Accounting Information System: Entrepreneurial Business and Finance

This assignment examines the role of an entrepreneur in a business, emphasizing decision-making, risk assessment, and the importance of external relationships. It analyzes key decisions, including launching, developing, and potentially retiring from a business, specifically in the context of a 3D scanning application. The assessment explores information exchange with external parties, such as potential business partners and suppliers, and the impact of these exchanges on business success. Furthermore, it details the various sources of external finance available to entrepreneurs, including equity share capital, debentures, term loans, and venture capital, highlighting the advantages and considerations of each. The assignment also addresses security, legal, and ethical issues related to software applications within the accounting information system. This detailed analysis provides a comprehensive overview of the financial and operational aspects crucial for entrepreneurial success.

Running head: ACCOUNTING INFORMATION SYSTEM
Accounting Information System
Name of the Student:
Name of the University:
Author’s Note:

1
ACCOUNTING INFORMATION SYSTEM
Executive Summary
The main purpose of the assessment is to analyse the role which is performed by an entrepreneur
in the business. The entrepreneur can change the structure of the business by following an
appropriate form revenue. The entrepreneur also needs to focus on building relations with
external parties which can support the needs of the business. In addition to this, the discussion
also shows the different sources of financing options which is available to the entrepreneur for
starting the business.
Student ID no: Course Code:

2
ACCOUNTING INFORMATION SYSTEM
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Role of Entrepreneur in a Business.............................................................................................3
Exchange of Information with External Parties...........................................................................4
Sources of External Finance........................................................................................................5
Security, Legal and Ethical Issues...............................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8
Student ID no: Course Code:

3
ACCOUNTING INFORMATION SYSTEM
Introduction
The main purpose of the assessment is to analyze the role of a successful entrepreneur in
a business and also discuss the key discussions which the entrepreneur is required to take in
order to make business successful. The assessment also considers that a business which is
looking to expand its operations need have proper contacts with external parties so that
information can be exchanged between them. In addition to this, the focus would be on funding
requirements of a business and how the management takes decisive action in order to organize
the required fund for the business (Veit et al. 22014). The assessment would also be reflecting on
the fact how use and application of a software can create legal, ethical and security issues for a
company. The analysis which would be conducted in the assessment is related to the major
functions which an entrepreneur need to perform in order to achieve the goals of the business and
also further develop the business.
As per the case which is provided in the assessment, the business which is to be started is
regarding 3D scanning application which is anticipated to make a lot of money. The initial
capital requirements of the business are met by a prize money which is received in a local
software competition. All the requirements of the business such financing, external party contact,
security and legal issues would be considered in this assessment.
Discussion
Role of Entrepreneur in a Business
The entrepreneur has a very role to play in a business as he is responsible for making
major plans for the business and also takes all the risks which is associated with a business. The
entrepreneur needs to direct the business forward and with right approach of leadership ensure
that the business is able to reach its goals (Kumar and Rao 2015). The role of an entrepreneur is
to lead the business into success and take major decisions for the business (Bourgeois 2014). The
different decisions which are taken by the entrepreneur are taken considering the long-term goals
and objectives of the business. The entrepreneur takes some major decisions and that too at
different stages of a business. Some of the decisions which are taken by an entrepreneur are
discussed below in details:
 The decisions to launch a business is based in an idea which is developed by the
entrepreneur. The entrepreneur frames the idea into a business options considering and
estimating what expenses and income can the business be related with. The launching
point is the point which makes the entrepreneur and it is this point forward that all the
major decisions of the business are taken by the entrepreneur. The new business which is
being started is related to 3D scanning which would involving use of software
applications.
 The next major decision which the entrepreneur needs to take is the turning point
decision which requires the entrepreneur to convert thoughts into actions. This stage
requires the entrepreneur to develop plans or take next step for developing the business to
a new level. This is the stage where the entrepreneur would be deciding the target market
of the business and also select the goals and objectives of the business.
 The next major decision where the entrepreneur needs to take decision is the tipping point
stage. This is the stage where the entrepreneur needs to set up a team of individuals who
can handle the responsibilities of the business. It is in this stage that the entrepreneur
Student ID no: Course Code:

