Report: Cloud Based Accounting Information System Adoption in Business

This report provides a comprehensive analysis of cloud-based Accounting Information Systems (AIS) adoption in business organizations. It begins with an introduction to AIS and the benefits of cloud computing, including self-service, cost reduction, and quality of services. The report then delves into the challenges and benefits of cloud-based AIS, such as increased profits, reduced technical errors, and improved information management, alongside challenges like change management, physical security, and multi-tenancy issues. Based on these challenges, the report offers recommendations such as data encryption, firewall usage, and strong password protection. The conclusion emphasizes the potential for economic success and competitive advantages through successful cloud-based AIS implementation. The report references several academic sources to support its findings.

Running head: ACCOUNTING INFORMATION SYSTEM
Adoption of Cloud Based Accounting Information System in Business Organizations
Name of the student:
Name of the university:

1ACCOUNTING INFORMATION SYSTEM
1. Introduction
Accounting information system (AIS) is referred to as a formal collective process
comprises of data collection, processing of data to information, information distribution, widely
used by most of the large to medium business organizations for managing their credentials
(Diatmika, Irianto and Baridwan 2016). It has been analyzed that the managerial, operational and
accounting level issues can be completely resolved with the implementation of cloud based
Accounting Information System (AIS).
This report depicts the overview of cloud computing system its functionalities. In
addition to this it is also defied that ff any business organizations fail to consider all necessary
factors then the business may face serious commercial and competitive loss. The benefits and
challenge of cloud based accounting system are also elaborated in this report. Apart from this,
based on the identified challenges necessary recommendations are also demonstrated in this
report.
2. Overview of Cloud computing
The concept of cloud computing has been merged with the Accounting Information
System to serve huge number of consumers. It uses multi tenancy where the different resources
are frequently allocated paralelly de allocated according to the demand of the users because from
the end of the users it is not possible to actually find out where the resources are resides
(Sudaryanti, et al. 2015). The functionalities served by cloud computing is as follows:
Self servicing and on demand services: Cloud computing technology is completely
based on the self service as well as on demand models for services. It allows the users to make

2ACCOUNTING INFORMATION SYSTEM
interaction with the cloud for performing tasks such as building, deploying, accounting,
managing as well as scheduling. Through cloud AIS the users will be able to access the
computing abilities. It also helps the user to control and bridging to serve all necessary future
needs.
Reduced cost level: The level if total cost gets reduced because cloud does not have any
kind of upfront cost. The users have to pay based on the required amount of the resources. The
ultimate costs of the operation get reduced and users can easily track the usability (Appelbaum et
al. 2017). Therefore, usage of the cloud based AIS are also commercially beneficial.
Quality of services: cloud computing gives one of the level of service to the users.
Within the SLA the included service levels are round the clock availability guarantee, resource
adequate, bandwidth and performance. If the services lack any one of these guarantees then it
will prove fatal for consumers.
3. Challenges and benefits of cloud computing
The purpose of implementing cloud based Accounting information system is to collect,
transfer and process data according to the need of the business and consumers. The informational
report produced by different business organizations helps the project heads to take effective
strategic decisions (Givoly, Hayn and Katz 2017). AIS can even be manual system and most of
the Accounting Information systems are computer based. The below section defines the
challenges and benefits associated with the cloud based AIS.

3ACCOUNTING INFORMATION SYSTEM
3.1 Benefits
Earn greater profits: Cloud accounting system offers higher level of profit margin to the
firms as they always search for value CFO and service at a planning level (Trigo, Belfo and
Estébanez 2014). The profit margin carried out by the cloud AIS is higher than the serviced such
as tax audit etc. It helps to provide advisory services to the consumers those are actually valuable
to the clients.
Reduce the level of technical error: The level of technical level errors gets reduced with
the implementation of the cloud based AIS in the business organizations. The traditional model
of desktop based accounting software use to face major errors in managing data (Abdallah
2014.). Management of multiple numbers of software at a time has become serious issues for the
business organizations. In case of cloud based AIS both the accountant and the client use a
shared platform thus the interaction has become easier and as a result, the issues of license and
version have reduced.
Provide proper information: The cloud based AIS gives clean information to the
business organizations to take effective managerial decisions. The root causes of the issues of tax
and audit that most CPA usually brought. In case of those business environment where cloud
AIS are using the business accountants ensure that the data are completely clear and error free.
Reduce cost overrun and time errors: The cloud AIS offers huge storage to the
business owners to reduce the issues of data access and storing. It has been found that, the
operation and functional cost gets reduced with this implementation (Collier 2015). In traditional
days information fetching and information storing was quite time taken but cloud AIS has
reduces the time to fetch and insert information to the server.

