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ACCOUNTING INFORMATION SYSTEMS AND CLOUD COMPUTING

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Abstract

Thepurpose of this study is to determine the feasibility of cloudcomputing for accounting information systems, specifically for smallbusinesses in the inner cities of USA. For the purpose of this study,a small business is one that totals sales in the range of $50,000 to$250,000. The accounting industry and accounting information systemshave seen a relatively high rate of cloud computing adaptation. Smallbusinesses in the inner cities face unique problems in theimplementation of accounting information systems. This paper seeks tofind if cloud computing could provide small inner city businesses inthe USA a tailor made solution.

Oneof the most significant problems that small firms in the inner citiesof USA face is low financial muscle, this means small businessescannot afford some of the cutting-edge technology they need to gain acompetitive advantage since they cannot afford them. Another problemis the lack of physical space as inner city office space is bothcostly and crowded. Another issue facing small inner city firms isthe lack of specialized technical human resource to operate complexinformation systems (Rittinghouse and Ransome, 2016).

Anaccounting information system is a tool for collecting, processingand then storing the required financial information. An accountinginformation system is an integral part of any responsibleorganization. An accounting information system has six majorcomponents the people, who are the human resource, the securitymeasure, and other control features. There is Data and informationutilized by the Accounting system, the procedures and internalinstructions, the software and the hardware including physicaloperations. The functions of an accounting information system includecollecting and storing all financial data of an organizationincluding transactions and cash flow efficiently. An additionalfunction of an accounting information system is to process the datacollected and provide information where and when required in decisionmaking. Another function is to ensure control measures are in placefor the collection and storage of company data (Rittinghouse andRansome, 2016).

Cloudcomputing is a modern and innovative computing concept that has thepotential to improve information systems and resources significantly.Cloud computing works by networking multiple servers on the internetand pooling the group resources to process data this leads to animproved ability to provide information services, aggregate, andmanage computing resources remotely. Cloud computing has an evolvingnature and takes on many forms and practice, many definitions ofcloud computing also exist as a result of its contemporary character(Duncan et al., 2016).

Cloud Computing For Accounting Information Systems

Cloudcomputing is significantly more efficient that other networkingtechnologies. Cloud computing allows businesses to access informationtechnology services in a more flexible manner compared to in-housetechnologies. Cloud computing is also cost-friendly and provides morefor less compared to other platforms that can be used to implement anaccounting information system. The very nature of cloud computing ispooling of resources from all connected servers. The pooled resourcescan be accessed from any point in the cloud this means that cloudcomputing can provide its users with a virtually unlimited amount ofcomputing resources without prior notice. The ability to access thisresources anytime allows the users to make changes at the very momentthe change is required this also relieves users from having topredict beforehand the time they might require the resources and whatamount of resources they might require. This is especially efficientfor company`s whose resource usage fluctuates over time. Projectsthat were previously thought of as consuming too many computerresources can now be performed with ease using cloud computing. Sincecloud computing utilizes multiple servers all over the globe, aresource-intensive task can be distributed among the servers andcompleted faster than ever before (Christauskas&ampMiseviciene,2012).

Informationtechnology equipment is expensive and also a high-risk investment.Cloud computing saves the users from having to purchase and set uptechnology hardware. Cloud computing requires practically zerosystems set up, all the resources are on the cloud. Therefore ithelps small inner city businesses in some ways. First, the businessesdo not have to rent out a larger space to accommodate IT equipment ascloud computing requires no additional equipment. Cloud computingalso assists small inner city businesses regarding the cost of movingas they will have the fewer equipment and all the data can beaccessed from anywhere since all that is required is an internetconnection (Erl, et.al, 2013). The cloud computing framework allowssmall inner city firms to acquire and make use of the most advancedforms of technology similar to the blue chip companies that have vastfinancial reserves. Small inner city businesses that would previouslyhave to purchase IT hardware at a cost and then have to hire aqualified human resource to operate the equipment. With cloudcomputing, small companies do not require to hire specializedtechnical human resource as all the technical processes are performedover the cloud. Therefore, this means the firm will save on trainingstaff to operate the new system and save recurrent expense that wouldbe paid to the technical human resource (Rittinghouse and Ransome,2016).

