Topic 18: Use of Technology in Accounting Flashcards
What are the Advantages of Accounting Software/Spreadsheets? (9)
SPEED: Data is entered and processed very rapidly, much faster than in a manual system.
ACCURACY: It is improved since data is only entered once and documents are updated automatically. In a manual system, data may have been entered twice or more.
CAPACITY: An accounting software can store millions of transactions without requiring too many resources. Also data can be easily retrieved from the information stored. Documents can be shared online, or scanned and saved, reducing filing space.
EFFICIENCY: Large volumes of data can be processed quickly; therefore fewer accounting staff are needed.
DATA HANDLING: Information can be stored or retrieved from any location and management can effectively process data for decision-making purposes. Accounting software also enables the easy and fast production of various reports regularly for management purposes in report form. A system connected to the Internet can make financial transactions electronically
SECURITY: Passwords restrict unauthorized access and use of sensitive information.
INCREASED JOB SATISFACTION: from learning new skills, doing things faster, and avoiding tedious repetition.
DOCUMENT PREPARATION: Documents such as invoices, credit notes, statements, and remittance advices can be produced easily and quickly.
UPDATED DATA Records are updated in real-time, so they accurately reflect customers’ accounts as well as inventory records. This enables remedial action to be taken (if necessary). In addition, payroll records as well as ratios are accurately calculated.
What are the Disadvantages of Accounting Software/Spreadsheets? (6)
- COST: installation can be expensive. Ongoing maintenance and updating costs can also be high. Also staff need to be trained to use the system. This will increase training costs.
- TECHNICAL PROBLEMS: Bugs and viruses cause systems to crash. This may cause severe problems such as delays and loss of data. Also a system downtime can be very disruptive. Data backup at regular intervals is essential.
- INDUSTRIAL RELATIONS: If staff regard computer systems as a threat to their jobs, they might not co-operate with management when new systems are installed. This causes delays and friction between management and staff. Also staff can be resentful of a new system.
- SECURITY: Security measures are vital i.e. passwords for staff and protection against viruses and hacking. Fraudulent access can seriously affect the business’s operation and its profitability.
OPERATOR ERROR: Computer systems are effective only when data is correctly input. If inaccurate data is entered, the reports generated will be of little use. This is the GIGO problem (garbage in, garbage out).
HEALTH RISKS: risks associated with the use of computer keyboards :and screens i.e. eyestrain, back problems due to poor posture and muscular fatigue in the arms and wrists from keyboard use. Regular intervals away from workstations are essential.
What are the issues regarding the security of data? (3
DATA LOSS: Data must be saved regularly and protected against data loss. It must be stored by different methods on a hard disk or a memory stick. The storage devices can be encrypted or password-protected. Also, it is vital to back up data on the system at regular intervals and have the option to restore data if required.
ACCESS: Staff working on computerized accounting systems are allocated passwords that restrict access to their area of work. Passwords should be changed regularly to help prevent the possibility of unauthorized people accessing the system. Most systems have packages to resist viruses and attacks by hacking.
CONFIDENTIALITY: All organizations regard their financial information as sensitive. They want their financial information to remain confidential, except when legislation demands that certain information is made available to external bodies. Preventing unauthorized access to electronic accounting data is vital.
What is hardware?
Hardware is the physical aspect of the computer. These include the monitor, keyboard, mouse, data storage area (hard drive), graphics card, sound card and mother card
What is Software?
Software are the data and instructions that are sent to the hardware that allows the computer to act in the way you want it to. This includes the operating system and the computer programs that you want to use,
What are some methods of protecting data? (5)
Install a firewall Helps to control the information that goes to and from the computer. It can block intemet traffic based on the security features selected.
Install antivirus software Search, detect, and remove any possible viruses on the computer and prevent new viruses from damaging files.
Install anti-spyware software Stops programs such as malware from being installed on the computer. Malware allows other users to look at work and may allow someone else to take control of the computer.
Use complex and secure passwords Make password contain upper and lowercase letters, numbers and symbols. Never write down passwords and change them regularly.
Check the security settings on your internet browsers Set intemet zone security to high or medium.