4
ACCOUNTING INFORMATION SYSTEM
needs to assemble a management team and also acquire the necessary capital which the
business would be requiring. The entrepreneur needs to set up a team which comprises of
technicians and skilled staff members who would be able to handle the system.
 The recommendation stage decisions are taken by the entrepreneur when some changes
are required to be made in case of reengineering the business. These decisions are
difficult as it makes the entrepreneur consider where the business needs to be in future.
 The last stage is the letting go stage where the entrepreneur makes decisions for retiring
from the business so that new entrepreneurs can set up and carry on the work.
The above discussion shows that the major decisions which are taken by an entrepreneur can
affect the activities and operations of the business. This shows that appropriate judgement needs
to be taken by the entrepreneur in order to ensure that the business is successful in the market.
The entrepreneur is also the person who takes decisions regarding the capital source which is to
be used by the business and also areas of risks. The entrepreneurs are known to take risks for the
business so as to enhance the profits of the business. The entrepreneurs of the business have the
responsibility of bringing about innovations and technological advancements in a business.
Exchange of Information with External Parties
The entrepreneur needs to develop contacts with the external parties for the purpose of
ensuring that the business is able to survive in the market and earn appropriate revenue from the
business. The business of 3D planning is picking up pace in the market and this the main reason
behind the demand for the same has increased in the market. The entrepreneur needs to build up
contacts with parties for the purpose of entering into tie up agreements with companies for the
purpose of enhancing the sales of the business.
The most requirement for a 3D scanning device is for a mobile company or a camera
business which effectively requires the new technology for staying competitive in the market.
The entrepreneur needs to enter into business contracts with such companies so that the sales of
the product can be enhanced by the management of the company Jansen, Cusumano and
Brinkkemper 2013). The entrepreneur needs to decide what information needs to be exchanged
from the external parties. In case of establishing a deal with another company, the entrepreneur
needs to collect information regarding how much quantity would be required by the business and
on the basis of the same information is to be provided regarding the price at which the sales of
the product can take place. In addition to this, the entrepreneur needs to also set up deals with
suppliers so that materials can be obtained by the business. The entrepreneur needs to take all the
valid decisions of the business. The exchange of information is required in a business so that the
management of the company is able to attract more customers and enhance the revenue of the
business. The information which is available to the entrepreneur can also be used for the purpose
of identifying the market trends and taking major decisions for the business.
Sources of External Finance
It is to be noted that financing requirements in a business forms one of the major
activities which is undertaken by the management of the company. A business need to have
appropriate financing source so that the activities of the business can be effectively financed. The
capital which is used by the business for the purpose of financing the activities of the business
can be internal source of capital or even external source of capital. In common term external
source of capital refers to the capital which is acquired by the business from outside the business.
Student ID no: Course Code:

