Question

Research assignment:

You are a junior accountant in a rapidly expanding firm that is still using a manual accounting system. Your manager, the accountant has indicated that it was probably time for the firm to migrate to using electronic accounting. You were therefore given the task to present a paper at the next staff meeting on the pros and cons of your firm using accounting software in the near future.

You are also required to write this paper in an essay form (300-350 words), listing REFERENCES of where you obtained your information. Remember your essay SHOULD NOT be in point form. Failure to comply with the requirements, automatically gains you a zero in this assignment.

Answer 1

Change over Accounting system from Manual to Computerised system :

Computerised accounting system always good from in relates to increased efficiency and time management .

Company maintain accounting to track expenses , recognised revenue , accounted all liability as well as asset , maintain Equity and Debt etc . Ultimately this financial is most important tool for Business Owners to take additional decision as well as future decision .

Most important factor to note is “ Accuracy “ of data – Computerized accounting has the advantage of higher accuracy when compared with manual activity.

Under Manual system , always high chance to make error by human . In case of complex business consist of multiple transactions , account balance , currency movement , exchange difference etc , . Under Computerised system , this will be eay to operate control and reconcile

Reliability of data – After accuracy , another important factor is “ Reliability” of data . Under computerised system , accountant can understand the flow of data process and they can easily identify any error in process or data flow and take immediate measurement .

Reporting system – very fast provide complex data , information , transactions under Computerised system

Cost factor in case of Computerised system is more expensive rather than Manual base accounting . But in present scenario , Auditor needs all financial report should be from system generated and they do completeness , accuracy checking of data , information and transaction . They can only reliable on computerised data to determine any error in the statement . Even though company spend more cost in case of acquisition of new software but this will definitely help company in near future

Major disadvantage in manual base accounting are as follows “

Hard to make changes- Any changes with in fraction of time its really a difficult task under manual base accounting system . We always need to maintain original document and need to follow to many copy and paste concept

Lack of security – this is one of the most important factor in case of security ( data security).

Access time –Definitely manual accounting system take much more time to complete any job . It sis not easy to handle any complex transaction under manual base accounting

Process to follow data movement from Manual to computerised system are as follows:

Installing New system – before install new system , owner has to verify which software will be good enough to install as per business requirement

Parallel run and conversion of data from Manual to computerised – After selecting final software by owner , nect step would be conversion of data from manual to computerised system and run parallel both at least 6 months to complete smooth transition

During transition time , need to ensure all General Ledger , account balance has been transferred correct way and need to do reconciliation if require to check completeness

After successful transfer data , reconcile data , may be certified by Auditor about transition , finally stop manual ( legacy) process .

Major disadvantage under computerised system are as follows:

1. Potential fraud – More computerised system , more well come of fraud , system fraud . Challenges in data security . Most important point to note that data can be hacked if company not maintain proper cyber security .
2. Technical issue – Several technical challenge under computerised system like – users not experienced enough to run system . Data breaches . computer might be effected by virus and lot all information data , information .