Current Issues in Technology

The accounting practice you work for is embarking on a project to move all clients onto a new cloud accounting system. This new system will integrate with new practice software to automate much of the coding and processing of client information and automatically produce draft financial statements. The partner in charge of the project explains this will allow the firm to automate all recording and processing of transactions for clients. The first review of the processed data will be completed by an outsource provider based in India. This will identify any errors in the coding and complete any balance day adjustments needed. Your firms qualified staff will review the adjusted information, make any adjustments or corrections and then finalise the financial statements.

Currently, more than half of clients either do not process their transactions electronically (they provide your firm with hard copy source documents which the firms staff record and process) or provide access to their accounting systems for the firms staff to run. The partner in charge of the project explains that as clients do not care about the controls that exist in their reporting systems the accounting practice does not need to be concerned about the controls in the system used. Your firm currently employees a team of 6 unqualified staff to record and process the hard copy documents and operate the clients accounting systems. The partner explains that they need not be concerned about the control system the cloud accounting system provides as most clients do not understand or care about the controls exercised in the system.

Required:

Identify and briefly explain the issues that the move to cloud accounting and outsourcing could create for:

(a) Clients (List and explain 4 issues)

(b) Your accounting firm (List and explain 4 issues)

(c) Accounting firm staff (List and explain 4 issues)