5
ACCOUNTING INFORMATION SYSTEM
These capitals are popularly used by businesses which are just starting. In addition to this, there
is a further segregation available to the management of the company which is whether they
require capital for short term purposes or long-term purposes.
The business which will be established is related to 3D scanning and software application
and therefore is a new prospect which will be requiring appropriate financial assistance in order
to successfully establish the business in the market. The entrepreneur need to select an
appropriate source of financing so that the business has access to funds. The different sources of
external finance which needs to be considered by the entrepreneur are listed below in details:
 Equity Share Capital: One of the most appropriate source of capital which can be
considered by the entrepreneur (Geho and Frakes 2013). In addition to this, it is also to be
noted that equity capital is one of the most common sources of capital and the same is also
easy to acquire. The equity capital is preferred by most of the businesses because it is not
risky in nature which is the case in debt capital. The business can issue shares by which
appropriate capital can be collected from the market. The shareholders of the business also
become the owners of the business and in return for their capital dividend is paid to the
shareholders of the business.
 Debentures: The debentures are also an alternative source of capital which the entrepreneur
can consider for the purpose of raising capital from the business. The capital which is raised
from an issue of debenture can be referred to as debt capital. It is to be noted that debt is
considered to a cheaper source of capital in comparison to equity and also has tax advantage
if the business uses the same. However, it is to be noted that entrepreneur needs to provide
certain collateral securities in order to get access to lumpsum amount of loan.
 Term Loans: The entrepreneur also has the option of taking term loans for meeting the
obligations of the business and meeting thee financial requirements of the business. The
characteristics of a term loan is very much similar to that of debenture capital. The business
needs to bear the interest expenses for the loan (Finnerty 2013). The nature of such loans is
also long term in nature and are effectively secured by some securities assets.
 Venture Capital: This type of capital is another option which is available to the
entrepreneur. It has the same features as equity capital but the shareholders in such a source
are different set of people who are known as venture capitalist. These capitalists invest
lumpsum amount in a company for establishing a new business. The entrepreneur can
choose this option for acquiring capitals as 3D scanning is a developing prospect and would
most certainly attract the attention of the venture capitalists.
The above sources of finances are the most common sources which is preferred by businesses
for the purpose of financing a business. The entrepreneur needs to issue shares in order to raise
equity capital and in case of debt capital, the entrepreneur needs to apply for a loan from
financial institutions and banks (Qin and Wei 2017). The source of funds which is to be utilized
by the management of the company depends on the nature of the capital structure which the
entrepreneur intends to use. The entrepreneur can choose an all equity capital structure or a all
debt capital structure or even a mixed capital structure which would comprise of both equity and
debt capital sources (Schwienbacher, Baker and Welter 2015). It is to be noted that the selection
of capital structure of a business is related to the riskiness of the activities of the business. As per
the case, the entrepreneur is starting a 3D scanning business which is relatively new in the
Student ID no: Course Code:

6
ACCOUNTING INFORMATION SYSTEM
market and therefore, it would be difficult for the business to increase the revenue of the business
at initial stages.
Security, Legal and Ethical Issues
The entrepreneur is planning to open a 3D scanning business which is closely related to
software programming and therefore the entrepreneur need to take appropriate steps for ensuring
that the information regarding the business and its customers are kept safe at all costs. In most of
the businesses, different types of software and information system are used so that the activities
of the business are supported. In this case, the entrepreneur is forming a scanning business which
comes under the purview of software business and therefore special care needs to be taken by the
management of the company. The entrepreneur needs to consider the following requirements
which must be adhered to before the business can operate in the market.
Security
One of the main issues which affects a software business or a business which is providing
innovative services with the use of software or certain other applications is Cyberthreats. There
is always an issue that valuable information might get hacked and fall into the wrong hands. This
not only affects the business but also all the customers and employee who are associated with the
business. One of the severe consequence of loss of information relating to a client is identity
theft. This is a vital information and can be used for criminal activities as well. Another major
consequence of cyberthreats is that computer viruses can be planted in the system which would
make the system vulnerable. Another major security issue which is associated with software is
the copyright infringement which damages the intangible asset value of the business and thereby
affecting the earning capacity of the business (Kshetri 2013). In any business which is related to
software, the customers engage in business with such companies with an expectation that any
information related to them would be protected by the business. Therefore, the entrepreneur
needs to consider the security issues which mostly affect a business and incorporate counter
measures so that such a situation does not take place for the company in future. The security
level of the business would be the deciding factor as to how safe is the data of the business.
Legal Issues
There are also certain legal issues which also must be considered by the entrepreneur
before commencing the operations of the business on full scale. The entrepreneur firstly needs to
register the business as a company so that the company can enjoy a separate distinct legal status
and this can also help the business in appropriately raising capital from the market. The company
then needs to acquire copyrights for the software and technology which is being used in the 3D
scanning process (Fatoki 2014). In addition to this, the entrepreneur also needs to take legal
protection of the intellectual properties which the business possesses. In case the company is
providing its product to a telecommunication business then it must be ensured that the privacy of
the clients is maintained. Therefore, the management of the company needs to consider such
legal aspects and take necessary steps for ensuring that the business effectively adheres to all the
legal requirements of market. The management of the company needs to establish a proper
internal control system for the purpose of ensuring that all the regulations of the business are
adhered by the employees of the company
Ethical Issues
Student ID no: Course Code:

