Cloud Computing and its Relevance to an Accounting Information System - Literature review Example

Cloud Computing and its Relevance to an Accounting Information System Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Cloud Computing and its Relevance to an Accounting Information System Cloud computing is a computing system that allows many users to access a central database simultaneously. In a close computing system, the central remote servers and the internet are used to maintain and store applications and data. The storage of the cloud system contains several programs and applications which the users of the system may want to use. In addition on this, the cloud remote server acts as a storage for the data and information which the various users of the cloud computing system use (Geelan, 2012b, p1).The use of information technology in the modern business world increased tremendously over time. Due to this, individuals and organizations have sought to have various applications and programs which they need in their daily business operations. Due to the fact that getting program licenses can be very expensive to an individual and also an organization, there arises a need to have a cheaper and efficient means of getting access to the software and applications needed for business operations. The need for an efficient data storage system has also been a problem in many organizations. This has given rise to cloud computing systems (Knorr & Gruman, 2012, p.1). A cloud computing system is made up of various programs, software and applications which are applicable in various business operations. In so doing, business organizations are able to evade the costs of purchasing new software licenses in addition to getting an efficient storage system. The following essay will discuss the concept of cloud computing and at the end, it will evaluate its appropriateness for use in accounting. There are two main classifications of cloud computing which are location and type of services offered by the cloud computing system. With respect to the location of the cloud, there are four categories which are public, private, hybrid and community clouds. In a public cloud, the system is shared among different organizations. The client does not have a say as to where the cloud should be located. In a private cloud, the system is specifically meant to for an individual organization a private cloud system can either be hosted in the premises of an organization or externally. The hybrid cloud system is one in which an organization hosts the vital software and data in a private cloud but seeks the services of a public cloud for other services. Lastly, in a community cloud, organizations sharing a common relationship for instance a group of companies share a common cloud computing system (Bettino, 2012, p1). With respect to the type of services offered in a cloud computing system, there are several classifications. The first one is infrastructure as a service (IaaS). In this category, computing hardware services are offered using the operating principles of a cloud computing system. The second category is platform as a service (PaaS) whereby a development platform is offered on the system. The last form category of cloud computing in this category is the software as a service (SaaS). In this type of service, various software and applications are offered on the cloud. Cloud computing is taking the IT and business world by a storm. This is due to the various benefits associated with cloud computing. Over the recent years, many cloud computing services providers have come up such as Google, Flexiscale, Amazon and force.com. Over time, the cloud computing service provision has increased tremendously with many more players joining the industry. The reason behind this remarkable growth in the use of cloud computing is because of its usefulness (Kim, 2009, p.1). The following section will discuss the usefulness of cloud computing in details. One of main usefulness of cloud computing is its ability to reduce operational costs. Cloud computing is all about getting the software and applications which are needed in a specific industry, pooling them together is a remote server and a making them available to the clients linked with the cloud system. In addition to this, the cloud may also provide hardware related services to the clients. This ensures that the clients do not incur the high costs of purchasing and maintaining software and some types of hardware systems which they use. The cost associated with an organization using a cloud computing service is far much lesser as compared to purchasing and maintaining software and applications. The extra costs which organizations incur to hire IT professionals to install and maintain specific software needed in an organization is also avoided. The mobility of cloud computing is another benefit of the computing system. A user to the system is able to access the system via the internet across any part of the globe (Dutt, 2012, p.2). Mobility is a very important element sought for by many business professionals. This is because of the numerous emerging trends in the modern business world. For instance, internationalization is the one of the main trends associated with the modern business world. Organizations are venturing into international markets with a bid of increasing their market share and also their revenue. For this reason it has become of importance for an organization to access its crucial data in addition to carrying out its operations on any part of the globe which it is doing business at. Cloud computing has come to satisfy this need. As indicated earlier, the data and the applications provided in a specific cloud system are accessible via the internet. Therefore, it is possible to work anywhere on the globe, as long as an individual is connected on the of the web. On this point, professionals are also able to work on any part of the earth. This is a major factor which has enabled online working. As at today, it is possible for an accountant to work in Africa for a company based in America due to cloud computer systems. Another benefit of a cloud computer system is its efficient data storage service. Data loss due to various factors such as malware, physical damage and sabotage are very common in the modern business world. Because of this, it has been the desire of many organizations to seek the services of a mechanism which has maximum security