expertise. A CPE course may include instruction and comments by the leaders in the field of study. That is, not only are their words seen, but their voices will be heard as well (e.g., an audio clip of a speech or comment).

Actual demonstrations. Not only can the student read what should be done, but the student can observe the task being performed. By observing, the information will have a stronger impact on the student because of its visual impact. The rate of comprehension and ability to apply the concept will be increased.

Interactive. Multimedia technology provides interaction opportunities in the educational environment. A multimedia system provides a mix of words, sounds, images, and student participation to provide a richer learning environment. The student not only reads or observes what is on the screen, but sees the task being performed through video, animation, or still pictures and hears it through dialogue, music, or sound effects. Not only are more of the student's senses involved in multimedia training, but the student also becomes an active participant through interaction with the computer. Among the first applications of multimedia were video arcade games where words, animation, and sound effects were used to create entertaining and interactive games by incorporating colorful graphics, text, and sound. One of the most important features of video games is that they allow players to interact with the game. In other words, a player's actions directly affect what happens on the screen.

Not Just the Big Firms

Multimedia can provide more effective and consistent training even for firms with more limited resources. Some of the more important cost benefits of using multimedia for CPE are summarized below.

Convenience. Using multimedia will allow less interruption of the work schedule. Employees will be able to do the training at more convenient times, such as before or after normal working hours.

Travel. Less travel time will be involved, since CPE hours may be earned at the office.

Economies of Scale. Although the initial cost of creating an instructional program may be expensive, the application may be used over and over again. Duplication costs are cheap, and updating the program can easily be done. In addition, the costs of using and producing multimedia applications are declining.

Administration. CPE courses using multimedia may be given with minimal interruptions of the normal work schedule, and the programs are consistent as to the content. Furthermore, a programmed "pop quiz" can provide instant feedback so that trainees can work through a course without supervision and the computer will monitor their progress. By the time the CPE course is completed, each participant should have an adequate level of expertise.

The AICPA and state societies of CPAs could use the same approach to develop CPE multimedia programs. The AICPA, in conjunction with MicroMash and through state societies, currently offers more than 30 computerized CPE courses. These courses offer the same important cost advantages that multimedia offers. These AICPA courses, however, are not multimedia applications for they do not integrate sound, video, or animation and thus lose some of the educational advantages multimedia offers.

Just the Beginning

As the faster microprocessors needed to present computer-animated images on the screen become more affordable, the multimedia market is expected to expand rapidly. Once computers equipped with multimedia facilities are widely available, experts predict that most training will be multimedia-based. Leaders in the computer industry, including John Sculley, predict multimedia will change the world in the 1990s. If these leaders are even partially correct, CPAs need to understand and be able to use multimedia to their advantage.


Q/Media for Windows is a multimedia presentation software application that helps create presentations with video, sound, audio, and animation. Multimedia presentations are created by simply "dragging and dropping" sound, video, and animations clips onto the screen.

Q/Media includes everything needed to begin building multimedia presentations. The package comes with over 10MB of animation, sound, and video clips. When you install the Windows 3.1 multimedia device, drivers for animation, video, and sound are automatically installed.

To get the full impact of multimedia, it is recommended that an MPC compatible machine with a Windows 3.1 compatible audio card be used. Q/Media also supports a wide variety of full motion video boards including the Action Media II digital video card from Intel.

Its developers claim Q/Media can be up and running in as little as 15 minutes. Users simply drag and drop elements onto the screen and then sequence them on a graphical timeline. Q/Media has no scripting language; transitions, interaction, and synchronization are all accomplished by simply pointing and clicking.

Q/Media can import slides from many popular Windows presentation and charting applications including Microsoft PowerPoint 2.0, Lotus Freelance, and Aldus Persuasion. In fact, any presentation, drawing, or charting package that can save a file to Windows metafile format can be used to create backgrounds for a Q/Media presentation.

By combining Q/Media with Microsoft's Video for Windows, you can incorporate full motion video clips into a presentation without having to purchase any additional hardware. Q/Media for Windows includes sample video clips and the Video for Windows drivers for Windows 3.1.

To capture video and incorporate it into your Q/Video presentation you need a video capture board. Video capture boards are available from a number of vendors and depending on your requirements range in price form $500 to $2,000.

In addition to capturing video you can also purchase CD-ROM libraries of video clips that can be used in presentations. Each Q/Media package contains a list of vendors that offer stock video, animation and audio clips with many of them having special pricing for Q/Media users.

L. Murphy Smith, DBA, CPA, is the Price Waterhouse Teaching excellence Professor at Texas A&M University. He is an editor of The CPA and the Computer column of The CPA Journal. P. Paul Lin, PhD, and Jeffery R. Miller, PhD, CPA, are professors at National Cheng Kung University, Taiwan, and Augusta College, Augusta, GA, respectively.

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