Accounting Software: Lola's Pet Supplies System Upgrade Analysis

This report analyzes the accounting software needs of Lola's Pet Supplies, a small to medium-sized business facing challenges with its current system. The report explores the advantages and disadvantages of upgrading the accounting software, considering the option of either developing a new system or purchasing an existing one. It delves into the security risks associated with both approaches, emphasizing the importance of data protection and employee training. The report further compares the costs and operational implications of making versus buying a new system, ultimately recommending the purchase of a new machine for its long-term benefits and reduced risk. The analysis highlights the owner's perspective, advocating for a strategic investment in a more effective system to improve overall business operations and efficiency. The report concludes with a bibliography of relevant sources used in the analysis.

Running head: ACCOUNTING SOFTWARE
ACCOUNTING SOFTWARE
Name of the Student
Name of the University
Author Note

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Table of Contents
Question a...................................................................................................................................2
Question b..................................................................................................................................2
Question c...................................................................................................................................3
Question d..................................................................................................................................4
Bibliography...............................................................................................................................5

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Question a
Advantages of making or buying a new system
The new system will be fast and accurate which will save time of the organisation by
recording the accounting transactions properly.
The new system will make the inventory management system more effective that will
help the organisation to manage its inventory and keep adequate stock to meet the demand of
its customers which will be cost effective for the organisation.
It will make it easy for the management to control the operations of the organisation
by getting all the financial records at the right time and based in such reports it will be easy to
take any strategic decision.It will give long term benefits to the pet shop.
Disadvantage
The buying or making of new system will bring an extra cost burden for the pet shop.
To maintain the new system a fixed salary is to be paid to the IT specialist which will
become additional fixed cost for the owner.
Question b
Security risk associated with the buying and making of the new system
The internal information of the company may get disclosed to the third parties if the
new system is prepared. Specially the employees who have strong knowledge about all the
pros and cons of the new system then that employee can make wrong use of his knowledge
and provide important data to others or can manipulate such data on regular basis so that the
owner has to depend largely on that particular employee.

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In order to mitigate this kind of risk the owner have to identify all the confidential and
most important information and should take the access of such confidential matters and
should block the employees from using such data.
The new system may not be suitable for the employees and for their unawareness a
major fault that can bring a huge loss for the pet shop. The information from the new system
may leak information to others for the unawareness of the employees which may cause
financial loss to the organisation.
This risk can be mitigated by providing training to the employees this help the
employees to manage the passwords and to neglect the risk of getting hacked by criminal
activities.
Question c
Making the new system
The making of the new machine will not require high cost at the initial stage but, the
making of the new system will require a regular update of the machine which will incur a
cost on regular basis. Then maintenance cost for making a new system will be more and that
will adversely affect the working capital of the business. The owner may feel that the making
will be more costly and it will also affect operation process of the organisation as the making
of the new system will require regular update and monitoring which may create hindrance in
recording the day to day transactions of the pet shop.
Buying a new machine
The buying of the new machine will require a large sum at the initial stage but, on the
long term if a proper training is provided to the employees then it will not require any
additional cost of keeping a programmer who will run the machine. In addition to that the

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new system will not create any problem of regular updating of system and will make the
operation process smooth and effective. As the new machine will not require the interference
of any third party so it can be said that it is risk free in comparison to the making of the
machine.
So by comparing both the options of making and buying it can be recommended to
the owners of the pet shop that they should buy the new machine as the buying decision will
give more benefits and it is less risky than the making of the new machine.
Question d
Chris is clear on his intention he clearly states that investing a big amount at the
initial stage may look unjustified in the early days but in the long run it will be more effective
for the operation if the business. Beside that the fixed cost that the company has to bear to
keep a regular IT personnel to run the software can also be avoided if the company directly
buy the machine. This can be explained through an example, suppose the cost of the new
system is $15000 and the cost of making the new machine along with the fixed salary of the
IT professional is $10000 then in that case it may look that the initial cost is high for buying
the machine but since it is a onetime expense the company will not require to pay on regular
basis and in addition to that the company will not have to make regular updating of the
software if it buy the new system

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Bibliography
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accounting system security threats in Malaysian public listed companies. Terengganu
International Finance and Economics Journal (TIFEJ), 2(1), pp.28-35.
Trunina, I., Vartanova, O., Sushchenko, O. and Onyshchenko, O., 2018. Introducing ERP
System as a Condition of Information Se-curity and Accounting System
Transformation. International Journal of Engineering & Technology, 7(4.3), pp.530-536.
Hajiyev, H., 2019. THE ROLE OF A FINANCIAL ACCOUNTING IN ENSURING
ECONOMIC SECURITY OF AN ENTERPRISE. Economic and Social Development: Book
of Proceedings, pp.420-425.
Stafford, T., Gal, G., Poston, R., Crossler, R.E., Jiang, R. and Lyons, R., 2018. The Role of
Accounting and Professional Associations in IT Security Auditing: An AMCIS Panel
Report. Communications of the Association for Information Systems, 43(1), p.27.
Haque, R., 2020. Effects of Computerised Accounting System (Cas) On the Performance of
Retail Business-(with special reference to retailers in Dhemaji town, Assam). Studies in
Indian Place Names, 40(3), pp.5141-5147.
Prihanto, H., Ariani, M., Prihatini, D. and Watriningsih, W., 2019, November.
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SMALL AND MEDIUM ENTERPRISES. In ICCD (Vol. 2, No. 1, pp. 43-47).
Holinach, L., 2019. Feasibility of Accounting for the Costs of Socially Responsible Activities
at the Engineering Industry Enterprises. Accounting and Finance, (3), pp.12-19.

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Lu, Y., 2017, April. The Characteristics and Its Application of Cloud Accounting under the
Background of Big Data. In 2017 5th International Conference on Machinery, Materials and
Computing Technology (ICMMCT 2017). Atlantis Press.