Accounting Information - Article Review

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Article Review

Journal of Accountancy

UMUC

Accounting Information Systems 326

Professor T. Wood

December 4, 2011

Cloud Computing: What Accountants Need to Know, (Journal of Accountancy, Oct 2010). This article answers the questions that Accountants and CPA should be asking themselves in regards to the new technology that is growing fast. Cloud technology is growing so fast that, cloud services revenues were expected to surpass $68 billion dollars in 2010, which was almost a 17% increase over 2009 revenues. Cloud computing is like e-commerce but considered more cost effective because it reduces the need for a business or companies to have full IT department, purchasing software or maintaining on site systems. This article goes on to explain the benefits and risks of doing business in the cloud. Benefits are that, the implementation process can be done very quickly especially if a business has multiply locations. The initial costs are usually low because vendors offer their services to multiply customers that share in the cost. In most cases there is little or no cost for hardware or maintenance cost because the vendor takes care of maintaining the software and servers. As for the risk, businesses need to analyze the applications and options offered by the various cloud vendors and determine how they would fit within their current IT systems. Security and reliability have to be taken into consideration as well, especially if all of your data is being stored in a cloud with other entities. The AICPA has established guidelines that provide “a highly specialized examination of a services organization’s internal controls.” There are 3 different types of reports that are posted for free on various websites. Until this article I didn’t really understand the information I was hearing about cloud computing and what it meant but after reading this article and comparing it to the system information in our book for class, I have a better understanding. I agree with the author of this article that accountants and CPAs need to know about the effects cloud computing applications will have on accounting information systems of the future. This article matches the material we are covering in class and how accountants need to be aware of the benefits and risk of cloud computing. Interestingly enough, I could not find anything in the book about cloud computing as it relates to e-business or e-commerce or just doing business on the World Wide Web. Cloud computing should be a topic covered in future accounting information system classes and text books. From this article, I have determined the same processes used by an IT governance committee to elevate new IT systems can be used in consideration to switching to cloud computing applications. The benefits are considerable when you take into consideration eliminating the cost and investment of purchasing software, running and maintaining servers. By cutting the cost of maintain space for severs, maintain software and the continuously upgrading to protect and secure the systems business can have IT personnel focus on more strategic objectives within the company. Other benefits reported are the implementation process for applications to be up and running within minutes not weeks or months. Vendors of cloud applications can offer lower fees because the cost of the infrastructure is shared by others. Completing an actual cost comparison for a company having to maintain expensive licensing fees and extra servers for data storage to the cost of using cloud computing applications would be like comparing apples to oranges. As mentioned in our book, companies need to find ways to protect data from nature disasters and have continuity of operation plans in place to keep e-commerce business secure, confidential data protected and the system available for customers on a regular basis, Cloud vendors take on that responsibility for their clients....
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