The Essay Explores Cloud Computing's Role In Accounting For SMEs. (70 Characters)

Write a report on the role of cloud computing for accounting in smes 1.

As per the views of Christauskas & Miseviciene (2012), small and medium enterprises are young companies and are rapidly influenced by the external market forces. The frequently changing external environment requires that the organization adopt their strategy with the global changes in the business, technology, and science. The economic viability of the business decisions also requires that the business get timely and appropriate information related to external business environment, which must be supplied by the accounting department of the organization. The accounting system collects and records the data regarding the events, which have an impact on the   maintenance, processing, and communication of different stakeholders. The accounting system plays a critical role to provide information for decision-making within the organization.

According to Marston, Bandyopadhyay, Zhang& Ghalsasi (2011), today, information technology has intervened all the aspects business operations and accounting operations are accomplished with the help of Information Technology (IT). With the growth and development of information technology, the traditional accounting systems cannot support the current business operations properly. The traditional accounting system or software is also not efficient in handling the accounting operations.

In the perspective of Gupta, Seetharaman, & Raj (2013), the recent trends in the IT are the use of cloud computing based accounting systems. The transfer of accounting information to the cloud based platforms is an innovative solution, which is a cost-effective solution to save the accounting information. The cloud based solutions works on the fundamental that the companies do not invest in IT infrastructure, but pays to specialized companies who can provide storage services for the services required at a specific time. The cloud can be integrated in e-mail, company website, and online storage.

Ruiz-Agundez, Penya, & Bringas (2012) have discussed that the investment in cloud computing is important as the companies can gain competitive advantage by offering value to the customers. The small and medium enterprises can respond to the changes in the technology instantly, as they are smaller in their size and operations. These companies have significantly less IT needs and can easily adopt new technologies. Small and medium enterprises can also easily deliver their operations to any third party as they have limited workforce to run their business.

According to Takabi, Joshi & Ahn (2010), the small and medium enterprises achieve several profits with cloud computing. There are several features such as reduced cost, enhanced security, response to business and relatively easy administration. These features have made cloud computing relatively easier to be used. The companies can reduce their expenses on hardware, software, and networking management. The cloud applications can provide high level of security to the customers. The web-based systems are highly secure and can provide better internal control than the in-house software solutions. The integration of these software applications with the system is very simple and the provider can upgrade their applications in a quick manner. The companies can also access different resources in a quick manner through which they can easily expand their business.

In the views of Rittinghouse & Ransome (2016), along with these benefits, there are several risks of the cloud computing business in the accounting software of the companies. Certain risk such as fear for safety, internet failures, control loss and dependency can adversely impact the efficiency of the cloud computing operations. Cloud computing can increase the risk in the privacy and confidentiality of the data. The primary aim of accounting is management of money and securing the information. The cloud computing can benefit the organization as it can store the information in a secure manner. However, it can also enhance the risk in the privacy and the confidentiality areas. In cloud computing, information is stored by the third party; therefore, there is high risk in security and privacy of the information.

Benefits of Cloud Computing for SMEs Accounting Systems

In the views of Chou (2015), there is also the issue of internet failure in the cloud computing. If the internet is down, the accountants and the managers cannot access the information at the exact time. However, in the accounting profession, the professionals need to access the relevant and important information at any available time. The companies also lose control over the information while adopting the cloud storage. The company loses its control over the data and becomes more dependent on the service provider to maintain, update, and manage the information.

As per the discussion of Dimitriu & Matei (2014), there are different types of accounting software, which can be used to store and analyze the financial information. There are several functions of accounting software, which can be used to analyze the financial information and assist the accountants. The foremost function of the accounting system is to collect and store data about the business activities and transactions. The system can collect data related to the source of information, it can record data related to different transactions and post data so that it can be easily accessible to different employees. Another function of accounting system is to provide beneficial information for decision-making. It provides information so that the managers can take proper decisions in the business. The information includes reports, financial statements, or managerial reports. The accounting system also provides control to ensure that there is accurate recording and processing of data. The system should ascertain that the information accessed by accountants and managers is reliable and keeping the business assets safe. There are also various accounting systems, which can produce forecast for the future conditions. These systems can produce financial statements and financial budgets for the future.

According to Kaufman (2009), properly designed accounting system can address the different requirements associated with accounting such as transaction processing, control specification and financial statement preparation. The accounting system of the organization can provide information related to production, marketing, supply chain and human resources. The information collected through the accounting system can assist the managers to plan and control the operations and provide reports to the external parties.

Subashini & Kavitha (2011) have analyzed that although the traditional accounting system does not support the accounting operations of the business properly, there are certain reasons, which hinder the smooth operations of the organization such as the traditional system may not administer the information properly or present detailed information to the accountants. The system may not incorporate the requirements of the changing laws. There should be possibility that the system can be optimized as per the latest laws and the changes in the market.

