Scribd
Upload
16 views3 pages

Ict and Accounting

The document discusses the use of Information and Communication Technology (ICT) in accounting, highlighting its benefits such as increased accuracy, speed, and security, while also noting limitations like high initial costs and risks of data loss. It also emphasizes the advantages of using spreadsheets for payment tracking and data visualization, along with security issues related to data loss and access. Finally, it outlines methods for preventing data loss from hardware and software, including backup strategies and cybersecurity measures.

Uploaded by

5814
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
16 views3 pages

Ict and Accounting

The document discusses the use of Information and Communication Technology (ICT) in accounting, highlighting its benefits such as increased accuracy, speed, and security, while also noting limitations like high initial costs and risks of data loss. It also emphasizes the advantages of using spreadsheets for payment tracking and data visualization, along with security issues related to data loss and access. Finally, it outlines methods for preventing data loss from hardware and software, including backup strategies and cybersecurity measures.

Uploaded by

5814
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

The use of Information and Communication Technology (ICT) in recording

transactions and preparing financial statements.


With the decrease in the cost of computers and software required, increasing numbers of
businesses have computerized their accounting function.
ICT can be used to:
a) Prepare source documents such as invoices
b) Record accounting transactions from source documents
c) Entering data into various books of prime entry
d) Automatically prepare control procedures such as control accounts and trial balance
e) Preparation of financial statements.
Benefits of ICT accounting systems
i. They utilize the single entry of accounting transactions with simultaneous updating of
accounting records. e.g. when a sales transaction is entered in the revenue day book, it
automatically updates the ledger accounts.
ii. They provide increased accuracy of accounting data as errors are minimized by the
software used. Arithmetical errors due to manual accounting can be eliminated.
iii. Accounting software is faster in comparison to processing data manually.
iv. Information is provided in a timely manner because the system can generate financial
reports whenever required. This helps to improve decision making.
v. The security of financial information will be improved as passwords are required in order
to access the information.
Limitations of ICT accounting systems
1) The initial capital cost of the hardware and software might be too high for many small
businesses. In addition, the hardware and software may become outdated quickly
requiring more expense.
2) The cost of maintaining the system may be too high – staff will need to be trained and
the software updated regularly.
3) There is significant risk of data loss if the system fails and back-ups may not be
available. Security breaches may occur.
4) Not all errors are removed. There is need for expert staff to handle these.
5) Staff morale may be affected with the introduction of computerized systems as a threat
to their job security.

BENEFITS OF USING SPREADSHEETS IN ACCOUNTING

a) Easy payment tracking - While small business owners and those new to accounting
can find it difficult to track payments, spreadsheets offer a simple solution.
- Spreadsheets are commonly used to analyze money that has been spent and
income that has been received. They allow you to split the amount of money you
have spent and received by time period and source. For example, you can separate
out different types of expenditure such as rent or insurance, and track exactly how
much can be spent on these in each month, by using a simple table.

1
b) Build great charts
Excel allows business users to unlock the potential of their data, by using formulas
across a grid of cells. Data is inserted into individual cells in rows or columns, allowing it
to be sorted and filtered, and then displayed in a visual presentation. Using pie charts,
graphs and clustered columns adds meaning to data, which otherwise may just exist as
row after row of numbers. These visualizations can add extra emphasis to business
reports and persuasive marketing material.

ISSUES REGARDING SECURITY OF DATA LOSS

a) Hard drive failure is the most common cause of data loss” and accounts for 38 percent
of these scenarios. This loss can be detrimental to your business. If you lose financial
reports, client information, or systems that are unique to your business, you can be down
for days. Once this information is lost, data reconstruction becomes a priority. The
rebuild takes employee time, and can delay business decisions, other projects and
network updates.

b) Hard Drive Formatting


Accidental formatting of your hard drive can cause you to lose data instantly. Employees can
format a hard drive by accident if they misunderstand system prompts or error messages.
Reformatting can also occur during system updates and result in data loss. While accidentally
reformatting a hard drive can lead to panic when files and documents can no longer be
accessed.
ISSUES REGARDING SECURITY OF DATA ACCESS

1)Hackers and Insiders


In recent years, hacking and data breaches have become a much more common problem,
making good cybersecurity measures essential. Unauthorized guests in your network can
cause serious damage to your data, deleting and stealing any data they wish. They can even
damage entire network processes if they have sufficient access to your system.
Hackers can gain access to your data in a variety of ways.
Here are some things you should avoid so that your system is not vulnerable to hackers:
a) Using servers with poor security
b) Not having adequate firewalls
c)Using passwords that are easy to guess

METHODS OF PREVENTING DATA LOSS FROM HARDWARES

a)Protect against power surges with an UPS. This prevents loss of data when power goes off
during entering data i.e. a transaction. If your data is important, an un-interrupt power supply
protects your computer and data during a power failure. The spare battery in the UPS gives you
ample time to save your documents and shut down Windows properly so that you will not lose
any files or damage any hardware components.

b)Keep your machine dry in a dry, shaded, dust-free and well ventilated area. Never leave your
computer near places where it is directly exposed to rain, sun or humidity. Such conditions have
the tendency to cause rusting and damage to your hardware parts.

2
c)Protect your hard disks and flash disks and other storage devices, where the company’s data
is stored, with unique password or PIN.

METHODS OF PREVENTING DATA LOSS FROM SOFTWARES

a) Have backups of your accounting data files, i.e. ledgers, cashbooks, on the cloud or
have multiple copies stored in external storage devices so incase if the computer is
attacked by virus or spoiled or the files have been manipulated by hackers the business
will still be able to access the financial record.

b) Have an up-to-date anti-virus software installed in the computer which will prevent
malicious damage to the files by viruses and will keep off the viruses from the computer.

c) Have firewalls put in place on the business network server which will enable access to
the network only for the business employees and will prevent access by unauthorized
personnel i.e. outsiders so the delicate company’s information is not known by the
outsiders including competitors.

d) Have logins and passwords to access the financial documents and reports so only
some members of staff can access the files as the passwords are given to only
authorized staff i.e. managers or HOD of accounting department.

END!

You might also like