Accounting Software: Impact on Financial Reporting and Risk

This literature review explores the benefits of accounting software in financial reporting and risk management. It discusses how accounting software aids in creating accurate financial statements by ensuring entries are tallied, adjusting accounts receivables and payables, and applying money measurement concepts. The review highlights the software's role in mitigating financial risks such as credit, liquidity, and currency exchange risks by calculating and assessing potential impacts. It also examines the use of accounting software in banks for analyzing agricultural loans, managing risks associated with the agriculture sector, and calculating repayment schedules. Furthermore, the review emphasizes the function of management accounting software in decision-making, investment analysis, cost control, and risk forecasting. The importance of accounting software in ensuring compliance with accounting standards, identifying errors, and providing recommendations for policy improvement is also discussed. Finally, the review notes the role of internal control software in lending decisions, business assessments, and error correction, leading to correct financial reporting.

Article 1
Benefit of accounting software in financial report making and financial risk management:
Accounting software helps in making financial statements by checking of entries and matching on
both sides debit and credit. It tells whether the statements are tallied or not. Accounts receivables
and payables are also adjusted as per accounting principles of realization. Money measurement
concept is also applied in transactions with business parties.
The financial risks are those like credit risk which can occur from creditors and mitigating the
financial risk is a challenging task for the company. The other financial risks like liquidity and
exchange of currency risk also are some of the factors which must be kept in mind for assessment by
management accountants (Naumenkova and et.al., 2020). Accounting software helps in risk
mitigation of these risks by calculation of the risks being posed in amount through percentage terms.
This way organization is benefitted for knowing the calculation results and take measures.
Article 2
Accounting software used in banks for analyzing agricultural loans in financial reports:
Agriculture is a sector which is involving risks due to climatic weather conditions, natural disasters
and uncertainties in prices and yields with lack of financial services. The software systems being
developed for the purpose help in channelising these risks for effective control through financial
institutions (Behzadi and et.al., 2018). Accounting software helps in noting down the entries of
purchases of raw material and loans taken. Also, through internal control system in software, the
credit giving date of repayment is also calculated for the farmers. EMI calculation and provisions to
be made for them in case the crop fails are also noted in the balance sheet and updated by software
for future references.
Benefits and use of management accounting software in financial decision:
Article 3
Management accounting software systems helps in identifying and analysing measures which can
help in decision-making and managing of risks occurring in short and long term Through software,
investment analysis can be done, with calculation of discount rate and cash flow of projects being
beneficial for organisation to take steps necessary. Thus, management accounting software helps in
forecasting and managing of financial risks (Pasch, T., 2019). Through use of measures of zero-based
budgeting software present in management accounting system, risk mitigation can be achieved of
factors of current demand and factors of inflation causing rise in product prices.
Article 4
Use of accounting software by accountant for checking financial regulations in financial reports:
Accounting through software of Enterprise Risk management system is part of the mindset of an
accountant. Through accounting software, one can judge on the errors and point out the mistakes to
the senior level. Accountant is also able to do operational calculations which are complex and

provide solutions. The accounting software assists in knowing of details whether company has
followed the Accounting Standards Rules or not. This way, accountant can thus provide feedback to
the senior management. Accountant can rightly point out the errors in decision-making of the
organisation and can give recommendations for improvement in policy (Bento, Mertins and White,
2018).
Article 5
Role of software in providing valuable information for financial reports:
There is software that are used in accounting management speaking of banking and lending financial
institutions, where the bank can give risk ratings to loans being given, ratings of companies being
lent to and the probability of getting the loan back. This is used for the internal assessment for these
institutions. Internal controls used in accounting system software correct the errors in entries being
present on auto-mode thus, helping in correct reporting of financial statements and helping in
tallying the balance sheet (Putra, 2019). Internal control systems in software help in forecasting and
developing of cash flow statements thus providing help in financial and fiscal reporting.
Literature review
As per Naumenkova and et.al. (2020), financial risks for management accountants are the credit risk,
currency exchange risk and working capital risk. The accounting software helps them in risk
assessment and performing risk mitigation through techniques present. Calculation of financial
matters through accounting software done by accountants help save company from forthcoming
situations where provisions for the same can be required.
As per Behzadi and et.al. (2018), accounting software has helped in financial institutions get a knack
of lending terms to agriculture sector. Uncertainty in agricultural produce due to various factors
pose the credit risk. For combating it, accounting software helps in the calculation of purchases,
paying capacity of the farmer to repay the loan and avoid non-performing loans. It also indicates
provisions required to be made in financial statements.
According to Pasch (2019), management accountant software role helps in cost cutting by cost
analysis methods, then to investment analysis for avoiding project giving less returns and thus
estimating the cash flows and discount rates associated with the projects. Correct estimations for
avoiding inflation risk through scientific budgeting approach is also a function of accounting
software.
As said by Bento, Mertins and White (2018), accounting’s software role for accountant is necessary
in effective operational management for organisation. The accounting software can not only help in
pointing out errors in system but also suggest recommendations for improvement in organisation’s
financial policy.
As said by Putra (2019), accounting software and internal control software help in internal
assessment of lending decisions and other business decisions. Also, they help in correcting errors in
statements through auto-control method and present the financial reporting correctly for use.

References
Books and Journals
Naumenkova, S., Tishchenko, I., Mishchenko, S., Mishchenko, V. and Ivanov, V., 2020. Assessment
and mitigation of credit risks in project financing. Banks and Bank Systems, 15(1), pp.72-84.
Pasch, T., 2019. Strategy and innovation: the mediating role of management accountants and
management accounting systems’ use. Journal of Management Control, 30(2), pp.213-246.
Bento, R.F., Mertins, L. and White, L.F., 2018. Risk management and internal control: A study of
management accounting practice. In Advances in Management Accounting. Emerald
Publishing Limited.
Akhmetshin, E.M., Vasilev, V.L., Vlasova, N.I., Kazakov, A.V., Kotova, X.Y. and Ilyasov, R.H., 2019.
Improving management functions at an enterprise: levels of the internal control
system. Calitatea, 20(171), pp.39-43.
Behzadi, G., O’Sullivan, M.J., Olsen, T.L. and Zhang, A., 2018. Agribusiness supply chain risk
management: A review of quantitative decision models. Omega, 79, pp.21-42.
Putra, Y.M., 2019. Analysis of Factors Affecting the Interests of SMEs Using Accounting
Applications. Journal of Economics and Business, 2(3), pp.818-826.
Adamyk, O., Adamyk, B. and Khorunzhak, N., 2018. Auditing of the software of computer accounting
system.