The cloud computing software has many opportunities for the small and medium enterprises. The cloud service provider can offer companies to manage different customer accounts online. It can be provided as Software as a Service (SaaS) to the customers.

The primary aim of the research is to examine the importance of the cloud computing services for the accounting system used by SMEs in Australia. The cloud computing is a novel technology which can be used by different companies to increase their cost-efficiency and productivity. The present report aims to examine the benefits of cloud computing for the accounting software used in SMEs in Australia. The aim of the research project is:

• To examine the role of cloud computing in the accounting software
• To assess the benefits of cloud-computing based accounting software for SMEs
• To identify the challenges associated with the implementation of cloud computing accounting software

Risks of Cloud Computing for SMEs Accounting Systems

The present research aims to identify the challenges and the benefits associated with the implementation of cloud computing software for SMEs. The research question for the project can be framed as:

• What are the benefits of cloud computing accounting software for the SMES?
• What are the challenges or risks associated with the implementation of cloud computing software in SMEs?

It is proposed that the present research will address the research questions through the medium of primary and secondary research. The research process is a lengthy process and requires time. Therefore, a research plan is proposed which can guide the researcher regarding the time window required for different aspects of the research. The gantt chart presented below outlines the major activities required in the research. It also shows the time required to perform each of the activity in the research process. Firstly, the researcher will collect all the relevant background information for the research. Then, the research questions, aims, and objectives will be framed. The researcher will conduct a literature review and later on, a survey will be conducted. At the sixth month, the research study will be concluded.

The research methodology is one of the most important function of the research process. The results and the direction of the research study are influenced by the choice of research instruments. The data will be collected with the help of primary and secondary research methods. The primary research methods refer to those methods, which collects the data exclusive for the research study. This data is not collected prior to the research process and is collected by the researcher. In the present research, the data collection method of survey will be taken. The research subjects will be the financial managers in SMEs in Australia. A questionnaire will be rotated with the help of email and the research participants will have to revert in a stipulate time (Smith, 2015). The survey method is used, as it is cost-effective and can be conducted in a little amount of time. The secondary data will be collected with the help of literature review method. In this method, relevant information will be collected by analyzing published articles of eminent authors. To maintain the authenticity and credibility of the research project, the secondary information will be collected through books and journal articles (Whittemore, Chase & Mandle, 2001). Unreliable data sources such as blog articles and Wikipedia will be avoided.

The data will be analyzed through graphical analysis method. The sample size of 100 is determined for the research. The research participants will be selected with the help of random sampling. In this method, the selection of the candidates is on pure random basis such that they can represent an entire population. Ethics will be followed during the survey (Ryan, Scapens & Theobald, 2002). The participants will have to fill a consent form wherein they will be informed of the aims and objectives of the research. The personal information of the candidates will be protected with utmost secrecy.

References

Chou, D. C. (2015). Cloud computing risk and audit issues. Computer Standards & Interfaces, 42, 137-142.

Christauskas, C., & Miseviciene, R. (2012). Cloud–computing based accounting for small to medium sized business. Engineering Economics, 23(1), 14-21.

Dimitriu, O., & Matei, M. (2014). A new paradigm for accounting through cloud computing. Procedia Economics and Finance, 15, 840-846.

Gupta, P., Seetharaman, A., & Raj, J. R. (2013). The usage and adoption of cloud computing by small and medium businesses. International Journal of Information Management, 33(5), 861-874.

Hasson, F., Keeney, S., & McKenna, H. (2000). Research guidelines for the Delphi survey technique. Journal of advanced nursing, 32(4), 1008-1015.

Kaufman, L. M. (2009). Data security in the world of cloud computing. IEEE Security & Privacy, 7(4).

Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J., & Ghalsasi, A. (2011). Cloud computing—The business perspective. Decision support systems, 51(1), 176-189.

Rittinghouse, J. W., & Ransome, J. F. (2016). Cloud computing: implementation, management, and security. CRC press.

Ruiz-Agundez, I., Penya, Y. K., & Bringas, P. G. (2012). Cloud computing services accounting. International Journal of Advanced Computer Research (IJACR), 2(2), 7-17.

Ryan, B., Scapens, R. W., & Theobald, M. (2002). Research method and methodology in finance and accounting.

Smith, J. A. (Ed.). (2015). Qualitative psychology: A practical guide to research methods. Sage.

Subashini, S., & Kavitha, V. (2011). A survey on security issues in service delivery models of cloud computing. Journal of network and computer applications, 34(1), 1-11.

Takabi, H., Joshi, J. B., & Ahn, G. J. (2010). Security and privacy challenges in cloud computing environments. IEEE Security & Privacy, 8(6), 24-31.

Whittemore, R., Chase, S. K., & Mandle, C. L. (2001). Validity in qualitative research. Qualitative health research, 11(4), 522-537.