MANAGING THE MOVE TO THE CLOUD-ANALYZING THE

RISK AND OPPORTUNITIES OF CLOUD-BASED AIS (CASE

STUDY)

Course Title: Accounting Information Systems

Course Code: ACN441
Section: 01

Submitted To: MR Naveed Adnan

Submitter By

Name: MD Naimur Rahman

ID:1821616
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EXECUTIVE SUMMARY

According to this case study, a solo owner of a small pharmaceutical firm has been
suffering from the workload of all the accounting operations that she has been conducting
on her own from the start of her business. Despite the fact that she does not come from a
business background, she has done her accounting chores extremely well. She just
recognized that she should devote more effort to the heart of her firm. So, in order to
reduce her burden, she considered implementing a cloud-based accounting information
system for her firm.
Cloud computing is a type of on-demand availability of computer system resources,
particularly data storage and computational power, without the user's direct active
administration. The word is commonly used to characterize data centers that are
accessible to a large number of people over the Internet. It can free up a lot of time for
her to focus on the core of the business rather than accounting administration. The goal of
this research is to learn about the importance, benefits, and hazards of cloud computing in
accounting information systems.
In this case, I attempted to address some questions that would help the reader learn more
about cloud computing, its role in business, advantages, security threats, and risk
mitigation, as well as whether or not pricing is an essential element in choosing a cloud
system. These case study solutions can assist the reader in developing his or her firm
through the appropriate usage of cloud computing for accounting operations.
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TABLE OF CONTENTS

Executive summary.............................................................................................................1
Case Study Question
1. Which cloud-based accounting information system should Pia select and
why?..............3
2. Should Pia be worried about possible lock-in with either accountant or system
provider?..........................................................................................................................3&4
3. How should Pia mitigate the possible data security
risks?..........................................4&5
4. Is price an important factor when choosing the system?............................................5&6
5.What is the optimal division of work between Pia and the accountant? Should Pia
outsource all the accounting tasks, use selective outsourcing, or keep all tasks to herself?
Evaluate each accounting task on their suitability to outsourcing in the cloud context. Use
Table A1 provided in Appendix and discuss the implications of your choices………….7
6. How to ensure a good fit between the selected system and the work arrangement? …
7&8
7.What are the transaction costs incurred by the decision?...............................................8
8. What about long term strategy? Reflect on the implications of your choices in the
future?...............................................................................................................................8
9.References…………………………..…………………………………………………9
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1. Which cloud-based accounting information system should Pia select and why?

ANS: Based on Pia's circumstances, she should choose System 3 since it features a very
efficient interface geared toward accountants. This system includes all of the
infrastructure required to host web apps, such as storage, web, and application servers.
This technology also serves as the foundation for a cloud-based accounting system,
increasing the pharmacy's flexibility, scalability, and dependability. Pia has concerns with
financial administration activities since they take up much of her important time with a
rising workload; implementing the third system will free up her time, allowing her to
focus on the core of her firm. Although this system has a higher monthly pricing of €150
than the other two systems, it does not have any transaction fees. Which is appropriate
given Pia's present inability to pay rising service costs, and accounting firms have a larger
consumer base than Pia's drugstore. Furthermore, the provider is highly reputable, having
been in business for 30 years, and is based in Finland, which means that their accountants
are likely to be familiar with Finland's accounting standards and tax regulations, as well
as be highly competitive in the current Finland accounting market. Pia is also promised
two hours of accounting services every month, which offers her a sense of control over
the accounting process because she can pick which chores to outsource and will be able
to interact with the accountant from any place. using the internet This will be very useful
in resolving Pia's payroll processing problem since she will be able to assign jobs to the
accountant and ensure they are completed to her standards. Overall, Pia is most suited to
System 3 since she can use many of the characteristics to benefit both herself and her
company.
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2. Should Pia be worried about possible lock-in with either accountant or system
provider?
ANS: Pia should not be concerned about contractual obligations with accountants or
system suppliers. She was concerned about the security and privacy of her data because
all of her data and tools were on the cloud. In such situation, she can choose private cloud
to ensure that all data and cloud implementation, such as SaaS, PaaS, and IaaS, remain
within the corporate IT. As a result, she would not have to switch system providers. In
addition, while selecting a system provider, pia should consider their company health,
financial health, risk management, and the supplier's ability to certify compliance with all
of your criteria through a third-party audit. It must produce a performance report. It must
be technologically capable. A complete security architecture should be in place for all
levels and types of cloud services. If Pia chooses her system provider based on the
availability of these items, she will not have to worry about switching providers. The
third system is also linked to an accounting service. Pia will be using the cloud system,
therefore there is no need to hire an accountant. The cloud system is completely
automated.