Risks Involved With Cloud Computing

Cloudcomputing is full of advantages but like any other form of technologyhas several risks and uncertainties associated with it. In cloudcomputing data and the information is stored on a remote server onthe internet and not on-site like traditional information systems.This alone can cause anxiety among users on matters of security andprivacy of user data as they have to relinquish their solid grip ontheir data. The lack of physical control over data is the factor thatbrings concerns into cloud computing (Erl, et.al, 2013).

Thevery nature of accounting information systems is that they handlesensitive data on finance and accounting, therefore this puts thesecurity of cloud computing under considerable scrutiny as delicateand confidential information is supposed to be stored on a remoteserver on the internet. Users cannot improve or supervise theimplementation of security controls in cloud computing. Users justhave to trust the service provider to implement all security checksand thwart any hacking or intrusion attempt. Privacy is the othermajor concern for cloud computing. All the company`s financial andaccounting data being on a remote server (Rittinghouse and Ransome,2016). The service providers have privileged access and if theservice providers made copies or obtained the data users would neverknow, this raises concerns over privacy matters for any company usingcloud computing. Security concerns are a technical issue and can beresolved using technology, but privacy concerns are a matter ofethics and social integrity. Reliability is another major concernwith cloud computing. The problem of reliability comes up since allthe resources are based on the cloud. If the service provider failsfor any reason whatsoever, the organization will make a loss as theyare unable to access any of the data stored in the cloud and are alsounable to conduct any operation that is tied to the informationsystem or the data stored in the cloud. Therefore, this means thatthe organization will make losses for the time the service provideris offline or suffering from any problem that limits their servicedelivery (Christauskas&ampMiseviciene, 2012).

Conclusion

Thecase study has provided an explanation of what cloud computing is andhow it applies to the implementation of an Accounting informationsystem. The study has revealed that cloud computing can exist indifferent modes and implementations both with the purpose of poolingresources and utilizing this resources to the maximum. The studyconcludes that cloud computing has many advantages especially for thesmall firms in the inner city. Cloud computing reduces the cost ofinformation technology services for small companies. Cloud computingalso reduces the IT equipment required to implement an accountinginformation system and also reduces the human resource needed. Cloudcomputing, however, faces some challenges the major ones beingprivacy and security concerns. This paper concludes that cloudcomputing is a viable and feasible technology especially for smallfirms in the inner cities. Cloud computing, however, has to beimplemented with caution and after conducting research so as tocontact the most reliable cloud computing service.

Aprofessional cloud computing service provider needs to create asystem that supports different activities in businesses. A cloudcomputing system will also need professional service management.Management ensures that the customers get the services they requireand have subscribed for at the right time and in the right form. Acloud provider also needs to have a resource management program whichwill help meet the client’s demands. It is important to beefficient and maximize performance in the system controlling thecloud. The cloud network needs to be reliable, available and secureso as to ensure that businesses in the inner cities can have enoughtrust in the cloud system.

Reference

Christauskas, C. &ampMiseviciene, R. (2012).Cloud–Computing BasedAccounting for Small to Medium Sized Business.Engineering Economics,23(1).

Erl, T., Puttini, R., &amp Mahmood, Z. (2013).Cloud computing:concepts, technology, &amp architecture.Pearson Education.

Rittinghouse, J. W., &ampRansome, J. F. (2016).Cloud computing:implementation, management, and security.CRC Press.

Duncan, B., &amp Whittington, M.(2016). Enhancing Cloud Security and Privacy: The Cloud AuditProblem.&nbspCLOUDCOMPUTING 2016, 131.