Traditional accounting is a process wherein all aspects are done manually, and the transactions are recorded paper-based and stored in wide binders. Although, traditional accounting is relatively inexpensive and does not require machinery and technology, and also there is a higher need for skilled personnel to do the same. The weakness of accounting done on a traditional basis are inclusive of decreased speed, increased labour effort, comparatively low internal reporting., delayed payments, untimely payments of overdue (Victoria ,2017). The traditional accounting is very complex to consider the keep the reporting requirements and not suitable as there is a requirement of timely information in regards to pricing and costing.
By considering the case scenario and issues of traditional costing, various options can be placed to cope up with the situation and match the pace of requirements. The Walton Brothers have initially required to make reduction in the manual labour work and must consider automation that is best applicable in their filed. They can include a process such as Excel; even this step can save their several working hours. This automation solution and integration of digital and computerized tools can help them in improvising their speed and validity by automating the routine transactional process (Kumaran, 2015). The automation can be considered though leveraging a mixture of data standardization of procedures, rooted internal controls, and actual reporting as well as dashboards, by this the Walton Brothers can be able to monitor the performance an ensure process optimization. The automation software can also test the data, and contrast the real-time results and produce comprehensive reports, a framework for the automation process is inclusive of; data-driven, modular, hybrid testing framework etc. In addition, the Walton Brothers can integrate Robotic process automation, to decrease their manual process and complex labour intensive work, it acts as virtual personnel and substitutive repetitive actions and adds reliability in reports.
The best possible accounting software recommended to the Walton Group are; Sage Group and Xero accounting software. The Sage Group offers a variety of business requirements inclusive of accounting, HR, proper management of tax, income and expense which solves the issue of the current situation that is increasing business revenue leading to increasing in many expenses and other costs (Needleman, 2018). The Xero Review solves the current situation by easing the payments and invoices; it also allows bank reconciliation and data automation, it is facilitative booking software, which is the requirement of the present case. Thus, both the accounting software well matches the requirements of the firm and will help them in improving their accounting systems.
The Sage Group
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Strength · Time-effectiveness and manual process reduction · Easy bookkeeping process · Strong Data entry characteristics |
Weakness · Challenging installation · Additional prices for the update |
The Xero Review
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Strength · Enables Banks to record transactions automatically · Accessible interface to bank reconciliation (Sage 300 ERP, 2018). · Effective data integrity and reporting · Financial analysis and better management of cash flow · Cost effective data entry |
Weakness · Challenging reporting module · Limited global search · Restricted reports and payrolls |
The cost of implementing Xero is based on 5 subscription plans wherein the price of the same is $9 per month, whereas the price of the Standard plan is $30 per month and the premium plan cost varies from $70-$180 per month based on the people present on company’s payroll. On the other hand, the cost of implementing the SAGE accounting software varies from $150 to $2,500 based on the plan and requirement of the user (Sage 300 ERP, 2018).
Using an accounting software is way different from making use of the current traditional accounting tools in the present case, the difference comes in the form of speed, accuracy, costs, backups, costs and considerations (Simkin, Norman & Rose, 2014) . Traditional accounting is generally stored in binders and carried out manually, while the accounting software conducts their work on remote servers. Another difference is cost, the accounting software demands periodic costs, whereas the traditional accounting requires in-house and workforce costs.
A substitute of accounting software can be FINSYNC; it provides robust characteristics, and also users are not required to purchase a load of additional for their software. However, the software lacks the support for tax and payroll. The FINSYNC is good at providing customer services, and have a unique and impresisve feature such as invoicing, estimates, orders, expenditure tracking, inventory, bank reconciliation, budgeting, sales tax and charts of accounts (Krause, 2017). This program has various features, skilled accounting, built payroll and more user amount. The program is easier to use, and the cost of this plan is categorized into three business plan varying from $35 to $65. FINSYNC can be a dial for the present case and so as to gain sound financial systems.
The role of technology has been increased, as it has improvised the ability and performance of accountant to understand data and statistical values in an effective manner. The emergence of technology and its major role have evolved the entire profession of accounting, and it is believed that the accessibility provided by technology to new software has facilitated the job of accountants. Technology has provided various benefits to accountants namely; instant access, software updates and advancements, mobility, better bank accessibility and easier signing and scanning of documents (Susskind & Susskind, 2015). Along with this, with the help of expert accounting software and advanced technologies, it is considered that the evolution of technology has remarkably improvised accuracy and accounting field while has decreased the error margin. Thus, the technology has played a great role in the daily practices of accounting and has taken the entire profession to a new level with the potential for better opportunities.
The use of an information system helps in increasing speed as well as accuracy; however, the entire human error cannot be reduced as there is some scope in every situation. If the information is not accurately recorded, then the system might not be able to solve it. Errors take place in accounting and for this internal supervision and better information systems are required to avoid or detect them (Moray, 2018). Further, a computerized system must possess secured access to reduce the changes of unauthorized use, and accountants are also required to review and ensure that the information is accurate. At present accountants have ineffectiveness of paper-based tracing by the implementation of information system and technology, with the optimal process and framework, the data accountability is created, and the possibility of errors is reduced (Dekker, 2017).
