Analyzing Cloud Computing's Role in Accounting Information Systems

This report provides a comprehensive overview of cloud computing in Accounting Information Systems (AIS). It begins by defining cloud computing and its functionalities, highlighting its transformative impact on business operations. The report then delves into the benefits of cloud-based AIS systems, such as improved efficiency, cost reduction, and enhanced data accessibility. It also examines the challenges associated with cloud adoption, including data security concerns, privacy risks, and the need for robust governance. The report further explores real-world applications and provides recommendations for businesses considering cloud-based AIS solutions, emphasizing the importance of data protection, risk analysis, and user training. Finally, the report concludes by summarizing the key advantages and disadvantages of cloud computing in AIS, emphasizing its potential for growth and innovation in the accounting industry. The report is a valuable resource for students and professionals seeking to understand the evolving landscape of accounting information systems.

Running Head: AIS -Cloud computing
Accounting
Informatio
n System

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Table of Contents
Introduction...........................................................................................................................................2
Cloud Computing...................................................................................................................................2
Functionalities.......................................................................................................................................2
Cloud based AIS system.........................................................................................................................2
Challenges.............................................................................................................................................2
Benefits..................................................................................................................................................2
Recommendation..................................................................................................................................3
Conclusion.............................................................................................................................................4
References.............................................................................................................................................5

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Introduction
Cloud computing is one of the emerging technology that have changed the market. In
this report the limelight is thrown on cloud computing, its benefits and the major challenges
offered by AIS based cloud computing solution. Cloud based AIS is beneficial as accounting
of data is increasing in volume day by day. In order to work faster and efficient cloud in
used. In short cloud computing improves the company’s experience as users do not need to
worry about their application getting fixed, as cloud look for all the bugs. Cloud computing
is assisting in accounting firm to attain the objective by saving money. It is a way to reduce
costs, improve efficiency and make data more accessible from anywhere at any time.
Cloud Computing
Cloud computing is an emerging technology that make use of internet and provide
remote services by maintaining data and applications. Cloud computing can be treated as a
metaphor of internet, where users simply access the software’s and uses the resources without
actually buying them. Users pay only for what they use. The growth of cloud computing has
increased over the network as it cut the cost and improves the ability to access the data and
perform best practices (Kranz, Hanelt and Kolbe, 2016). Cloud computing has turned out to
be highly dynamic as it adapt to multiple data requests and work with all form of resources
without the users efforts.
Functionalities
Cloud computing has changed the way business work today. Cloud computing has made
the business functions cheaper as well as reliable (Islam, Bilal and Ilyas, 2017). Various
functions offered by cloud are:
 Data sharing and backup- It is one of the major functions that has made cloud
popular. It eliminates the overhead associated with storing the file and offer easy
access from all over the globe (Islam, Bilal and Ilyas, 2017). It is scalable and keeps
remote backups of all the sensitive data.
 Telecommunication- It has made businesses available to communicate from
anywhere by using various advanced tools developed for communication and
collaboration.

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 Resource Planning-Cloud platforms has been beneficial for small business as it they
allow outsourcing the management of software and resources.
There are many other functions like on demand service, customer relation management and
productivity of business that have helped organisation s to grow rapidly (Islam, Bilal and
Ilyas, 2017).
Cloud based AIS system
Accounting Information system had helped many companies to monitor, manage and
secure their resources. Cloud based solution ha offered best platforms for AIS that eliminates
all the issues that were faced by traditional methods. ACRON is one of the examples of AIS
cloud solution that has been used in the market these days (Rittinghouse and Ransome, 2016).
This work in possibly all IT departments and there is no additional maintenance cost required
to manage the tasks. It is easily scalable according to the needs of an organisation.
Challenges
In the views of (Scholtz, Govender and Gomez, 2016), using cloud based AIS
solution increases the risk of data security and privacy. As in this the complete ownership is
transferred in the hands of cloud owners. The accounting information is a very sensitive data
for an organisation thus it can be trusted to maintain the privacy in hands of third party. The
use of AIS based services also increases the chances of cyber-attacks, as the data stored
online can be accessed by hackers from side doors which cause the risk of data leakage. The
quality of service is also affected by using cloud based service. They fear is associated with
the cloud service provider as they do not provide any guarantee to ensure security of any
application or data. Other than that, without proper service quality the enterprise suffer from
poor performance die to infrastructure of cloud. Sometimes the automatic accounting
information system may cause error which cannot be tracked easily. It also requires proper
governance control to ensure that all legal operations are done. Some companies do not
showcases all the data to government authorities, thus AIS could be problematic in that case
(Linkedin, 2016). The cloud based systems do not provide full control over the operations of

