To: Anthony Bucaro From: Siyao Liu, Shuyuang Yan, Lu

To:
Anthony Bucaro

From:
Siyao Liu, Shuyuang Yan, Lu Chen

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January 29, 2018

Subject: Brief Discussion on Cloud Accounting

Cloud
computing enables
convenient, on-demand network access to
a shared pool of configurable computing resources that can be rapidly
provisioned and released with minimal management effort or service
provider interaction (Hall).
Cloud computing seems to be a
professional conception in the field of computer science, but actually it can
be combined with several subjects, for example, cloud computing in
collaboration with the traffic leads to transportation monitor, which reacts to
emergency any time; cloud computing could also be combined with the catering,
various take-out software is based on technology of cloud computing1.
Unsurprisingly, combined with accounting, cloud solutions also lead to a new
business reality, cloud accounting.

This is not the first time that computer
technology reached the accounting domain. Generally, accounting software is a
product that installed and maintained periodically2.
In addition to the software purchase, corporations should also buy services for
installation and maintenance because those actions only could be finished artificially.
As for traditional accounting software, there are many problems which will
affect the company’s management and the operating performance will vary. For
example, the data in the system isn’t up to date and data bounces from place to
place and not anyone has the access authority. In addition, this non-smart
system usually requires high costs and complicated subsystem to keep backups.
Therefore, the cloud accounting emerges at the right moment.  

What makes cloud accounting different from
traditional accounting software is cloud accounting provides an access to an
online accounting system. In addition to accessing the accounting data via the
internet, cloud accounting allows users access accounting system by internet
without any other actions like installing. Cloud accounting solutions are
transforming the way that accounting applications are used.

There are several quite important
advantages of cloud accounting. Firstly, the cloud accounting can improve the
accuracy of accounting. The traditional accounting system is not only tedious
but also prone to errors risks, while cloud accounting more depends on
automation without any human interventions. So, if there are some frauds or
discrepancies, this system will detect more effectively, thus improving the
accuracy and efficiency of accounting management. Secondly, compared with the
traditional accounting system, cloud accounting has the ease of access, which
means employees will have access authority to financial data anytime anywhere.
They even can use smartphones and other handheld devices to log in, view and
edit all data rather than downloading or copying by the USB drive. 3Thirdly,
the cloud accounting usually keeps the information up to date, because of the
application of sharing information. For example, if your cooperative partners
record their data online, you can log in and get the first-hand data in time
which can help you to respond to business change by giving you financial
information at your fingertips. Finally, the cloud accounting is highly
cost-effective. Everything is done online, which means you do not need to
install anything. The system will update regularly and automatically and your
cloud service provider will help you manage or maintain the whole system. You
do not spend your time and extra fee on safeguarding this system.

However, nothing is perfect.4
The cloud accounting also produces some risks. Firstly, the operation of cloud
accounting depends on the internet connection and any operation requires the
internet connection. If there is no internet, you cannot have access to your
accounting data. So, there are some restrictions on the application. Secondly,
the data in cloud accounting software live on the internet which cannot
guarantee the security, such as network virus and hacker. Someone can gain
access to your data through illegal methods. So, there certainly exists the
risk of information leakage.

With the development of information
technology, the cloud accounting will be the next major paradigm shift in the
world of accounting. The rise of cloud accounting has put accountants at the
forefront of a new range of technologies and encourage them to learn more fresh
skills. Firstly, we need have a better understanding of the cloud technology
which can help us are able to negotiate service-level agreements with cloud
providers and read the fine print in contracts. If the system goes down or is
underperforming, you can describe these problems accurately to your service
providers.

Secondly, the application of cloud
accounting release accountants from many traditional assignments, such as
bookkeeping or information collection. The focus of accounting work has turned
to be data analysis. Accountants need to do deep analysis by using this
real-time information to forecast or evaluate the operation of companies. So,
the analytical ability is increasingly significant5.
Finally, you should be familiar with related laws. In the past, as an
accountant, you may understand some economic laws, but now you should learn
more about some data handling laws in order to proper utilization of cloud
technology.

Obviously, advantages of cloud accounting
far outweigh its disadvantages. Besides, as the cloud accounting perfectly
matches demand of high efficiency, low cost and other benefits, it will get
more and more popular and collaborate all business participants by up-to-date
solution.

 

 

Bibliography

Accountants, Jonathan Vomles Chartered. The
advantages and disadvantages of cloud computing. 23 4 2013.
http://www.jvca.co.uk/our-services/bookkeeping-services/computerised-accounting/advantages-disadvantages-cloud-computing.
Deming, Zach. 6 Skills Accountants Need To Become
Exceptional. 26 07 2017.
http://www.digitalistmag.com/finance/2017/07/26/6-skills-accountants-need-to-become-exceptional-05235787,
.
Dimitriu, Otilia. “Cloud accounting: a new business
model in a challenging context.” Emerging Markets Queries in Finance
and Business (2015): 665-671.
Hall, James A. Information Technology Auditing.
Boston: Cengage Learning, 2016.
Macquarrie, Barry. Are Cloud Accounting Applications
Right for You and Your Clients? 25 10 2013. https://www.firmofthefuture.com/content/cloud-computing-benefits-and-risks-of-cloud-accounting/,
10/25/2013 . 01/27/2018.
P?curari, Doina. “SOME CONSIDERATIONS ON CLOUD
ACCOUNTING.” Studies and Scientific Researches (2013).
 

 

1
(P?curari)

2
(Dimitriu)

3 (Macquarrie)

4
(Accountants)

5 (Deming)