4ACCOUNTING INFORMATION SYSTEM
3.2 Challenges
Change management: Implementation of business changes are always identified as
serious issues. Successful navigation of such changes is not possible without effective
communication. Stronger and experienced leadership is required for such changes in the business
organization.
Physical security of the hardware: Cloud offers wider operational and functional
opportunities thus it always interrupts the security of the business organizations (Appelbaum et
al. 2017). Cloud service provider’s hosts hardware on location. In order to get access of the
hardware many times the users are found to be connected to the applications through wither apps
or any browsers. Due to the absence of on-site server the physical access of the hardware become
difficult thus, the user’s loss control over the data center. Due to these reasons the equipments
are not defined as a secured one.
Multiple tenancies: In business organizations sometimes it is also found that the
hardware used at the cloud services are often hosted by more than one client which generated
serious multi tenancy issue (Givoly, Hayn and Katz 2017). In this time phase if any hacker
targets the server then they can easily hijack information stored in the server.
4. Recommendations
Based on the cloud AIS challenges some recommendations are also elaborated in this
section and the recommendations are as follows:
Usage of data encryption mechanism: It is necessary for the business organizations to
keep their credentials protected from the external users. This is possible with the help of proper

5ACCOUNTING INFORMATION SYSTEM
data encryption technology In order to maintain the data security the encryption key should not
be shared with any third party apart from the sender and the receiver (Trigo, Belfo and Estébanez
2014). Both the symmetric and asymmetric encryption keys can be used to keep the information
secured.
Usage of firewall: The Cloud based Accounting Information system is all about data
collection, information transfer and information processing at the same time. It is the
responsibility of the business organizations to use proper application firewall to reduce the issues
of information hijacking.
Strong password for server protection: Using stronger level of password will help the
business organizations to keep their credentials secured (Lutfi, Idris and Mohamad 2016). Cloud
provides huge storage area to the users thus the total number of users for the server is also high.
The server owners should use strong password for protecting the storage from unwanted access.
5. Conclusion
From the overall discussion it can be concluded that, with the successful implementation
of the cloud based Accounting Information System (AIS), the business organizations will be able
to gain effective economic success and competitive advantages. The functionalities of the
business organization become much easier after the adoption of the cloud based Accounting
Information System (AIS). Data collection, transfer of data to information and information
distribution become easier with the adoption of cloud based AIS. Besides cloud functionalities,
the challenges and benefits associated to it are also elaborated in this report. Based on the
identified challenges some recommendations are also elaborated in this report.

6ACCOUNTING INFORMATION SYSTEM

7ACCOUNTING INFORMATION SYSTEM
References
Abdallah, A.A.J., 2014. The impact of using accounting information systems on the quality of
financial statements submitted to the income and sales tax department In Jordan. European
Scientific Journal, ESJ, 9(10).
Appelbaum, D., Kogan, A., Vasarhelyi, M. and Yan, Z., 2017. International Journal of
Accounting Information Systems. International Journal of Accounting Information Systems, 25,
pp.29-44.
Collier, P.M., 2015. Accounting for managers: Interpreting accounting information for decision
making. John Wiley & Sons.
Dandago, K.I. and Rufai, A.S., 2014. Information technology and accounting information system
in the Nigerian banking industry. Asian Economic and Financial Review, 4(5), pp.655-670.
Diatmika, I.W.B., Irianto, G. and Baridwan, Z., 2016. Determinants of Behavior Intention Of
Accounting Information Systems Based Information Technology Acceptance. Imperial Journal
of Interdisciplinary Research, 2(8).
Givoly, D., Hayn, C. and Katz, S., 2017. The changing relevance of accounting information to
debt holders over time. Review of Accounting Studies, 22(1), pp.64-108.
Lutfi, A.A., Idris, K.M. and Mohamad, R., 2016. The Influence of Technological, Organizational
and Environmental Factors on Accounting Information System Usage among Jordanian Small
and Medium-sized Enterprises. International Journal of Economics and Financial Issues, 6(7S).

8ACCOUNTING INFORMATION SYSTEM
Patel, S., 2015. Effects of accounting information system on organizational
profitability. International Journal of Research and Analytical Reviews, 2(1), pp.72-76.
Sudaryanti, D., Sukoharsono, E.G., Baridwan, Z. and Mulawarman, A.D., 2015. Critical
Analysis on Accounting Information Based On Pancasila Value. Procedia-Social and Behavioral
Sciences, 172, pp.533-539.
Susanto, A., 2016. The Influence of Accounting Information System Quality to Accounting
Information Quality and its Implications to the Good Study Program Governance. International
Business Management, 10(24), pp.5767-5776.
Trigo, A., Belfo, F. and Estébanez, R.P., 2014. Accounting information systems: The challenge
of the real-time reporting. Procedia Technology, 16, pp.118-127.