Accounting Information System Supply Chain

Question: Discuss about theAccounting Information Systemfor Supply Chain. Answer: Introduction: This report is about the accounting information system of the local fruit seller shop Fruito. The company is using an information system for managing the information regarding the production, supply chain and all other accounting related activities. The order receiving and supplying of the fruits and vegetables are maintained by the information system of the company. The company is facing some potential risks regarding the use of the accounting information system. These risk factors will be highlighted in this report. Potential Risk Factors: The risk factors that are affecting the whole accounting management activities of the company are discussed in this section: Probability of wrong data input: It has been found that the employees currently operating the accounting information system are not properly aware about the computerized system. There is some probability of wrong data input in the system. Unauthorized access to the system: The system is not so secure regarding the access control. One unique id and password is used for maintaining the system in all level. This may hamper the usability of the system. Fear of computer virus attacks: The computer systems are connected to the internet. Furthermore, USB drives are also used in the computer systems. It has been found that the antivirus and firewall programs are used in the computer systems are not so effective for protecting the accounting information system from the potential hazards regarding the virus attacks. Data lost due to natural disaster: Natural hazards like fire, flood or any breakable damages are truly the potential risk of the accounting information. The database of the system is located at the companys premises. There is no backup database for the important information that is managing by the accounting information system. Any kind of natural disaster may be the reason of lost of the total data base of the information system. Impacts of the Identified Risk Factors: Identified risk factors Impact over the system Probability of wrong data input In case intentional or unintentional wrong input of data in the system may be the reason of wrong interpretation of the demand supply management of the company (Moghadam et al., 2013). This may affect the whole accounting information system negatively. The business decision of the company may be taken wrong due to the inefficient data analysis of the wrong data (Prasad Green, 2015). The product delivery of the company is dependent on the system; the wrong input of data might be the reason of wrong delivery of data. Unauthorized access to the system The access control of the system is not so efficient. The users of the system can login one unique ID and password which means anyone can altered the data of the system. In case of wrong handling or alteration of the data the business decision making process of the company may be hampered in a high level (Soudani, 2012). All the details of the product delivery and supply chain management of the company can be controlled by the system. Therefore, unauthorized access into the system is too dangerous for the companys business. Fear of computer virus attacks The computer virus can attack in the computer systems of the company, which can hamper the database system or the normal procedure of the system. The control over the data regarding the business operations of the company can be lost due to attack of the computer viruses (Hall, 2012). Data lost due to natural disaster As the system is running over a standalone database located in the companys workshop, any kind of natural disaster can damage the database physically. All the data of the company may be lost due to this (Abbasi, 2014). Table 1: Impact of the risk factors (Source: Created by author) Recommendations Regarding Internal Controls of the Company: After identifying the risk factors and their potential impacts, some recommendations are given in this section for improving the internal control of the accounting information system of Fruito. Employee training: All the employees of the company need a basic training regarding the handing of the information systems and the particulars of the accounting information systems used by Fruito. This will be an efficient step for minimizing the risks regarding the improper use of data and operations of the system (Domeika, 2015). Access control defining in the accounting information system: The system security need to be improved. Different access control need to be used for different level if employees of the organizations. In the new access control level, the lower level employees should be able to insert data only. Data alteration capacity should be kept at the higher management level (Onaolapo Odetayo, 2012). Strong antivirus software and firewall installation: Updated antivirus programs and firewall programs need to install to protect the whole network of the company from the updated virus available in the internet. This will also prevent the probability of external attacks or hacking into the system (Peltier, 2013). Cloud database using: The company should use a cloud database for preventing the important data from the natural disasters and physical attacks. Summary of the Report: The summary of the overall report is represented in the table given below: Risk Factors Impact Recommendations Wrong input Decision making error Employee Training Access control Misuse of the system Proper access control establishment in the system Computer virus Lost control of data and control Installing strong antivirus and firewall for the network and the computer systems of the company Natural disaster Data lost Using the cloud database for storing the data of the accounting information system Table 2: Summary of the Report (Source: Created by author) Conclusion: At the end f the report it can be concluded that the accounting information system using by Fruito has some serious problems that is hampering the business operations of the company. The inefficiency of the employees and some sections of the accounting information system have some serious issues. The impacts of the risks have been analyzed and some suggestions are given for the internal control of the company. The recommendations will definitely help the company to improve their business operations by the efficient use of the accounting information system. References: Abbasi, H. (2014). Role of Management Accounting Information System in Organizations.Journal of Business and Technovation,2(1), 96-102. Domeika, P. (2015). Creation of the Information System of Enterprise Fixed Asset Accounting.Engineering Economics,60(5). Hall, J. A. (2012).Accounting information systems. Cengage Learning. Moghadam, H. M., Akhavansaffar, M., Bakhshaei, Z., MirHosseini, S. Y. (2013). Effect of investment in information technology system on providing desired services of accounting information system.Elixir International Journal A,55, 13268-13273. Onaolapo, A. A., Odetayo, T. A. (2012). 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