Question

Evaluate whether the most significant failure occurred within the system design, implementation, or operational phase of the process. Indicate what the company could have done to avoid the failed outcome. Provide support for your rationale.

Answer 1

• An accounting system can have many changes. First one can related to changes of regulatory practices or changes to accounting policies, and the second can be changes of an accounting system of the risk avoidance and the implementation of internal controls. Note that, the changes in accounting polices requires a reflective effect to be brought about. It is very vital to know that accounting information is consistent according to the past information so that it becomes comparable for the company itself and for the other companies. The change of the accounting policies may be due to the requirement of the company, or the requirement of the accounting regulation.

• With the passage of time, the accounting regulation has changed, and the main reason for the changes is evolution of knowledge the circumstances of the corporations and the general environment of the business in which the firms function. Frauds and misstatements are the reasons that regulators tend to put stricter measures for bringing the whole business sector in a consistent state such that the information is comparable with each other and most importantly theinformation is true and fair. Therefore, information should be true and fair, and behind this, there are complex accounting calculations and regulations.

• It is important to know that accounting regulation drives an accounting system. For example, a company may select an unsuitable policy regarding the depreciation,and for this tha company needs to check the International Reporting Standards, or the local reporting and accounting standards. If the changes are not recommended or if they are not restricted, the company should implement them. However, the valuation of assets requires that guidelines should be followed, and that companies must value assets according the generally accepted accounting principles or the local regulations, and the obedience is necessary. The balance sheet of a company can be affected by the lack of compliance which may result in over/undervaluationof the asset. Also, the nature of the information does not remain true and fair anymore. The information become manipulative and the true material of the transactions can be hidden.

• A different array of controls is required by computerized systems. For instance, the computerized system cannot implement the traditional internal control of segregation of duties; the documents, invoices, or requisitions cannot be signed in a tradition way. However, research stated that documentation can be done on paper despite of the computer use, and the computerization does not mean that the company should avoid any type of paper work. The information from the computer can be printed and signed in case of authorization as in the case of requisitions, invoices or other documents.

• In order to stored data on computers, the prevention form, the physical access, and the remote access is required. A physical prevention can be made by restricting access and enabling asingle entrance to the system, where only an authorized person should be allowed to enter. Companies have to rely on the application controls because they cannot prevent the remote access in case of computerized systems. The safety of data have two implementations required, one of which is the prevention from the deliberate and intentional efforts to access or hack the data, and the second is the maintenance of the data on computer is the most safest way.

• The most important equipment for storage in an accounting information system is the computer storage device. Also, the weather conditions, flood, or fire or any other casualty can cause damage to it, and the result in permanent loss or damage to the system. To implemented safety controls, data can be stored on computers, therefore the safety controls can ensure that the data is kept safe at the organization and prevented from the deliberate and the unintentional accidents. Research showed that the intentional accidents can entirely damage the data; in a way that the loss can exceed the expectedloss can expect loss from the thoughtful access.

-->> Evaluate how implementing best practices would have reduced the chances failure. Provide support for your rationale.

• Implementing checks on systems reduces the chances of failures. The checks on a systemprevent the risks to be happening and the checks are referred as the internal controls. To prevent a companies from risks, internal controls are implemented. Computerized- accounting system risks are one of the main risks that are implement and is serve as a purpose to apply internal controls within companies. Companies transfer their manual accounting systems to computerizedaccounting systems for various reasons and this includes the advantages, and the reason for using computerized accounting information is the instinct. Companies are known for adopting their competitor’s policies, and to keep up with the competitors, the competing companies adopt policies of their competitors. Recognize that many companies implement the changes to adopt the computerized systems because of the modest environment, and the other factors are the contemporary trends and the coordination. Companies have to transfer data when changes in the accounting systems occur and this migration can be made by transferring the existing ledges, customer information, the company information, and the expense into computerized system. The computerized system them centrally manages the information once put in the system, and it will not ask for the information again for two different tasks.