3. How should Pia mitigate the possible data security risks?

ANS: Private cloud services are a solution that implements all levels of cloud
architecture and provides a high level of service control, security, and data privacy.
However, it is costly, and the corporation is responsible for maintaining, deploying, and
operating the system.

Data Security and Control: Service providers must be able to prevent, detect, and respond
to various security breaches. On a daily basis, service logs and service agreement
conditions are inspected. Again, some validity checks are necessary for Pia's business to
avoid security breaches due to harmful data in the cloud, such as cross-site scripting,
insecure configuration, SQL injection problems, and weaknesses in access control rules
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inside the company. For pia's company, service providers should provide transparent
services (controls, security, and operations).

Network security: Using a correct firewall setup and allowed access privileges, a secure
system may prevent illegal data alteration and access. Pia's service providers must
conduct tests and check network security by employing several well-known security
techniques, including as SSL, session management, and packet analysis, to prevent active
sessions from being hijacked and access to customers' credential data. To safeguard data
transmission, several policies should be enforced in layer three switches and routers.
Control is another crucial element that governs communication between mobile
consumers and cloud service providers.

Data Integrity and Confidentiality: Appropriate authentication and permission

mechanisms should be implemented to prevent the unauthorized disclosure and alteration
of data. For a developer to safeguard and limit usage of data, the service development and
deployment types (Private, Public, and Hybrid) must be explicit.

Data and service accessibility: When sending data and applications across the network,
connection and Internet speed should be available. Network service providers should
monitor network load or traffic to ensure effective load balancing and data dissemination.
Data restoration processes also need standard data replication and backup protocols that
give auditable confirmation of the data's correctness and completeness throughout time.

Access Control: Pia’s service providers should prove that they have proper and accurate
security mechanism to protect unauthorized access. All access or changes in cloud
services (resourcesand data) provide auditable report whether it is success or fail and it
needs to be reviewed along with monitoring to be performed in a daily basis. To manage
and run the infrastructure and corporate data, however, Pia can also utilize the private
cloud deployment approach. This deployment model's main objective is to maintain a
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constant level of privacy and security. Alternately, she can choose a mixed deployment
technique.

4. Is price an important factor when choosing the system?

ANS: Yes, cost is a crucial consideration when choosing a cloud solution for Pia's
pharmacy. It is clear that Pia needs to consider the cost of the cloud service given the
scale of its operation. However, she must pay the service provider a significant sum of
money if this expense is going to increase the productivity and expansion of her firm. Pia
has encountered several issues with financial procedures. Since she had to spend more
time on accounting procedures, she has been suffering from a lack of time she could
devote to the expansion of her firm. For instance, payroll procedures may be affected by
employee turnover as nine out of sixteen employees work part-time. Again, her lack of
business experience might result in ineffective accounting responsibilities. Since it is
essential to perform each calculation with attention in order to determine the appropriate
tax to be paid. Pia has to be aware that cloud-based account information systems can be
economical while keeping these points in mind. It will provide Pia more time to focus on
her main company activities rather than accounting procedures. When picking a system
for her company, she must consider both cost and profit. She discovered that there are
fixed fees, software licensing, monthly service expenses, and some more hidden costs in
cloud-based accounting information systems. Due to the fact that the whole service is run
on the service provider's servers, cloud computing is associated with cheaper prices.
There is no expensive software investment because it operates in software. Pia also has
the option to pay as she goes. However, pia must consider which service provider would
be more advantageous for others in terms of price and effectiveness. The more money pia
spends on a cloud-based accounting software supplier, the more accurately and
successfully the accounting chores may be completed. Pia should consider her company's
efficiency rather than cost as accounting is a complicated and challenging system to
operate. Finally, given that Pia's firm is tiny and competitive, we may conclude that
pricing is a significant and crucial aspect. She can't handle the task alone, therefore it's
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best to pay a reputable service provider so she can devote more time to the business's
main functions rather than accounting procedures.

