Question

How will cloud based technology impact financial statement auditing? Pros and cons?

Answer 1

CLOUD BASED TECHNOLOGY   

Cloud based technology helps the people to use the digital resources stored in the computer network. It removes the barrier of location , by allowing the people to share information & applications across the internet. Mainly there are three types of cloud computing, they are :

1. Infrastructure as a service
2. Platform as a service
3. Software as a service

CLOUD BASED AUDITING

Cloud auditing is the process of specification for the presentation of information about the cloud service provider and addressing of control frameworks. A cloud auditor is a person , who performs an independent examination of the cloud service providers.Cloud accounting software is a software , where the datas are stored on external servers ,remote.

IMPACT OF CLOUD BASED TECHNOLOGY IN FINANCIAL STATEMENT AUDITING

Use of IT in the business fields many achievements in those sectors like data storage accessibilit, effective storage etc. While , computing applications can be outsourced to external service providers resulted in the occurance of risk related factors. Computing on the cloud involves the provision of IT services using a shared infrastructure.Cloud computing helps a convinient and on-demand network access to shared computing resources. It enables the company's to reduce the cost of data storage and processing.

Even after considering all the above good qualities of cloud based computing there are few matters have to take in to consideration; As user companies increasingly depend on the cloud vendors, it is tough that there be adequate standardization in cloud computing storage and applications.

The influence of cloud computing on audits is significant. It has significant impact on the accounting profession, because there are many security risks exist. Such risks are still remain the same, because it cannot be addressed by the known measures for proper control and audit in these environment.

With the cloud computing method companies can reduce thee size of their data centres, and also can eliminate the unwanted costs on that. Along with that there will be a reduction in softaware cost, and reduction in number of staff reduces IT costs also. It helps to make improvement in the IT capabilities.

ADVANTAGES AND DISADVANTAGES OF CLOUD BASED AUDITING

- ADVANTAGES OF CLOUD AUDITING

• Cloud computing helps in reducing the capital expenditure
• Helps in fraud detection, cost reduction and revenue maximization
• Helps in data governance and ensures quality
• Helps the users to access datas from anywhere with an internet connection
• Allows the people to work from anywhere, provides flexibility for small and large enterprises.
• Security in data storage.
• Cost benefits .
• Quick and smooth functionning of auditing, since there is no need to attach large files to email

_ DISADVANTAGES OF CLOUD COMPUTING

• Additional charges incurred for exceeding the threshholds and allowances of band width.
• Since the users companies depends cloud vendors at a large, it is tough that there be adequate standardization in cloud computing softwares.
• The price of cloud computing may be influenced with the amount of data storage and users.
• Since the datas are stored on external parties, the reliability of auditing of statements will be questinnable and under risk.
• Although the cloud storage servers is best in security, It doesn't mean they are invisible. So there is risk of data theft.