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infrastructure. This has somewhere increased the problems for IT as they need to offer the
governance, compliance and risk management.
According to (Lian, Yen and Wang, 2014), the challenges faced by using by AIS cloud
computing is there is always a restriction in terms of using applications, operating system and
platform. Cloud service provider only offers those services that are available. It may also
cause loss of information as it is computerized. There is always a risk associated as if in case
cloud crashes all the important data will be lost (Son, Lee and Chang, 2014). Cloud based
accounting information system cause huge lose to the company if some miss-happening
occurs.
In the views of (Jones, Irani, Sivarajah and Love, 2017), cloud based accounting system is
difficult to set up because every company uses unique way. In order to keep the system
updated with the changes, accounting information systems need to be re-evaluated regularly
which is difficult in terms of cloud based system. It is important to make changes in the
system in order to process information efficiently. This can be a disadvantage to companies
because it takes time for the re-evaluation and it costs money.
Benefits
According to (Hao and Shihong, 2015), there are various benefits that are offered by
using AIS cloud based solution. These services are much faster as compared to the old in
house traditional methods. These services require minimum involvement in IT department, as
AIS automatically performs solution upgrades and maintenance needed for tasks.
Additionally, nowadays enterprises require financial and non-financial reporting on regular
basis. The cloud based AIS solution adapts to the rapid change that occur in market
(Zhang, 2012). It is helpful as this gives periodic reports that help in analysing eh business in
a better way and get proper feedback. Higher competition in the market requires updated
information to enable management rapidly and adapt to opportunities and answer problems.
In the opinion of (Uglietta, 2015), Cloud based AIS is beneficial as it offers ease of access.
The employees can access to finical data of business from anywhere around the world at any
time. It provides ease to users as they do not need to download anything to their personal
system all they need to do stay connected to internet. They can keep track of all the business

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reports without worrying about their physical location. Apart from that price is another
advantage of AIS cloud based solution, as they just need to pay monthly according to the use.
It reduces all the maintenance cost and cost needed at time of server failure. These all issues
are managed by cloud accounting service provider (Han and Xia, 2014). AIS system offers
automatic management and if managed properly cloud accounting it provides up-to-date
financial information to the business. This helps the business to make changes and allow
team to access the information remotely. AIS system also offers data security by keeping
backups. It offers availability, integrity, confidentiality of data packets along with disaster
recovery methods.

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Recommendation
Cloud computing application offers various services as well as it raises a number of
difficulties. The company before making use of cloud based application should be aware
about the services offered and risk associated with it. It is necessary to get full guarantee of
data protection because all the sensitive data is stored over cloud. It is recommended that
before using cloud it should be clearly identified about the data controller. Additionally, it is
suggested that a proper analysis should be done of the risk to identify the security measures
associated with the organisation. Apart from that a system for backup of data should be
designed so that if in case cloud crashes, businesses do not undergo loss. It is recommended
that proper knowledge should be accomplished by the user as system is automated and no
human intervention is required. Cloud accounting software’s assists similar functions like
normal accounting software but this need not to be installed on personal computers as they
allow remote access to data can be accessed through internet at any point of time from any
location. It makes sure that no additional payment is required because AIS does that for users
and they do not need any servers or desktop configurations. Thus it can be stated that it offers
more flexibility to the business by making it all the accounting information available on
demand. This will surely prove to be beneficial in accounting firms as they offer ease to
clients that were previously unachievable.

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Conclusion
In can be concluded, that cloud computing offers a wide range of possibilities for
business to grow. It uses innovative ideas to develop products and services by making uses of
all the available information and resources and make it available to remote clients. This has
eliminated the need of physical storage and has updated the strength of security by keeping
track of all the disaster recovery approach. It also provides accessibility from anywhere
which has turned out to be beneficial for many accounting firm. Cloud based solutions have
changed the performance of many industry as it has altered the ways of operations.

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References
Han, G. and Xia, Q. (2014) A research on the application of cloud computing in AIS.
In Mechatronics and Control (ICMC), 2014 International Conference on (pp. 2028-2030).
IEEE.
Hao, Q. and Shihong, Z. (2015). Accounting Informationization Hierarchical Data Safety and
Prevention Based on Cloud Computing, pp.45-67.
Islam, K., CH, A.R., Bilal, A.R. and Ilyas, M.U.H.A.M.M.A.D. (2017). Accounting
Information Systems: Traditions and Future Directions. The Journal of Internet Banking and
Commerce, 22(2), pp.1-13.
Jones, S., Irani, Z., Sivarajah, U. and Love, P.E. (2017). Risks and rewards of cloud
computing in the UK public sector: A reflection on three Organisational case
studies. Information Systems Frontiers, pp.1-24.
Kranz, J.J., Hanelt, A. and Kolbe, L.M. (2016). Understanding the influence of absorptive
capacity and ambidexterity on the process of business model change–the case of on‐premise
and cloud‐computing software. Information Systems Journal, 26(5), pp.477-517.
Lian, J.W., Yen, D.C. and Wang, Y.T. (2014). An exploratory study to understand the critical
factors affecting the decision to adopt cloud computing in Taiwan hospital. International
Journal of Information Management, 34(1), pp.28-36.
Linkedin, (2016). Advantages & Disadvantages of Cloud Accounting. Available from
https://www.iqvis.com/blog/top-6-challenges-of-cloud-implementation/ Accessed on 14
MAY 2018.
Rittinghouse, J.W. and Ransome, J.F. (2016). Cloud computing: implementation,
management, and security. CRC press.
Scholtz, B., Govender, J. and Gomez, J.M. (2016). Technical and Environmental Factors
Affecting Cloud Computing Adoption in the South African Public Sector. In CONF-IRM (p.
16).
Son, I., Lee, D., Lee, J.N. and Chang, Y.B. (2014) Market perception on cloud computing
initiatives in organizations: Information & Management, 51(6), pp.653-669.

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Uglietta, J. (2015). Cloud Computing Benefits for Accounting Firms. Available from
https://www.aisn.net/cloud-computing-benefits-for-accounting-firms/ Accessed on 14 MAY
2018.
Zhang, R. (2012). CLOUD COMPUTING BASED TECHNOLOGY INNOVATION. Available
from http://aisel.aisnet.org/cgi/viewcontent.cgi?article=1092&context=pacis2016 Accessed
on 14 MAY 2018.