Cloud Based Accounting Information System

Question: Discuss about the Cloud Based Accounting Information System. Answer: Introduction: The cloud accounting software is self-installable software for accounting, hosted over remote servers. Data is returned to the user after being sent through the cloud. With the help of cloud accounting it becomes easy to fetch the real-time reporting. Utilizing its higher mobile collaborations and capabilities, it also helps in visibility throughout the organization (Cleary Quinn, 2016). The report explores the definition of the cloud based accounting system. The differences of it against the traditional accounting information system or AIS have been identified. Further the limitations or the potential risks of the approach have been discussed. Lastly, recommendations are made based on the findings from the advantages of cloud based accounting information system. The traditional accounting information system or the AIS is a system dealing with the storing, collection and process of accounting and financial information. These data is been used by the decision makers. An AIS is an in general computer based process to track the activity of accounts in collaboration with the information technology or IT resources (Aoki Nguyen, 2014). In the cloud based AIS on the other hand, all the application functions are done off-sites. Here, the users are able to access the software applications via online by cloud application service provider remotely. It helps in freeing the business from installing and maintaining software in particular desktops. Besides, it also helps the users like employees working in separate departments in accessing similar information and equal versions of the same software (Asatiani et al., 2014). Difference between traditional and cloud based AIS: The accounting firm must utilize the traditional and cloud based AIS on the basis of the following differences: Traditional accounting information system Cloud based accounting information system Hardware The hardware has been provided by the organization. The hardware will be already included. Accounting software license Here the owner is the company itself. Here the company will act as the tenant. Windows SQL Server Windows SQL Server has been given by the organization. It will be already provided. The system location The system remains the companys choice. The system location will be in the cloud. The numbers of users The number of users has been license limited. The number of users will be unlimited. The IT resources The IT resources were given by the organization. It was also outsourced. IT resources will be unnecessary. The cost of maintenance The cost of maintenance has been separated. The cost of maintenance shall be included. Source: (Pongpattrachai, Cragg Fisher, 2014). Limitations and potential risks in using cloud based AIS: Despite its highly beneficiary structure, the cloud based AIS is also not been without its drawbacks. Its restriction in application and risks are as follows: The accounting firm has to pay extra for a trustworthy accounting package online for many years. The software updates are needed to be bought at every five to six years alternatively. Hence, its cost is a primary disadvantage for cloud based AIS. Data present in cloud anywhere in the world indicates that it might become uncontrollable. This may create problems. For this proper rules for jurisdiction must be applied to keep the data secure (Peng Gala, 2014). There has been certain tasks that the cloud based AIS must not perform. It has been arising due to restrictions in operating systems, infrastructure or applications. The accounting firm can only offer what already exists for them. Additionally, they are able to give updates that are going to be introduced in near future. This becomes difficult and almost impossible to configure according to ones own choice like the desktop software The backups are other obstacles in this type of AIS. Most of the cloud software for accounting does not have the ability to keep backups of information. Also it cannot export the data or same it to ones own machine. So retrieving the print out of selected copies become hard. Hence, packages cannot be changed. Moreover, long-term records cannot be kept without paying for a long time (Oliveira, Thomas Espadanal, 2014). The accounting firm might need strong control over accounting information. They must not wish to access in the unsafe wireless network region. Moreover, they might not be comfortable with direct monitor usage. For them cloud based AIS has been a week option. The accounting firm like the banking sectors holds very sensible financial data. They never want any other outside parties to get access to their data. Moreover, they might want to keep control on the security level totally by keeping the data in-house. For these the using of cloud-based AIS has caused risks. The software programs of cloud accounting might be needed in the firm to get signed in the usage contact. This will create limitation for the firm if it is devoid of the knowledge of how long to exist (Bhimani Willcocks, 2014). Recommendation: There exist various companies that may get full benefits from a cloud based AIS which are recommended below: Those organizations having small budget can gain advantages from the cloud based AIS. This is due to the fact that the cloud system generally expenses less over the time to invest than the traditional systems. The business types where the employees work in remote places can also be considered. This is because they go for the accessible and the convenient style of cloud based AIS. There have been many business types who prefer to keep the data safe from the security threats. They shall opt for cloud based AIS, as they have been unable to provide adequate security. Finally, the companies that need to avoid potential mishaps physically with technology in workplace are recommended to use the cloud system. The mishaps that include fire, flood or burglary might destroy their hard drives (Cleary Quinn, 2016). Conclusion: The beauty of the cloud based AIS has been its flexibility that help any business to run from workplace, home or wherever anyone goes. The up-to-date on the on-goings can be kept easily. The development and delivery of software updates has been easy and faster in cloud. The data here is totally fluid. Moreover it has been easily accessible and the possibilities become limitless. Utilizing the cloud fully, improve the productivity and efficiency of business. The tension to maintain and install has been dropped off. As a result, more time has been extracted to concentrate on the activities like generating of revenue. The data streamlined as noticed transparently provides a clear idea of the finances. Thus, the advantages as discussed in the report may urge the business to switch to the cloud technology for accounting purpose. This also offers high user experience. Finally, values are added to the client services also. References: Aoki, M., Nguyen, T. P. D. (2014). The Evolution of Management Accounting Practices in Vietnam-a Survey research on Vietnamese food and beverage enterprises. Asatiani, A., Apte, U., Penttinen, E., Ro?nkko?, M., Saarinen, T. (2014, January). Outsourcing of disaggregated services in cloud-based enterprise information systems. InSystem Sciences (HICSS), 2014 47th Hawaii International Conference on(pp. 1268-1277). IEEE. Bhimani, A., Willcocks, L. (2014). Digitisation,Big Dataand the transformation of accounting information.Accounting and Business Research,44(4), 469-490. Cleary, P., Quinn, M. (2016). Intellectual capital and business performance: An exploratory study of the impact of cloud-based accounting and finance infrastructure.Journal of Intellectual Capital,17(2), 255-278. Cleary, P., Quinn, M. (2016). Intellectual capital and business performance: An exploratory study of the impact of cloud-based accounting and finance infrastructure.Journal of Intellectual Capital,17(2), 255-278. Oliveira, T., Thomas, M., Espadanal, M. (2014). Assessing the determinants of cloud computing adoption: An analysis of the manufacturing and services sectors.Information Management,51(5), 497-510. Peng, G. C. A., Gala, C. (2014). Cloud ERP: a new dilemma to modern organisations?.Journal of Computer Information Systems,54(4), 22-30. Pongpattrachai, D., Cragg, P., Fisher, R. (2014). The relation between IT usage and performance has been a central question in the AIS literature since the late 1990s. Empirical research has not yet examined whether organizational-level differences in how IT is used are associated with performance, nor whether the lagged performance effects found in for-profit settings carry over to a not-for-profit setting. Spending on information technology (IT)...International Journal of Accounting Information Systems,15(1), 47-65.