Benefits of Accounting Software for Financial Reporting and Risk Management

This article discusses the benefits of accounting software for financial reporting and risk management. It covers the issues and risks faced by management accountants, and how accounting software can assist in solving them. The article also includes a literature review of various studies that support the use of accounting software for financial reporting and risk management.

Accounting

Table of Contents
1. Development of accounting research problem............................................................................3
2. Literature Review.........................................................................................................................3
REFERENCES................................................................................................................................1

1. Development of accounting research problem
The objective and purpose of the financial reporting is to track, analyse and report the
business income and expenses. While preparing the financial reports, there are basically four
issues and risk that management accountant of the company faces and need to be solved such as
financial risk, credit risk, currency exchange risk and working capital risk. This problem is
solved only if the management of the company will adopt and implement accounting software
because identifying and analysing all this risk manually is near to impossible (Bonsón and
Bednárová, 2019). This risk is easily solved with the implication of accounting software as it
assist in financial reporting along with the increased in efficiency and accuracy, synchronized
and secured data, automated record keeping and simplified tax compliance.
2. Literature Review
As per the views of Le and Cao (2020), the management can prepare optimized financial
reports with the help of accounting software and remove some issues such as defaulting of loan,
debt load or delay in delivery of goods which get solve by adopting accounting software. For this
software helps in importing market data and convert in useful information. The diversification
techniques provided by accounting software helps in reducing the financial risk. The instant
generation of fund flow statement through accounting software give key insights like current
assets and liabilities for a month, quarter and year. It basically syncs all the data quickly which is
not possible manually.
The Frimpong, Yawson and Akomeah (2021), stated that management can also able to
increase efficiency and accuracy of financial reports and remove issues such as poor or
negative cash flow from operations, increase in interest rates etc. The accounting software helps
in identifying this risk, measuring the loss due to risk and creating provision for the same in
advance. It is because accounting software increases the efficiency and accuracy of the financial
report. his also help in keeping the management up-to-date reading the economic condition of the
country in order to analyse the new interest rate. The software also provide the cloud to store the
irrelevant data for future use.
As per the opinion of Mitran (2020), the accounting software helps the management more
if the company deals at international level by synchronized and secure data. The risk arises
when company is not able to settle its bank liabilities, supplier and other creditors. Liquidity and

efficiency is risk involve in working capital which get solve by implementation of working
capital. The accounting software helps in identifying the credit worthiness of the customers and
potential borrowers in order to solve the poor cash flow from operations issue. It is only possible
because software along with the report preparation keep the used and unused data securely. T
As stated by Putra (2019), the accounting software also provide the benefits to the
company such as automated report keeping and simplified tax compliances. The increase in
the foreign exchange rates affects the buying party while decrease in exchange rates affect the
seller party. So, to solve this issue accounting software provide tools to calculate forward rate
and also enter into forward contract. The software correct the errors with the use of accounting
tools and functions. The software also helpful in reports in automated and calculation of tax and
exchange rate over software is simple.

REFERENCES
Books and journals
Bonsón, E. and Bednárová, M., 2019. Blockchain and its implications for accounting and
auditing. Meditari Accountancy Research.
Le, O. and Cao, Q., 2020. Examining the technology acceptance model using cloud-based
accounting software of Vietnamese enterprises. Management Science Letters. 10(12).
pp.2781-2788.
Frimpong, K. A., Yawson, I. K. and Akomeah, E. A., 2021. Computerized accounting in Ghana:
The shift from books to software: The benefits and challenges associated with the
transition.
Mitran, D., 2020. Risks And Benefits Of Adopting Cloud Accounting. Internal Auditing & Risk
Management. 60(4). pp.22-32.
Putra, Y. M., 2019. Analysis of Factors Affecting the Interests of SMEs Using Accounting
Applications. Journal of Economics and Business. 2(3). pp.818-826.
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