Role of Accountants in Computer Acquisition Process and Risks of Offshore Outsourcing of Information Systems

This article discusses the role of accountants in the computer acquisition process and the risks associated with offshore outsourcing of information systems. It also addresses the organizational issues that the management at Queensland’s Bedrooms Furniture should address.

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Accounting Information Systems
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Accounting Information Systems
Question 1
a) The role of an accountant in the computer acquisition process
Computer acquisition process refers to the section, purchase and implementation of computer
hardware and software into a system. The process is important because it ensures that the
right computer has been chosen to execute a required objective. Accountants are critical
players in the acquisition and implementation of accounting information system and
management information system. Therefore, they play an active role in the computer
acquisition process as a user, designer, implementer, and an auditor (IFAC, 2007, p. 67).
As a designer, an accountant is considered to be the most equipped and suitable professional
in the accounting department to design a system, such as Accounting Information System
(AIS), that would be installed in a computer. Some computer models might be incompatible
with given systems. As a designer of the system, accountants play an important role in the
acquisition process (Hall, 2015).
As an implementer, an accountant has the responsibility to ensure that the system is
performing as required. To avoid, implementation problem, a computer should have the
required storage and speed (processor) to accommodate the system.
As an auditor/ internal controller, an accountant must ensure that organizational data that has
been stored in a computer is protected from intruders. Therefore, an acquired computer
should have the required protection and security features (Bennetts, et al., 2000, pp. 231-
242).

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As a user, accountants are the first-hand users of the information retrieved from computers.
The ease and efficiency of attaining information from a computer are important factors when
making a purchase. Accountants are in a better position to provide useful advice.
Lastly, an accountant can advise the acquisition team in the available budget as well as cost
estimation of the required computer models (Gelinas & Gogan, 2006, pp. 93-116).
b) The useful contribution an accountant might make in the computer acquisition
process
An accountant's contribution during a computer acquisition process is based on the economic/
financial, technical, operational and contractual aspect.
 Economic/ Financial information: Accountant offers cost-benefit analysis associated with
different computer models. The justification process involves a breakdown of all the
costs involved in the acquisition process. Such information is important because it
ensures that budget limit has not been exceeded. Likewise, financial information from
accountants helps to improve resource utilization as well as increase efficiency (Mancini
& Dameri, 2013).
 Technical information: An accountant can help an organisation to determine the
technical aspect of the acquisition. Technical advice from an accountant help in
determining whether an organisation has the right resources and infrastructure to support
the acquired computers. Therefore, by providing technical information, accountants help
to ascertain the reliability of the computers to support future activities of an organisation
(Turner, 2008, p. 43).
 Operational information: When the computers are meant to facilitate accounting and
management activities, then an accountant because of a user, a designer, an implementer
and internal controller of AIS. Therefore, an accountant can offer information on the

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required organisational changes to accommodate the computers. Changes might be
concerning management style and personnel. The changes come with an additional
expenditure and accountant should ensure that such costs are sustainable (Schwalbe,
2015, p. 66).
 Contractual information: When an organisation is planning a significant acquisition of
computer, entering into an agreement with the supplier is important. Therefore, an
accountant would guide the organisation into creating a contract that is beneficial for the
two parties.
Therefore, accountants should be actively involved in the computer acquisition process.
Accountant performs their roles best when there is part of a team comprising of managers,
system analysts, computer experts and human resource management.
Question 2: What risks, if any, does offshore outsourcing of various information systems
functions systems functions pose to satisfying the principles of confidentiality and privacy?
Organisations turn to outsource services from home or foreign companies to improve
operational efficiencies and cost saving. While some companies give total control to the
offshore service providers, others retain of their staff, information processes and
infrastructure. Either way, companies should put in place an effective risk management
method to safeguard their information asset while adhering to the laws or regulations that
govern outsourcing practice (Romney, 2018).
Offshore outsourcing is associated with several risks which might affect availability,
confidentiality and integrity of information assets. It is the responsibility of an organisation to
ensure that its staff, technology and processes are appropriately managed. The risks
associated with offshore outsourcing include:

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a) Country risk: The risk is associated with the political landscape, cultural factors, and
socioeconomic factors that affect the ability of a vendor in a foreign country to fulfil
contractual obligations. This risk can lead to the breach of data privacy. For instance, an
outsourcing vendor handling sensitive information for a financial institution is likely to
use such information for fund diversion. For example, with bank accounts and other
required documents, vendors can easily access unauthorized loans by the parent
company. Lastly, organized crime groups in the foreign country can attempt to gain
access to the information by either; a) buying the outsourcing vendor, and b) bribe
employees at the vending company to access private and confidential data (Gelinas &
Sutton, 2012).
b) Reputation risk: An organisation is likely to suffer from negative publicity associated
with the outsourcing vendor. Poor services, violation of consumer laws, and service
disruptions amount to reputation risks.
c) Operational risk: The risk is associated with product or service delivery. A company
is likely to suffer from operational risk without an adequate contingency plan.
d) Compliance risk: This risk arises when an outsourcing vendor has violated the
existing rules, laws, internal policies, ethical standards and industrial regulations.
e) Strategic risk: There are situations when the goals of an organisation and that of the
outsourcing vendor are not aligned. A company suffers a strategic risk when a vendor is
more interested in financial benefits than enhancing its goals (Quinn & Strauss, 2017, p.
70).
f) Credit risks: A company is likely to suffer from credit/ financial loss if; a) a vendor
fails to perform the agreed roles and responsibilities; b) a vendor breaches the contract
entered with the company, and c) if the vendor goes bankrupt.

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g) Security risk: The risk is likely to arise from different scenarios. First, inappropriate
disclosure or access to data and information. Second, data integrity can be lost through
inadequate physical security at the facility, lack of disaster recovery plan, terrorist uses,
fraud attempts, and extortion.
The first step towards effective risk management is the identification of such risks. After risk
identification, an organisation then develops an effective risk mitigation plan which
comprises of the staff, information processes and infrastructure and required products and
services (Tonkin & Mula, 2012, p. 57).
Question 3:
a) Organisation issues that the management at Queensland’s Bedrooms Furniture should
address
Several issues contributed to the failure of the Accounting Information System (AIS) at QBF.
First, there was poor communication between the company and the external system
developer. The company was not represented in the development of the system. As the
primary users of the system, the company's representatives would have been in a better
position to present the organisational needs to the developers. However, the company simply
communicated its requirements to the developer with hopes that the system would meet the
specific requirements. Therefore, the company should develop a clear communication
strategy with the system developer (Doost, et al., 2011, p. 61).
Second, both the company and the system developer lacked a clear vision of the required
AIS. Before developing the AIS, the company should answer the questions of why, how,
when, and where. There is no need of developing AIS without establishing the problems that
the system is expected to solve. Likewise, the company should develop a plan for how and

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when the system will be implemented. Lastly, the company should evaluate the capability of
the end users to execute established functions. Without a clear vision and planning, the new
system would fail again (Doost, et al., 2011, pp. 62-70).
Third, the company failed to protect the original design of the system from modification. By
replacing the original design, the system could no longer serve the intended initially goals.
The management of QBF should ensure that changes proposed are used only to improve its
performance.
Fourth, the project was too large and complex for the consulting firm to accomplish. From
the case study, the consulting firm did not have the required experience to execute such a
complex objective. Failure of the consulting firm resulted in both time and financial loss for
QBF. The management should have conducted thorough research and interviews to identify
a consulting firm that could have executed the job efficiently and effectively (Khosrow-Pour,
2001, p. 96).
Fifth, QBF did not have qualified staff to assist in the development and implementation of the
AIS. Without a strong support staff, even a capable system cannot serve its purpose. A
system cannot operate on its own: It acts on the command of the end users.
Lastly, the system was too dynamic to support the quick processing of the invoice. The
management should ensure that the initial system is kept simple and improvement/
modification should be done as time progress upon successful implementation of the previous
stages (Fontinelle, 2018).
b) Recommendations for guaranteeing quality of consulting service
Based on the abovementioned organisational issues, the management at QBF should consider
the following recommendations;

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First, QBF should establish a project team with representatives from all of its departments
and branches. The team should then collaborate consulting firm during the development,
testing and implantation of the new system. A formal communication channel between QBF
and the consulting company should be established. The project team should meet with the
consulting firm ones every month to discuss the progress of the project.
Second, the company should develop a clear vision by answering the why, how, when and
where questions before embarking on the development of the system.
Third, the company should develop a clear prototype and protect it from unnecessary
modification. The system is likely to lose its original identity and objectives.
Fourth, the management should ensure that the simple and can easily be understood by the
end users (QBF employees). Considering that most employees are not Information system
experts, it would be hard for them to understand a complex system.
Sixth, the company should develop a strong support staff. The first system failed because of
the lack of well-trained staff. The project team should be used to train QBF employees of the
use of AIS.

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References
Bennetts, P. D., Mills, S. & Wood-Harper, T., 2000. Role-Play in Inquiring Systems and
Information Systems Development. Systems Research and Behavioural Science, pp. 17, 231-
242.
Doost, R., McCombs, G. & Sharifi, M., 2011. The State of Teaching Accounting Information
Systems: Is There a Gap?. Review of Business information Systems, pp. (7)3, pp. 61-70.
Fontinelle, A., 2018. Introduction To Accounting Information Systems, Washington:
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Gelinas, U. & Gogan, J. L., 2006. Accountants and Emerging Technologies: A Case Study at
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