7
ACCOUNTING INFORMATION SYSTEM
In addition to the security and legal issues which are associated with a software-oriented
business, the entrepreneur also needs to ensure that a certain code of ethics is maintained in the
operations of the business. The term ethics can be defined as a set of moral principles or the
principles of conduct governing an individual or a group. It is expected from an employee that
they maintain a ethics in the business and do not engage in any activity which can affect the
reputation of the business (Stavrou et al. 2014). In many cases, it has been seen that humans
utilize the new technology or application which is unethical and thereby affects the workflow of
the business. It is very important for a business to maintain its ethical standards in business. As
per studies it has been noted that a business which maintains its ethical code of conduct is always
rewarded with high market valuation and loyalty of the customers (Ozair et al. 2014). Therefore,
the entrepreneur of the new business needs to carry out steps so that proper ethical standards is
maintained in the business and the business is able to operate in an ethical manner.
Conclusion
The above discussion shows the role an entrepreneur plays in developing a business and
also taking all the risks for the betterment of the business. The discussion above shows that
proper relations need to be established by the clients of the business and also with the suppliers
so that the business can grow in the market. The assessment also shows the requirements of the
business regarding funds and also what is the best option available to the entrepreneur regarding
capital source. The discussion also reveals that the entrepreneur also needs to consider the
security, legal and ethical aspect which is related to the business.
Student ID no: Course Code:

8
ACCOUNTING INFORMATION SYSTEM
Reference
Bourgeois, D. (2014). Chapter 12: The Ethical and Legal Implications of Information
Systems. Published through the Open Textbook Challenge by the Saylor Academy, [online] p.
Available at: https://bus206.pressbooks.com/chapter/chapter-12-the-ethical-and-legal-
implications-of-information-systems/ [Accessed 26 Apr. 2019].
Fatoki, O., 2014. Factors influencing the financing of business start-ups by commercial banks in
South Africa. Mediterranean Journal of Social Sciences, 5(20), p.94.
Finnerty, J.D., 2013. Project financing: Asset-based financial engineering. John Wiley & Sons.
Geho, P.R. and Frakes, J., 2013. FINANCING FOR SMALL BUSINESS IN A SLUGGISH
ECONOMY VERSUS CONFLICTING IMPULSES OF THE
ENTREPRENEUR. Entrepreneurial Executive, 18.
Jansen, S., Cusumano, M.A. and Brinkkemper, S. eds., 2013. Software ecosystems: analyzing
and managing business networks in the software industry. Edward Elgar Publishing.
Kshetri, N., 2013. Privacy and security issues in cloud computing: The role of institutions and
institutional evolution. Telecommunications Policy, 37(4-5), pp.372-386.
Kumar, S. and Rao, P., 2015. A conceptual framework for identifying financing preferences of
SMEs. Small Enterprise Research, 22(1), pp.99-112.
Ozair, F.F., Jamshed, N., Sharma, A. and Aggarwal, P., 2015. Ethical issues in electronic health
records: A general overview. Perspectives in clinical research, 6(2), p.73.
Qin, Q., Liang, F., Li, L. and Wei, Y.M., 2017. Selection of energy performance contracting
business models: A behavioral decision-making approach. Renewable and Sustainable Energy
Reviews, 72, pp.422-433.
Schwienbacher, A., Baker, T. and Welter, F., 2015. Financing the business. The Routledge
companion to entrepreneurship, pp.193-206.
Stavrou, V., Kandias, M., Karoulas, G. and Gritzalis, D., 2014, September. Business Process
Modeling for Insider threat monitoring and handling. In International Conference on Trust,
Privacy and Security in Digital Business (pp. 119-131). Springer, Cham.
Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D., Leimeister, J.M., Loos,
P. and Spann, M., 2014. Business models. Business & Information Systems Engineering, 6(1),
pp.45-53.
Student ID no: Course Code: