The adoption of cloud based accounting information system in business l. Introduction Accounting Information system is playing an Important role In the business operation, and the cloud computing has a great Impact on the revolution of accounting Information system. This research paper alms to discuss the new trend of cloud based accounting Information system In business.
The whole text Is divided into three parts: First part gives an overview of the cloud computing and accounting information system; second part analyses the benefits and challenges of the counting information system’s move to the cloud; and third part gives the recommendations on key success factors of the adoption.
II. Cloud-based accounting information system overview I. Cloud computing According to the definition given by the NIST (National Institute of Standards and Technology), “Cloud computing is a model for enabling ubiquitous, convenient, on- demand network access to a shared pool of configurable computing resources (e. . , networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.
This cloud model is composed of five essential characteristics. ” The NIST also identified the following five essential characteristics that cloud computing has: (I) “On-demand self-service”. With the time and network stored in the cloud server, cloud computing dramatically reduces consumers human interaction with the service provider. (II) “Broad network access”, which enables services to be provided through Internet on a variety of client platforms. Iii) “Resource pooling”. Multiple consumers can be served together by the pooled computer resources based on deferent remote data centers. Iv) “Rapid elasticity’. The scale of services can be adjusted rapidly according to the consumer’s demand. (v) “Measured service”. The usage of computing resources Is measured by the cloud systems automatically, thus utilizing the service provided to the consumer. There are basically three service models: Software as a Service (Slash Platform as a Service (Pas) and Infrastructure as a Service (alas), and four deployment models: Public cloud, Private cloud, Hybrid cloud and Community cloud. Mel and Grange, 2011). Lie. Accounting information system (ASS) Accounting information system is often described as “the combination of two terms- Accounting & Information System, whose major function is to collect, financial data, process it & provide financial information to the external & internal users” (Sales’ et al. 2014, up. 186). In essence, accounting information system is not necessarily a computerized system, It can be merely a simple manual system using pen and paper. However, with the rapid development of cloud computing, It has an Increasingly significant Impact on the revolution of accounting Information system.
Australian market, MOB and Cookbooks have been the dominant accounting software providers for the past 25 years. However, cloud computing opens up possibilities for new software to enter into market. Xerox and AAAS are the examples of those strong contenders in this area. (Embroideries Accountants & Advisors, 2014) According to a research study conducted by ACH Australia in 2013 nationwide, fourteen per cent of small and medium enterprises are using a cloud based software to manage their accounts, while the adoption among accountants is much higher, almost one in four currently using a cloud platform.
ACH, 2013) Although cloud accounting information system is still a new concept in the accounting area, more and more businesses are expected to be involved in the adoption of cloud accounting information system. Ill. Benefits and challenges genuineness can enjoy great benefits from the adoption of the cloud based accounting Information system, many previous papers have already discussed on this. (White, 2010; Christmas, 2012) The main benefits are concluded as follows: I.
Benefits of the adoption of cloud based accounting information system (I) Cost-saving: y adopting the services provided by the cloud computing supplier, the business could enjoy the benefit of the overall reduction of expenses, including the purchasing on hardware and software, system development and maintenance input. The professional assistance from the supplier’s IT supporting team is a great saving on the time and labor cost as well. (it) Easier access: Taken the advantage of cloud system, the business could get an easier access to the accounting information with more flexibility on time and place.
Rather than simply based in the physical office, the cloud accounting software can be accessed from office, from home, or from anywhere else in the world via various platforms such as mobile phones, laptops and tablets. The convenience of cloud accounting information system could greatly contribute to the effectiveness and efficiency of the business operation. (iii) Automation: Cloud-based accounting information system automates many business processes and saves accountants from loads of paper work they previously had to manage under the manual business process.
Automation of the cloud based accounting Information system system provides the business with more accurate and consistent counting processes and saves the accountants from loads of paper work. (v) Reliability: Using real time data and keeping updated in the cloud, errors are less likely to happen and more easily to be identified. The integration of accounting process helps to improve the reliability of the accounting information. (v) Security: Ninth all accounting information stored in the cloud, the password login prevents unauthorized access related with the confidentiality concerns.
All activities on the cloud are recorded for the business to track the details, thus preventing security issues from happening. Continually back up service provided by the cloud computing software also enhances the security of the accounting information. (v’) Competitiveness: much quicker to the changes of business environment and market demands, therefore winning a more competitive situation in the industry. I’. Challenges from the adoption of cloud based accounting information system Apart from the benefits mentioned above, the challenges from the adoption of cloud accounting information system should not be ignored. I) Fear of privacy and data security: eased on the cloud rather than in-house bookkeeping, the private and sensitive counting information of the business is stored on the third-party servers, which is more vulnerable to be detected by hackers and bears higher risks in the confidentiality issues. (it) High requirement on network quality: Given that the Internet access is the basis of the cloud accounting information system, the quality of network must be taken into account. Network failure will lead to the thorough breakdown of the entire business operation.
As a result, the economic loss is beyond imagination and it can offset any of the advantages of the cloud accounting information system. Iii) Dependency on service provider: Ninth the move the cloud, the business has to rely on the outsourcing cloud service supplier to maintain, update and manage the application, and gradually loses control over it, which gives rise to the uncertainty of internal-control ability. The business may undergo significant difficulties under the inefficient response of the supplier towards certain problems. IV.
Recommendations Moving to the cloud is a global trend in the business. Accounting information system IS not exempt from this trend. According to the ACH research study mentioned before, “Six in 10 (60%) accountants who are not currently using a Cloud-based system consider it likely they will adopt one in the next 2-3 years. ” (ACH, 2013) For the business considering moving to the cloud, the following recommendations may help them to adopt a successful movement. (I) Develop cloud adoption strategy plans: before moving to the cloud, the business should develop strategy plans.
The choice of service model (public cloud or private cloud; Software as a Service or Platform as a Service or Infrastructure as Service) is of vital importance in this process. It is also important for the strategy plan to cover all possible contingencies and list the possible approaches to deal with the arising problems. (it) Make the proper choice of cloud supplier: rhea cloud based accounting information system supplier plays an critical role in the success of moving to the cloud. Therefore, a complete research and market analysis should be made before coming into the contract with the supplier.
Characteristics that need to be taken into consideration include the market position, previous service experience, prices, reliability and stability of the cloud service and others. (iii) Integration of cloud based accounting information system with current system: The business should be aware of and get ready for the integration. Proper adoption on the organizational structure and business procedure should be planned in advance movement should be provided sufficient knowledge, training and technical support. Iv) Monitor ongoing cloud based accounting information system: After the Implementation of the cloud based accounting information system, the business should carefully monitor the ongoing system. Regular review of the user experience feedback should be conducted to collect the information needed for solving robbers and improving the system. V’. Conclusion This research report dealt with the adoption of cloud based accounting information system (ASS). It summarizes the opinions of previous researchers.
Cloud based accounting information system is generally a combination of the accounting information system with the global information technology trend of cloud computing. This research report analyzes the benefits as well as the challenges from the adoption. As conclusion, the business is encouraged to adapt the cloud based accounting information system. However, in order to achieve a successful adoption, our recommendations of key factors are given as references for the business.
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