Improving Accounting Systems: Traditional Accounting vs Accounting Software

This article discusses the differences between traditional accounting and accounting software, available options and software, their strengths and weaknesses, and the cost of implementation. It also explores the role of technology in accounting and internal control failures.

BUACC5937: Information
Systems Design and
Development for Accountants
Group Assignment

TABLE OF CONTENTS
Task 1...............................................................................................................................................3
Traditional accounting.................................................................................................................3
Available options.........................................................................................................................3
Available accounting software....................................................................................................3
Strength and Weakness of implementing accounting software...................................................4
Cost of implementing accounting software.................................................................................4
Difference between accounting software and traditional accounting..........................................5
Computer based programs to substitute Accounting software....................................................5
Task 2...............................................................................................................................................5
Task 3...............................................................................................................................................6
References........................................................................................................................................8

TASK 1
Traditional accounting
Traditional accounting is a process wherein all aspects are done manually, and the transactions
are recorded paper-based and stored in wide binders. Although, traditional accounting is
relatively inexpensive and does not require machinery and technology, and also there is a higher
need for skilled personnel to do the same. The weakness of accounting done on a traditional
basis are inclusive of decreased speed, increased labour effort, comparatively low internal
reporting., delayed payments, untimely payments of overdue (Victoria ,2017). The traditional
accounting is very complex to consider the keep the reporting requirements and not suitable as
there is a requirement of timely information in regards to pricing and costing.
Available options
By considering the case scenario and issues of traditional costing, various options can be placed
to cope up with the situation and match the pace of requirements. The Walton Brothers have
initially required to make reduction in the manual labour work and must consider automation that
is best applicable in their filed. They can include a process such as Excel; even this step can save
their several working hours. This automation solution and integration of digital and
computerized tools can help them in improvising their speed and validity by automating the
routine transactional process (Kumaran, 2015). The automation can be considered though
leveraging a mixture of data standardization of procedures, rooted internal controls, and actual
reporting as well as dashboards, by this the Walton Brothers can be able to monitor the
performance an ensure process optimization. The automation software can also test the data, and
contrast the real-time results and produce comprehensive reports, a framework for the
automation process is inclusive of; data-driven, modular, hybrid testing framework etc. In
addition, the Walton Brothers can integrate Robotic process automation, to decrease their manual
process and complex labour intensive work, it acts as virtual personnel and substitutive repetitive
actions and adds reliability in reports.
Available accounting software
The best possible accounting software recommended to the Walton Group are; Sage Group and
Xero accounting software. The Sage Group offers a variety of business requirements inclusive of
accounting, HR, proper management of tax, income and expense which solves the issue of the

current situation that is increasing business revenue leading to increasing in many expenses and
other costs (Needleman, 2018). The Xero Review solves the current situation by easing the
payments and invoices; it also allows bank reconciliation and data automation, it is facilitative
booking software, which is the requirement of the present case. Thus, both the accounting
software well matches the requirements of the firm and will help them in improving their
accounting systems.
Strength and Weakness of implementing accounting software
The Sage Group
Strength
 Time-effectiveness and manual
process reduction
 Easy bookkeeping process
 Strong Data entry characteristics
Weakness
 Challenging installation
 Additional prices for the update
The Xero Review
Strength
 Enables Banks to record transactions
automatically
 Accessible interface to bank
reconciliation (Sage 300 ERP, 2018).
 Effective data integrity and reporting
 Financial analysis and better
management of cash flow
 Cost effective data entry
Weakness
 Challenging reporting module
 Limited global search
 Restricted reports and payrolls

Cost of implementing accounting software
The cost of implementing Xero is based on 5 subscription plans wherein the price of the same
is $9 per month, whereas the price of the Standard plan is $30 per month and the premium plan
cost varies from $70-$180 per month based on the people present on company's payroll. On the
other hand, the cost of implementing the SAGE accounting software varies from $150 to $2,500
based on the plan and requirement of the user (Sage 300 ERP, 2018).
Difference between accounting software and traditional accounting
Using an accounting software is way different from making use of the current traditional
accounting tools in the present case, the difference comes in the form of speed, accuracy, costs,
backups, costs and considerations (Simkin, Norman & Rose, 2014) . Traditional accounting is
generally stored in binders and carried out manually, while the accounting software conducts
their work on remote servers. Another difference is cost, the accounting software demands
periodic costs, whereas the traditional accounting requires in-house and workforce costs.
Computer-based programs to substitute Accounting software
A substitute of accounting software can be FINSYNC; it provides robust characteristics, and also
users are not required to purchase a load of additional for their software. However, the software
lacks the support for tax and payroll. The FINSYNC is good at providing customer services, and
have a unique and impresisve feature such as invoicing, estimates, orders, expenditure tracking,
inventory, bank reconciliation, budgeting, sales tax and charts of accounts (Krause, 2017). This
program has various features, skilled accounting, built payroll and more user amount. The
program is easier to use, and the cost of this plan is categorized into three business plan varying
from $35 to $65. FINSYNC can be a dial for the present case and so as to gain sound financial
systems.
TASK 2
The role of technology has been increased, as it has improvised the ability and performance of
accountant to understand data and statistical values in an effective manner. The emergence of
technology and its major role have evolved the entire profession of accounting, and it is believed
that the accessibility provided by technology to new software has facilitated the job of
accountants. Technology has provided various benefits to accountants namely; instant access,
software updates and advancements, mobility, better bank accessibility and easier signing and

