Cloud Based Accounting Method and Traditional Accounting Method

Questions: Define and Explain the Differences between a Cloud based Accounting System and a Traditional Accounting System and Identify Potential Risks or Limitations in adopting a Cloud Based Accounting System. Answers: Introduction Diatmika, Irianto Baridwan, (2016) explained that he Accounting Information System (AIS) is understood as a sketch that facilitates in happening, maintain and collection of several data types that includes accounting information and financial viability. For this reason, it has been gathered that certain specific accounting information system that is helpful for the individuals those make considerable decision regarding the proper management of a specific business. In such manner, it can be assumed that AIS is a particular accounting method that is activated within the computer systems assistance (Domeika, 2015). Moreover, the AIS majorly facilitates the individuals to take decisions in developing measures particularly the ones those are associated with the accounting methodology along with the reservations of information technology. Explanation of Traditional Accounting Method Du Huddart, (2016) according to traditional way, accounting method is understood as giving away all the expenditures that serve as the overhead of the manufacturing companies to the cargoes that are formed. In addition to this, the meticulous accounting method in traditional manner apportions the overhead that can be either mandating in nature and can be aligned with the manufacturing plant overheads in order to manufacture convinced cargoes relied on the total volume. In addition, it can be gathered that the quantity relied on the aspects encompassing the cargoes statistics that can be generated, direct labour hours and the production plant for manufacturing convinced cargos relied on the total volume (Ismail, 2016). Moreover, it can be indicated that the quantity relied on certain aspects includes the statistics of cargoes that is generated. Explanation of Cloud Based Accounting Method Accounting to Moghadam et al., (2013) it has been gathered that the accounting technique within cloud based way is signified as some dealings, particularly the ones that takes place through the assistance of the internet connection. In addition, it has been defined that such system does not include any style fitting software within the computer systems in order to administer the technique of accounting within an efficient clear manner. In addition, Prasad Green, 2015) gathered that corporations that remain with the cloud computing vend the accounting services long with offering several isolated roles and servers. Association among Cloud Based Accounting Method and Traditional Accounting Method Based on the detailed study, it has been gathered that that there are several correspondences among the two accounting techniques those are the accounting techniques with a cloud based way along with the accounting technique in a traditional manner. Such similarities includes both the techniques of accounting along with having certain resemblance, there are certain variations between the two techniques (Romney Steinbart, 2015). These are indicated under: Accounting Technique in a Cloud Based Manner Accounting Method in a Traditional Manner The cloud-based accounting method has decreased upfront expenditures and operation costs. The traditional accounting technique has increased upfront expenditure and operation costs. The particular system of accounting has been found to assist the methodology of execution rapidly (Domeika 2015). For the traditional accounting technique, the execution methodology takes excessive time. Cloud based accounting provides aids to provide promotion and updates in a prompt manner. Traditional accounting method does not offer promotion along with speedy access. Cloud based methodology of accounting facilitates in civilizing the mobility, usability and accessibility. Traditional accounting methodology must not the company within the process of civilizing the accessibility, mobility and usability (Moghadam et al. 2013). The integration technique is effortlessly followed with the services associated with cloud. Moreover, the technique of traditional accounting is the amalgamation practice that might not be made effortlessly with certain assistance of the exacting technique. There is certain risks occurrence regarding the safety along with recital within the particular case method of accounting that is cloud based. The traditional accounting system is exempt from certain safety category along with certain recital risks. The remaining risks that are linked with the specific cloud-based accounting system include risks of compliance and strategy (Du Huddart 2016). Moreover, in case of traditional accounting system, there is deficiency of certain types of risks, be it certain risks associated with the strategy or compliance. Restraints of Accounting Method Implementation in Cloud Manner The important inconveniences of using the accounting techniques in a cloud-based manner in the company are mentioned under: There are certain restraints regarding the incorporation, customization, functionality along with hybrid consumption policy. Certain SLA concerns are the most common concerns that are generally faced y the accounting method in a cloud-based manner. The accounting technique in a cloud-based manner involves several types of risks and this includes certain concerns that are associated with the performance of the companies the risks those are related with the data along with the information security along with the risks associated with the compliance and the risks that is strategically narrated (Tazik Mohamed, 2014). The daily expenditure that includes operating costs along with the fixed costs of implementing the accounting method in a cloud manner are additional because of the presence of subscription expenditures. Conclusion It has been gathered that both the explained accounting methods have certain disadvantages and advantages. For this reason, certain companies must employ certain accounting techniques relied on the business category as well as its size. Moreover, certain companies those have considerably smaller budget and gave the employees only the one those work significantly, cannot serve themselves with suitable businesses and the defence that considers eluding from the categories of likely bodily calamities with the expertise within certain accounting system. This implies particular business can include cloud-based system of accounting in order to operate business in a better manner. References Diatmika, I. W. B., Irianto, G., Baridwan, Z. (2016). Determinants of Behavior Intention Of Accounting Information Systems Based Information Technology Acceptance.Imperial Journal of Interdisciplinary Research,2(8). Domeika, P., 2015. Creation of the Information system of enterprise fixed asset accounting.Engineering Economics,60(5). Du, K., Huddart, S. (2016). Accounting Information Systems, Investor Learning, and Stock Return Regularities. Ismail, N. A. (2016). Accounting information system: Education and research agenda.Malaysian Accounting Review,8(1). Moghadam, H. M., Akhavansaffar, M., Bakhshaei, Z., MirHosseini, S. Y. (2013). Effect of investment in information technology system on providing desired services of accounting information system.Elixir International Journal A,55, 13268-13273. Prasad, A., Green, P. (2015). Organizational competencies and dynamic accounting information system capability: impact on AIS processes and firm performance.Journal of Information Systems,29(3), 123-149. Romney, M. B., Steinbart, P. J. (2015). Accounting Information System Thirteen Edition. Tazik, H., Mohamed, Z. M. (2014, February). Accounting information system effectiveness, foreign ownership and timeliness of corporate financial report. In5th Asia-Pacific Business Research Conference(pp. 17-18).