5. What is the optimal division of work between Pia and the accountant? Should Pia
outsource all the accounting tasks, use selective outsourcing, or keep all tasks to
herself? Evaluate each accounting task on their suitability to outsourcing in the
cloud context. Use Table A1 provided in Appendix and discuss the implications of
your choices
ANS: Because Pia had only ever worked in her speciality pharmacy and had never
received any training in accounting or business. This means that a professional
accountant, who is unquestionably superior than these pharmacists, is given the
responsibilities that require extremely sophisticated accounting knowledge. A qualified
accountant may make the entire procedure more effective. She has control over the
circumstance at the same time. Trust accountants to a certain extent. I believe Pia should
employ judicious outsourcing. As was already indicated, you should assign outsourced
accountants to tasks in which they are weak because they are better qualified, but they
must also maintain overall situational control. Accounting system powered by cloud
computing ideal for sales, purchases, payments, and salaries. Report, however, does not
refer to Cloud. Given that the first demands extensive professional technical expertise,
the effort will be considerable. The workload will be significantly reduced by using cloud
computing.

6. How to ensure a good fit between the selected system and the work arrangement?
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ANS: The elements covered below should be assessed in order to provide Pia with the
best value in order to make sure that the choose system and the work arrangement mesh
well. As a result, the chosen system should either match Pia's workload or have the
capacity to be customized to meet her expectations and desired work arrangements
The cloud-based accounting solution ought to help Pia achieve her goals, i.e., improve
productivity and lessen her workload for accounting duties. Additionally, the system
must to adhere to Finland's accounting laws and norms. It should also accommodate Pia's
workload and management preferences, since it can be presumed that Pia will want to
oversee system administration given that she manages all financial activities.
Since Pia's company deals with a lot of personal information, it must adhere to a number
of rules and duties to protect the privacy of that information. When it comes to how her
company's data is handled, saved, and maintained on the cloud system, Pia should make
sure the system provider provides her options and control.
The chosen system should adhere to Finland's accounting rules and laws, but because
system 3 is based there, there shouldn't be any problems. With 30 years in the industry,
the supplier is probably well-aware of what firms require in terms of accounting services.

7. What are the transaction costs incurred by the decision?

ANS: The transaction cost is €0.95 per transaction. (Sales, purchase invoice, payment,
and VAT calculation) The chosen system is System 3, which starts at $150 per month and
includes two hours of accounting services. If Pia requires further accounting services, the
fee will be roughly $65 per hour.

8. What about long term strategy? Reflect on the implications of your choices in the
future?
ANS: Pias' primary incentive for moving to a cloud-based system is to free up time for
her to focus on strategic planning for her business rather than accounting. As a result of
switching, one of two things can happen: 1. the system outperforms her prior one,
allowing Pia to dedicate more time to her company's long-term goals; or 2. the system
underperforms, forcing Pia to return to her previous or other system. However, because
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she took a flexible strategy, she could easily change things up if scenario 2 occurred.
Choosing system 3 gives Pia a fallback plan in case things don't go as planned.

REFERENCES

 RoyChowdhury, R. (2014, June). Security in Cloud Computing. In IJCA (Vol. 96,

No. 15, pp. 24-30).
 Asatiani, A., & Penttinen, E. (2015). Managing the move to the cloud–analyzing
the risks and opportunities of cloud-based accounting information systems.
Journal of Information Technology Teaching Cases, 5(1), 27-34