Accounting Information System Entrepreneurs

Question: Discuss about the Accounting Information Systemfor Entrepreneurs. Answer: Introduction: The objective of accounting information system is to help the entrepreneurs to know the financial position of any business with different aspects of financial accounting by gathering of data and generating relevant information from those data as per prescribed format as authenticated by different accounting standards in regional level. This report will highlight the issues which can help the users of AIS to select their own specific choice to meet the expectation. (Romney, 2012). Traditional AIS and Cloud Based AIS- Brief Definition and Elaboration: Traditional AIS is the conceptual information system which was prevalent in end of last decade with the objective of making own information system of accounting for the business houses. The basic feature of these AIS is to ensure that the business would have its own customized AIS which can provide the scope of gathering financial data and produce financial information which can be well ready to extend the scope of business accounting of the establishment. As traditional AIS is tailor-made in nature, this unique concept for each individual business entity and not available in generalized format. Although basic concept of this AIS is depending upon the accounting norms and standards as per prevalent culture, the application of traditional AIS provides high-level of tailor made provision with the security and conservancy of data with confidence (Dull, 2014). Present trend of global business demands such environment which can provide easy way getting accounting done surpassing the barriers of complicacy of traditional accounting. Current situation also demands mitigation of capital expenditure with justification of return on investment, to suffice these purposes, cloud based accounting had come to facilitate the process of ensuring wider range of accessibility of accounting software with easy understanding of the accounting system to execute with efficient manner. Cloud based accounting is emerging the scope of great utility of accounting with additional features of POS management with online payment. Accessibility of this AIS is not barred by any location or region; instead the same is wide open globally by the aid of internet (Considine, Parkes, Olesen, Blount, Speer, 2017). Difference Between Traditional and Cloud Based Accounting System: Features Traditional AIS Cloud based AIS License of accounting software Establishment owns the proprietorship Establishment is the tenant Location of the system As per the choice of the establishment Cloud Hardware Owned by the establishment (Halabi Dyt, 2007). Included in the monthly rent or license fee Windows and SQL Server To be provided by the establishment Included in the monthly rent or license fee Maintenance Cost Separated, normally as per AMC Included in the monthly rent or license fee I T Resources Provided by the establishment or outsourced Not essential Number of users Limited as per establishment specification (Qut, 2016). Unlimited Potential Risks of Cloud Accounting: Security and Confidentiality of Data: Cloud based accounting raises the serious risk of security and confidentiality of data, especially in the domain of cash and bank management which is projecting the financial strength of the establishment. As this AIS has the scope of storing its data in the cloud, different level of infiltration may interfere the data through malwares or viruses along with non-speculative interference of hackers with evil intention (EDT, 2014). Poor Communication: As cloud based accounting is totally depending upon the communicative instrument of internet, the module can only work when the device of work is connected with internet. If the same is getting interrupted, the accounting work is not possible due to discontinuation of connectivity. Lack of Control: It is evident from cloud based AIS application that the establishment ahs to depend totally upon the provider. In case of any misappropriation of application, the entire data stored in the system may act as irregular with irrelevant outcome. As the establishment is totally dependent upon the provider, the problem will persist till the application is fixed with solution (Gerber, 2015). Dependency: The establishment has to depend upon the provider as the storage of data with reformation to conclude useful information is totally under the software maintained in cloud. In case of any switchover to other accounting application, old data is getting obsolete as the transfer of data and respective information is hardly to be migrated from the erstwhile AIS to new one(Hansen, 2015). Recommendations: Recommendations are made for suitability of cloud based AIS for the establishments is to find out the need of the business irrespective of its size and type of business. There are certain features which are to be considered for opting cloud based AIS for the business entities: Recovery of data after disaster Update of software by default through automatic system Mitigating the scope of capital expenditure to initiate cloud based AIS Providing the scope of enhancement to collaborate multi level amongst the users No specific work place or time ROI justification on the expenditure Conclusion: Traditional AIS had replaced the old practice of manual accounting which is prone to human error. Traditional AIS has provided the accounting solution in the 90s and that was greeted for reduction of man hour and errors. Gradually the need of global business had changed. That has generated the need of cloud based accounting which is free from location and time constraint with other relevant features like POS management and internet option for payment. Business is growing in fast pace and new demands are created for faster application of composite model which can provide easiest solution to all irrespective of the qualification and educational background of the user. Present global business does not concentrate in a single region or locality; instead it is spreading all over global scenario. This situation demand upgrading of accounting system with the required features which may be needed for smooth and efficient running of business. Cloud based AIS is gradually replacing traditional AIS due to its salient features and the same needs to be more secure in its application to gain the confidence of the clients related to security, integrity and confidentiality of the provider with special emphasis on the finance management for the sake of the users. References: Considine, B., Parkes, A., Olesen, K., Blount, Y., Speer, D. (2017, February 21). Accounting Information Systems. Retrieved March 16, 2017, from Wileydirect: https://www.wileydirect.com.au/buy/accounting-information-systems-understanding-business-processes-4th-edition/ Dull, B. (2014). Accounting Information Systems. Retrieved March 16, 2017, from Cengage: https://cengage.com.au/product/title/accounting-information-systems/isbn/9780170355391 EDT. (2014, January 29). How to manage risks associated with accounting in the cloud. Retrieved March 16, 2017, from Sbnonline: https://www.sbnonline.com/article/how-to-manage-risks-associated-with-accounting-in-the-cloud/ Gerber, B. (2015, February 08). Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services. Retrieved March 16, 2017, from Accountingdepartment: https://www.accountingdepartment.com/blog/3-security-concerns-with-cloud-based-accounting-software Halabi, A. K., Dyt, R. (2007). Empirical Evidence Examining the Accounting Information Systems and Accounting Reports of Small and Micro Business in Australia. Retrieved March 16, 2017, from Tandfonline: https://www.tandfonline.com/doi/abs/10.5172/ser.15.2.1?journalCode=rser20 Hansen, P. (2015, March 03). Cloud Accounting vs. Traditional Accounting Software. Retrieved March 16, 2017, from Smallbizdaily: https://www.smallbizdaily.com/cloud-accounting-vs-traditional-accounting-software/ Qut. (2016, September 14). Accounting information systems research. Retrieved March 16, 2017, from Qut: https://www.qut.edu.au/research/research-projects/accounting-information-systems-research Romney, M. (2012, October 14). Accounting Information Systems Australasian edition. Retrieved March 16, 2017, from Pearson: https://www.pearson.com.au/products/O-R-Romney-Marshall-et-al/O-R-Romney-Marshall-Et-Al/Accounting-Information-Systems-Australasian-edition/9781442542594?R=9781442542594