scanning of documents (Susskind & Susskind, 2015). Along with this, with the help of expert
accounting software and advanced technologies, it is considered that the evolution of technology
has remarkably improvised accuracy and accounting field while has decreased the error margin.
Thus, the technology has played a great role in the daily practices of accounting and has taken
the entire profession to a new level with the potential for better opportunities.
The use of an information system helps in increasing speed as well as accuracy; however, the
entire human error cannot be reduced as there is some scope in every situation. If the information
is not accurately recorded, then the system might not be able to solve it. Errors take place in
accounting and for this internal supervision and better information systems are required to avoid
or detect them (Moray, 2018). Further, a computerized system must possess secured access to
reduce the changes of unauthorized use, and accountants are also required to review and ensure
that the information is accurate. At present accountants have ineffectiveness of paper-based
tracing by the implementation of information system and technology, with the optimal process
and framework, the data accountability is created, and the possibility of errors is reduced
(Dekker, 2017).
At present, professionals are less focusing on paper-based accounting and are accepting the
technology work environment to satisfy the demands of the client. There are various advantages
of going paperless, which is inclusive of time and cost-effectiveness, securing accounting firms
and clients while streamlining the practices of the accounting. In addition, higher importance is
given towards eliminating the aspect of paper so as to keep up with the technological and digital
emergence and save time and costs. Further, this trend is earning momentum and is continued, as
it makes the accounting firm more reliable and effective in terms of providing related accounting
services to clients (Karlsen & Wallberg, 2017). The paperless work process adds more of
productivity, efficiency and profitability when it comes to accounting, and the most obvious
benefit of paperless investment is that there are various ways to quantify the return on
investment, with the implementation of digital work and tools, now firms are eliminating the
invoice processing time and fees, as well as taking full benefit of foreman pay discounts
simultaneously.

TASK 3
The failure of internal control takes place if the auditor does not comply with the fundamental
principles or does not conduct the crucial process as per the International Standards on Auditing.
Internal control failures take place when there is a severe distortion of the financial data which is
not stated in the audit reports and has made harsh errors and faults in conducting the auditing.
The auditors can be overly influenced by possessing direct or indirect financial interest in the
client (Knechel & Salterio, 2016). The factors that led to internal control failure are also
inclusive of weak judgments held in decision making, and those decisions which are based on the
inaccurate provision, information or by unprofessional personnel also internal control failure is
also held by human error, yet an effectively developed internal control work scenario can
mitigate this to some extent. The failure of Enron is also the example of the biggest bankruptcy
of world and is related with the audit failures wherein the audit firm formed corporate structures,
financial transactions, various subsidiaries and also the internal audit and auditing regulators
were spoiled to check the failures and the firm tore a range of reliable digital and paper-based
document (Alles, 2015). The situation has turned out to be a common thing in the accounting
world, it has been believed that even big company face such collapse and receive a non-qualified
audit report and thereby fail with the aspect that the financial statements are abhorrently
misstated, For example, Toshiba is said to be the first one to adopt the reforms of corporate
governance which satisfy the corporate governance standards. Further, the case of Toshiba
evidenced that a mere corporate governance structure does not necessarily result in well
corporate governance and can eventually lead to corporate governance failure. The internal audit
fault in Toshiba was that it was highly focused on services related to consultation instead of
services related to assurance (Bhattacharyya, 2015). The non-effectiveness of financial
operations, non-validity of financial reporting, and non-adherence to suitable laws and standards
are the aspects that can cause an audit and internal control failures.
By considering this aspect, it can be cited that the audit failures can be mitigated, when the
auditors follow the applicable GAAS and GAAP and maintain the validity and reliability of the
financial reports and statements. For properly and effectively managing the financial operations,
the audit firms are required to identify the operational levels, financial and adherence risks that
are expected to be assumed (Bell, Causholli & Knechel, 2015). In addition, optimal control

activities must be included, such as approvals, verifications, performance review, security, duty
delegation, information system control and authorization to prevent such failures.

REFERENCES
Alles, M. G. (2015). Drivers of the Use and Facilitators and Obstacles of the Evolution of Big
Data by the Audit Profession. Accounting Horizons, 29(2), 439-449.
Bell, T. B., Causholli, M., & Knechel, W. R. (2015). Audit firm tenure, non‐audit services, and
internal assessments of audit quality. Journal of Accounting Research, 53(3), 461-509.
Dekker, S. (2017). The field guide to understanding'human error'. CRC Press.
Karlsen, A. C., & Wallberg, M. (2017). The effects of digitalization on auditors’ tools and
working methods: A study of the audit profession. Sage.
Knechel, W. R., & Salterio, S. E. (2016). Auditing: Assurance and risk. Routledge.
Moray, N. (2018). Error reduction as a systems problem. In Human error (pp. 67-91). CRC
Press.
Simkin, M. G., Norman, C. S., & Rose, J. M. (2014). Core concepts of accounting information
systems. John Wiley & Sons.
Susskind, R. E., & Susskind, D. (2015). The future of the professions: How technology will
transform the work of human experts. Oxford University Press, USA.
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Krause, C., (2017). FINSYNC Review. Retrieved from
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finance-accounting-department-efficiency/>.

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