on the data stored (Geelan, 2012a, p.1). This is precisely what a cloud computer system offers. The cloud computer system has a remote server which stores all the data and applications used in the system. The remote server is also backed up by several other servers which ensure that there is redundancy. Therefore, there is no major problem when the data in one system gets lost. In addition to this, the data storage in a cloud computer system is in the internet, meaning that it is virtual. Since the storage is not physical, it is not prone to physical damage. This is a major factor which adds on to the usefulness of a cloud computer system (Kendall, K, 2010, p.1). The level of security in a cloud computer system is also very high. In fact, even the administrators of the system do not know which kind of data a specific client stores in the system. In addition to this, the access to the database is restricted only to authorized users by use of very much sophisticated accessibility measures which may at times be biometric in specific circumstances. Therefore, the security of the data stored in a cloud computer system is guaranteed. Another benefit of a cloud computer system is its reliability and efficiency. Provided that the access to the cloud system with respect to internet connectivity is not tampered with, an organization is guaranteed of efficient and reliable services (Knorr & Gruman, 2012, p2). The service providers ensure that they have the best software for a client to use in the system. In addition to this, the software is maintained and updated frequently so as to ensure that its users are able to get the best services from it. For this reason it is efficient to its client. As indicated earlier, the system does not have any contact with the physical world. For this reason it is not possible for it to get external interference which is a major factor contributing to its high reliability levels. Due to the above benefits of a cloud computing system it is very convenient to use it in accounting. Precisely, the accounting and finance sectors are some of the sectors which are using cloud computing by a large extent. In a cloud computing accountancy system, there are various types of accounting software that are hosed in the cloud. The category of cloud computing which offers cloud accounting is software as service model. With the rising cost of business operations, it has become of great necessity for the management to find the most appropriate ways of reducing costs (Murray, 2011, p2). One of the trends which have been adopted is the use of cloud computing, with accounting being one of the business operations done over the cloud systems. There are several reasons as to why cloud computing can and should be implemented in an accounting information system. One of the reasons is that a cloud computing system has a high level of security. Because of this, an organization is guaranteed that its financial records will not find themselves in the hands of unauthorized people. This is a major concern for many business organization is the modern business world (Romanki, 2012,p.1). This is because of the fact that unauthorized access of financial records is disastrous to an organization especially if the information is used for the wrong motives. Another reason as to why a cloud computing system can be efficiently implemented in an accounting information system is because of the fact that accounting is slowly shifting towards being technologically based. Therefore, cloud computing is a boost to an organization it’s strive to embrace information technology in its operations. As at today, computerized accounting via the use of accounting software such as Quick Books is revolutionizing accounting. However, the use of computerized accounting requires the retraining of staff in addition to the necessity of having an accounting employee which is costly to an organization (Wagnerm, 2010, p.1). For this reason, a cloud computing system which has all the required accounting packages and applications can be very useful to an organization. In addition to ensuring that an organization is able to evade the costs of purchasing the accounting software, a cloud computing system ensures that the organization does not incur immense accounting costs. This is due to the fact that there are several applications in accounting systems which enable a client to get accounting analysis and results just by entering data into the application (Defelice, 2010, p.2). The applications, which are available on cloud computing systems manipulate and analyze the entered data with reference t accounting standards after which the results are provided to the client. In this way, it is possible for an organization to reduce do away with accountants and only remain with the required number. Benefits which an organizations will have in implementing a cloud computer accounting system includes: mobility where the access of financial records will not be limited to location, secure data storage and increased efficiency and reliability due to limited physical contact between the financial records and the physical world (Mcmillan, 2008, p.2). Therefore, a cloud computing system can be efficiently implemented in an accounting information system. In such a system, an organization may seek the services of a reputable cloud computing services provider. The organization should then give authorized staff access to the system. In conclusion, cloud computing is a very effective business strategy. This is due to its numerous benefits which have been discussed in the essay. One of the major characteristics of the system is its virtual existence. Since the system is not physical, its shields the operations of an organization using it from physical interference for example sabotage and data loss (Thomas, 2009, p.2). The security of the data and operations done in a cloud computing system is therefore upheld. There are various categories of cloud computing systems which have been discussed in the paper. Their differences are with respect to their location and also the type of services which they offer. At the end of the papper, the appropriateness of the implementation of a cloud computing system in accounting has been discussed. Due to the various benefits of a cloud computing system, its integration in accounting is a good business strategy. References Bettino, L. 2012. 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