Discuss about the Accounting Information Systems for Processing Data.
Accounting information systems tends to be a computer based strategy that aims at tracking the accounting activities in conjunction with levels of information technological resources. Hence, AIS enhances responsibility of collecting, storing and processing of the financial and accounting data used for in internal management of decision making, including the non-financial transactions that are directly affected by processing of the financial transactions (Boczko, 2012). Typically in AIS tends to be made up of three major subsystems they include; transaction processing system that tends to enhance daily business operation, general ledger system and the financial reporting system, and the management reporting systems (Hurt, 2013). Therefore, the main idea about information system is to embrace enterprise resource planning.
Looking at cloud computing it tends to take the description of a stack or a response made of broad range of services that are built on top of one another that is under what is known as moniker cloud. Hence, the general definition pertained to cloud computing mainly comes from the National Institute of Standards and Technology which states that cloud computing tends to be the modeling that enables convenience, on demand networking access to the shared pool of configurable computing resources to the rapidly provisioned and released some minimal management effort or the service providers interaction (Kay & Ovlia, 2012). Therefore, typically terms such as cloud computing tends to provide end users with the ability to utilize parts of the bulk resources and the resources tend to be acquired faster.
Since, cloud computing mainly entails utilization of bulk resources and creating the ease of the resources being attained; it functionalities include:
Looking at the above stated functionalities, it tends to be evident that cloud computing tends to be increase efficiency in a firm. Looking at examples of the cloud computing software’s in the market. First, we have the software as mode of service which provides licenses as an application to the customers either as service on levels of demand or through subscription (Mancini et al, 2013). Secondly, there is the platform as service which brings advantages that Saas bought for application. Hence, this cloud computing software’s have a significant purpose in development of accounting information.
Terms like e-service and web service are mostly used in the identification of autonomous software components that uniquely identifies a uniform resource identifier. Hence, in most cases the web services tend to corresponding to communication via the internet. Thus, facilitating Enterprise Application Integration, this means that among applications information circulates easily in the organization (Boczko, 2007). Hence, today the development of such services allows integration between AIS, operating systems and web application. Hence, this means that through AIS it becomes easy to enhance external reporting and real time report thus, increasing the availability of information to stakeholders in fulltime accessibility.
It also becomes evident that through cloud technology there is the viability of increased security. Even if there are public perceptions that the cloud technology isn’t secure and are vulnerable. Cloud providers tend to typically perceive that through these cloud systems they provide secure services that with what most SMEs can provide (Arachchilage et al, 2014). Hence, this means that in AIS it tends to provide some form of transparent and accountability, this is because the information provided is viable and free from any instance of fraud.
The existence of cloud technology in accounting information system is also perceived to enhance elasticity of the services being provided. In this case, it means that there is effective development of the information being created escalating the viability of information in accounting process.
The traditional process of accounting involved a lot of manual work and this led to time wastage when conducting the process. Compared to the cloud technology system the accounting procedures have become simplified and in this case the cost has reduced and in other cases eliminated (Wilkinson, 2009). Hence, this means there will be proficiency in the levels of accounting information being provided.
The traditional accounting process failed to have the viability of flexibility in the information being provided, but when using the cloud technology there is flexibility in provision of information, where it is viable anywhere, anytime and any day. It also tends o enhance the removal of capital expenditure on the hardware being removed and replaced by operating expenditure on the cloud services. Hence, this means that cloud accounting computing cuts the cost. This tends to be viable, since according to (Richardson et al, 2014) technology tends to support staff cost reduction.
Compared to other software management accounting process, it becomes evident that through the use of cloud computing in the accounting process. The management of the software tends to be simplified because of the process of installation and updating on regular terms. It becomes evident that these benefits tend to be vital for a firm, but there are also challenges that exist in the system.
It is evident that cloud based accounting tends to provide flexibility and sustainability in the accounting information provided. Hence, one tends to be confident with the flow of the business, but the challenge that emerges is that the cloud computing software’s need frequent update of the latest version so as to work to expectation. At times the issue of updating may be complex or even become an extra expense for the firms that have adopted the cloud accounting computing software (Nash & Roberts, 1984). Therefore, the aspect of added expenses for updating tends to be a challenge for firms who have minimal funds to spare for the updating process.
The public tends to perceive that through cloud computing there is insecurity of data or confidential information. Hence, this means that there is development of insecurity myth in these systems. From such reasoning, it may affect a business because they would consider using the traditional process which they believe is most appropriate leading the clouding process of accounting behind. Thus, it is likely that most firms would prefer to work the traditional accounting setting making it a challenge for firms to adopt the cloud computing process in their systems.
The implementation of the cloud process tends to be lucrative, thus the need of management accountants to know the importance cost savings and system flexibility consideration in the systems. Therefore, management accountants need to play the role of not only carrying an evaluation costs and benefits of the technology, but also maintain that the benefits of cloud technology by ensuring that it is a more collaborative process and well communicated to managers for purpose of effective implementation (Hall, 2011).
Once the system has been adopted in a firm there is need of creating a collaborative system between technical experts and cloud service providers so as to make sure data is secured properly.
It is also evident that through the cloud based system tends to increase information available. Hence, this means that for future purposes there is need of controlling information. Another fact is that management accountants could also function in providing the right information, getting to the right support at the right time and in the correct format. Thus, this will reduce instances where businesses experience inefficiencies in their information viability.
Since, cloud accounting involves the use of different software’s in the accounting process. It means that not all software’s fit an organizations setting. Hence, this means that for there to be efficiency there is need of making an effective consideration in the systems before you implement software (Wilkinson, 2009). Consideration of this would be helpful as it would lower instances of errors emerging in the systems and lowering chances of increased expenditure as a result of system fault. Hence, the consideration of these factors would be significant when adopting the computing process in organizations accounting process.
Conclusion
From what we could perceive here is that through cloud services there is data security compared to the public perception of the system. At times businesses may decide to keep data in a room, but if they adopt the private cloud configuration systems. It is likely that their knowledge of the information available is likely to increase due to this system. But, the most ignored thing that i have noted based on this cloud system is that the adoption of the system is built on the assumption of management accounting have sufficient knowledge of the system, this may turn out to lead to ineffectiveness in the system. Hence, it would be expected that a consideration of such a factor. Finally, based on our argument it’s also evident that the role of management accountants hasn’t changed as a results of cloud technologies.
References
Kay, D., & Ovlia, A. (2012). Accounting information systems: the crossroads of accounting & IT. Boston, Pearson.
International journal of accounting information systems. 2010 [New York, NY], Pergamon.
Hurt, R. L. (2013). Accounting information systems: basic concepts and current issues. New York, NY, McGraw-Hill.
Boczko, T. (2012). Introduction to accounting information systems. Harlow, England, Pearson.
Boczko, T. (2007). Corporate accounting information systems. Harlow, Financial Times Prentice Hall.
Arachchilage, D. K., Kay, D., & Ovlia, A. (2014). Accounting information systems.
Mancini, D., Vaassen, E. H. J., & Dameri, R. P. (2013). Accounting information systems for decision making. Berlin, Springer.
Wilkinson, J. W. (2009). Accounting information systems: essential concepts and applications. New York, Wiley.
Richardson, V. J., Chang, C. J., & Smith, R. (2014). Accounting information systems.
Hall, J. A. (2011). Accounting information systems. Mason, OH, South-Western Cengage Learning.
Nash, J. F., & Roberts, M. B. (1984). Accounting information systems. New York, Macmillan.
Australia, C. L., Dull, R. B., & Gelinas, U. J. (2014). Accounting Information Systems. Melbourne, Cengage Learning Australia.
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