Introduction To Accounting Information System
Accounting information system is one of the main factors on which the success of any organization depends. Accounting Information System can be defined as collecting, processing and storing accounting and financial data that is used by the decision makers in making decisions. It is a computer based system used for tracking activities related to accounting, combining resources based on information technology (Waarts and Everdingen, 2005).
Collecting, recording and maintaining proper accounting information through traditional methods has become very tedious task for the accounts as they find it very difficult to store the data properly. Further, it becomes very tedious job for them when they have to retrieve any information from the collected data.
Wonga.com is a kind of financial institute which provides short term loans to those customers who due to some reasons are not able to sanction loans from the commercial banks. The company works of the principle of “No hidden charges or nasty surprise”. But in recent past, many of its customers had their share of “nasty surprises”. This was because they were chased by the firm for repaying the money they did not borrowed from the company.
Third Party Accounting System
Third party accounting system can be defined as application software that are used to collect, record and process the transactions related to accounts and consists of different financial modules such as account payable, payroll, account receivable, trial balance, etc. Third party accounting system is bit similar to accounting information system and can be developed within the organization or the company as in-house product or the company can purchase it from outside also, that is from the third party.
Advancement In Information And Technology
Security related to information and technology is very important for the company like Wonga.com and other businesses which are operating on internet or online. It is very essential for the companies to secure their vital information from the hackers who can steal this. Moreover, it is also important for the businesses to protect their system from the viruses otherwise the entire system can crash within seconds.
Here are few recommendations on which the Wonga.com can work upon so as to make it system more secure:
- The company must change the user name and the password which was used at the time of installation must be changed. Most of the companies install software or machine without reconfiguring it.
- Companies must update their operating system frequently. Most of the manufactures of the operating system keep on upgrading the security safeguard.
- Wonga.com must use some kind of encryption software so that it can safeguard the information related to financial transactions made by the customers.
Sarbanes-oxley Act Of 2002 And Other Related Laws
The Sarbanes-Oxley Act of 2002 also known as SOX and other law such as the Foreign Corrupt Practices Act of 1977 assign very important and legal responsibilities to the management of the company. It is the responsibility of the management and other higher order personnel to provide accurate, valid and reliable financial information to the external entities. Moreover, while preparing financial statements the company must follow the generally accepted accounting principle. It was drafted so as to stop the fraudulent practices done by the companies in preparing their financial statements. Further, it also panelizes the corporate for their wrongdoing.
- The company must change its default password which was used at the time of installing software so as to protect data.
- In order to provide more safeguard to its data base, it must keep on updating its operating system.
- To protect financial information that is required during a financial transaction, the company must use encryption software.
It should provide limited access to the vital information (Fedorowicz and Lee, 1998).
After working on the present report and studying the factors that result in the failure of Wonga.com, it can be concluded that although, accounting information system is considered to be boon for the organizations and customers, still there are chances with the hackers to hack the information and data of the company and the customers. So, in order to overcome from such problems, the companies must install more power anti-virus and system software so that unethical practices can be stopped.
- Al-eqab, M. & Ismail, N.A. (2011). Contingency factors and accounting information system design in Jordanian companies. IBIMA Business Review, 11(12).
- Ax, C., & Bjørnenak, T. (2005). Bundling and diffusion of management accounting innovations - the case of balanced scorecard in Sweden, Management Accounting Research. 16, 1-20.
- Bagshaw K. (2000). Financial reporting on the internet; Student accountant, ACCA students.