Accounting Information System thought Leadership

Question: Discuss about the Accounting Information System thought Leadership. Answer: Introduction Accounting information system is the system through which business entities can derive their financial position through the available financial data of the business. Financial data are the main resources through which financial information of any business entity can be derived with detection of profit or loss and the assets and liabilities with evaluation of owners equity. There are different AIS followed by business entities with brad division of traditional and cloud-based AIS. In this report we will highlight the different aspects of AIS with clear distinction between traditional and cloud based AIS. This report will also consist of potential risk factors related to the latest version of AIS based on cloud-based technology. This report will conclude with the recommendation of using cloud based AIS for the establishment to make them able to decide for adopting the right AIS for their business(Businessdictionary, 2016). Traditional and cloud based AIS definition with detailed discussion Traditional AIS is such AIS which is owned by the establishment with its customized impact fixed as per the need of the business. This AIS is getting popular in the 90s and 2000 when the establishment felt the need of such AIS for maintaining their accounts which will provide features of confinement of data within the organization and subsequent financial information can be generated as per the accounting standards prevalent in the region. It was often found that this AIS is followed by big business establishments which need to handle big financial data and the issues of security and confidentiality would get highest preference(Beal, 2013). Cloud based AIS is the latest invention of AIS which provides the accounting software in generalized format to ensure accounting system of any organization with lots of flexibility in terms of its users, and accessibility. It is often found that cloud based accounting is becoming the automatic choice of the users due to its easy understandability and operational process. Moreover the demand of e commerce which is reckoned as latest mode of business can also be entertained by this AIS with the additional feature of POS management and e-payment facilities(Sinclair, 2015). Differences between traditional and cloud based AIS Differences of these two AIS are highlighting the features of those which can be detrimental for choosing of them as per the need and respective compliance for the business establishments: Features Traditional Accounting information system Cloud based Accounting information system Ownership of AIS Owned by the establishment User is with the status of tenant Location of the AIS Location is confined as per the preference of the owner Location is in the cloud Hardware of AIS Hardware is to be provided and owned by the proprietor Dedicated hardware is not necessary as the data storage is in cloud Windows and SQL Server Owner has to provide the facilities User has to depend upon the provider for these Maintenance Cost AMC with provider Covered in rental amount I T Resources Business entity has to provide No requirement of such resources Number of users As per the specified numbers chosen by the owner N-number of users with no limits(Smallbizdaily, 2015). Potential risks of cloud based AIS Secured and confidential storage of data- It is vulnerable as it has got enough scope to be intervened by malwares, viruses and hackers. Communication issue- As this AIS is run through the communication mode of internet, low or bad bandwidth of internet can hamper the continuity of this application(Gerber, 2015). Shortage of control- As the financial data stored in cloud, there is no such control by user in this respect. Dependency- The user has total dependency in financial data management on the provider due to storage of the same in cloud based server of provider(Sbnonline, 2014). Recommendations Lastly to recommend the users about cloud based AIS, it can be opted by any business irrespective of its size and nature of small, medium or large whose needs are catered about compliance of following features: Version update of software automatically Mitigating capital expenditure Enhanced collaboration between different level of users Flexible location and timer period POS management and electronic payment compliance Data recovery after disaster References: Beal, V. (2013, February 17). 5 Top Picks for Small Business Cloud-Based Accounting. Retrieved March 18, 2017, from Cio: https://www.cio.com/article/2388062/small-business/5-top-picks-for-small-business-cloud-based-accounting.html Businessdictionary. (2016). accounting information system (AIS). Retrieved March 18, 2017, from Businessdictionary: https://www.businessdictionary.com/definition/accounting-information-system-AIS.html Gerber, B. (2015, February 08). Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services. Retrieved March 18, 2017, from Accountingdepartment: https://www.accountingdepartment.com/3-security-concerns-with-cloud-based-accounting-software Sbnonline. (2014, January 229). How to manage risks associated with accounting in the cloud. Retrieved March 18, 2017, from Sbnonline: https://www.sbnonline.com/article/how-to-manage-risks-associated-with-accounting-in-the-cloud/ Sinclair, N. (2015). 6 Reasons to Move to Cloud Accounting. Retrieved March 18, 2017, from Intuit: https://www.intuit.com.au/r/how-to-run-your-business/6-reasons-to-move-to-cloud-accounting/ Smallbizdaily. (2015, March 03). Cloud Accounting vs. Traditional Accounting Software. Retrieved March 18, 2017, from Smallbizdaily: https://www.smallbizdaily.com/cloud-accounting-vs-traditional-accounting-software/