At present, professionals are less focusing on paper-based accounting and are accepting the technology work environment to satisfy the demands of the client. There are various advantages of going paperless, which is inclusive of time and cost-effectiveness, securing accounting firms and clients while streamlining the practices of the accounting. In addition, higher importance is given towards eliminating the aspect of paper so as to keep up with the technological and digital emergence and save time and costs. Further, this trend is earning momentum and is continued, as it makes the accounting firm more reliable and effective in terms of providing related accounting services to clients (Karlsen & Wallberg, 2017). The paperless work process adds more of productivity, efficiency and profitability when it comes to accounting, and the most obvious benefit of paperless investment is that there are various ways to quantify the return on investment, with the implementation of digital work and tools, now firms are eliminating the invoice processing time and fees, as well as taking full benefit of foreman pay discounts simultaneously.
The failure of internal control takes place if the auditor does not comply with the fundamental principles or does not conduct the crucial process as per the International Standards on Auditing. Internal control failures take place when there is a severe distortion of the financial data which is not stated in the audit reports and has made harsh errors and faults in conducting the auditing. The auditors can be overly influenced by possessing direct or indirect financial interest in the client (Knechel & Salterio, 2016). The factors that led to internal control failure are also inclusive of weak judgments held in decision making, and those decisions which are based on the inaccurate provision, information or by unprofessional personnel also internal control failure is also held by human error, yet an effectively developed internal control work scenario can mitigate this to some extent. The failure of Enron is also the example of the biggest bankruptcy of world and is related with the audit failures wherein the audit firm formed corporate structures, financial transactions, various subsidiaries and also the internal audit and auditing regulators were spoiled to check the failures and the firm tore a range of reliable digital and paper-based document (Alles, 2015). The situation has turned out to be a common thing in the accounting world, it has been believed that even big company face such collapse and receive a non-qualified audit report and thereby fail with the aspect that the financial statements are abhorrently misstated, For example, Toshiba is said to be the first one to adopt the reforms of corporate governance which satisfy the corporate governance standards. Further, the case of Toshiba evidenced that a mere corporate governance structure does not necessarily result in well corporate governance and can eventually lead to corporate governance failure. The internal audit fault in Toshiba was that it was highly focused on services related to consultation instead of services related to assurance (Bhattacharyya, 2015). The non-effectiveness of financial operations, non-validity of financial reporting, and non-adherence to suitable laws and standards are the aspects that can cause an audit and internal control failures.
By considering this aspect, it can be cited that the audit failures can be mitigated, when the auditors follow the applicable GAAS and GAAP and maintain the validity and reliability of the financial reports and statements. For properly and effectively managing the financial operations, the audit firms are required to identify the operational levels, financial and adherence risks that are expected to be assumed (Bell, Causholli & Knechel, 2015). In addition, optimal control activities must be included, such as approvals, verifications, performance review, security, duty delegation, information system control and authorization to prevent such failures.
References
Alles, M. G. (2015). Drivers of the Use and Facilitators and Obstacles of the Evolution of Big Data by the Audit Profession. Accounting Horizons, 29(2), 439-449.
Bell, T. B., Causholli, M., & Knechel, W. R. (2015). Audit firm tenure, non?audit services, and internal assessments of audit quality. Journal of Accounting Research, 53(3), 461-509.
Dekker, S. (2017). The field guide to understanding’human error’. CRC Press.
Karlsen, A. C., & Wallberg, M. (2017). The effects of digitalization on auditors’ tools and working methods: A study of the audit profession. Sage.
Knechel, W. R., & Salterio, S. E. (2016). Auditing: Assurance and risk. Routledge.
Moray, N. (2018). Error reduction as a systems problem. In Human error (pp. 67-91). CRC Press.
Simkin, M. G., Norman, C. S., & Rose, J. M. (2014). Core concepts of accounting information systems. John Wiley & Sons.
Susskind, R. E., & Susskind, D. (2015). The future of the professions: How technology will transform the work of human experts. Oxford University Press, USA.
Online
Bhattacharyya, A., (2015). Toshiba – a case of internal audit failure. Retrieved from <https://www.business-standard.com/article/opinion/toshiba-a-case-of-internal-audit-failure-115080900760_1.html>.
Krause, C., (2017). FINSYNC Review. Retrieved from https://www.merchantmaverick.com/reviews/finsync-review/>.
Kumaran, S., (2015). How to Improve Finance and Accounting Department Efficiency. Retrieved from <https://www.invensis.net/blog/finance-and-accounting/how-to-improve-finance-accounting-department-efficiency/>.
Needleman, T., (2018). The Best Enterprise Accounting Software of 2018. Retrieved from <https://in.pcmag.com/cloud-services/101687/guide/the-best-enterprise-accounting-software-of-2018>.
Sage 300 ERP, (2018). Retrieved from <https://www.top10erp.org/sage-300-erp—products-23>.
Victoria C, (2017). Manual Accounting Versus Computerized Accounting. Retrieved from <https://www.experience.com/advice/professional-development/manual-accounting-versus-computerized-accounting/l>.
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