Technology for Improving Business Operations (Business Reporting and Accounting) at Disk4U

Discuss about the Improving Business Processes for Information Systems.

Perceiving several trends in the industry, Disk4U must enhance its focus upon the standards of market for a model of business reporting, infrastructure of data connectivity, and format of data interchange. Disk4U conducts its operations in Sydney for the sale of Vinyl Records and CDs with four outlets spread across the metropolitan region of Sydney. In the current business, there is sale of these products to customers via phone and mail orders, and their physical shop front. In addition, there has been an introduction of a new online channel in collaboration with Ebay. The expansion has necessitated the improvement in manual processes of business reporting and accounting. Disk4U will be provided with key insights for the improvement of current operations of business reporting and accounting through technology.

In the current practices, there are constraints with the mixed utilization of electronic media and paper at Disc4U. There is an issue of incompatibility in software programs and formats, followed by the need of eliminating repetitive manual procedures such as data entry and report assembly (Luftman & Zadeh, 2011). In addition there is a need for physically dispersing the data across unconnected databases and systems. There is usually a significant amplification of this issue when a number of businesses put in efforts for sharing data.

One significant way to support the process of accounting standard setting and for facilitating the accessibility of these standards is by implementing the modern method of accounting reporting by the use of web technology (Chen et al., 2010a). However, as a small firm, Disk4U may experience risk due to two main factors that are revolutionizing stages in IT technology and implementing the accounting standards. Business reporting, as a crucial operation has undergone a significant transformation. The regulatory requirements and market demand for transparency and information of business within the process of reporting have significantly increased. The internet can be seen creating a ubiquitous infrastructure for the enhancement of interenterprise, intra-enterprise, local and global connectivity. There has been emergence of new standards for data interchange allowing the production of significant information in the format agreed and shared throughout the geographical and organizational boundaries.

The three trends identified have converged for changing the approach by which both, the consumers and the producers of business information consider using, analysing, sharing, disseminating and creating business data. There is creation and creation of business information at a number of points in Disk4U that more often there is no connection as such (Boritz & No, 2008). The reporting and management of business information should not be following the vocabulary agreed upon, and the overall dispersion restricts the ability of Disk4U for reusing and sharing information. Disk4U holds the requirement of analysing, preparing, consolidating, summarizing, and more often sharing the information outside and within their boundaries. There are certain factors to be enabled at Disk4U for the motivation of these activities.

Recommending Information System for Improvement of Business Functions

The need of managers must be fulfilled for drilling down with the stores of detail level information for answering questions in surfacing the review of summarized data. Disk4U needs to consider requirements for compliance of regulation in areas like oversight regarding the securities markets, regulatory background of deposit institutions, and taxation (Luftman & Zadeh, 2011). Further ahead, the company must be increase its expectations from the capital markets regarding the transparency maintained in accounting and business reporting. Finally, the company should be communicating with each and every stakeholder and business partner for supporting the activities of joint business. The scope of these activities cannot be achieved without the complete consideration of significant trend in technology like reusability, shareability and connectivity (Chen et al., 2010b). These have been allowing the content of business information for the consolidation and generation of considerably low cost.

The company can consider following the fundamentals of XBRL. It is a standard established for the purpose of eliminating the key constraints involved in incompatible vocabularies and formats, and for using current trends in technology. This is crucial for the enhancement of business reporting. It can be identified as a freely licensed framework and standard of data description specifically focused to structure and represent information in processing and extracting the software applications. This is set on the basis of extensible mark-up language while seeking advantage of the ability for creation of data under self- description (Boritz & No, 2008). This will be specifying the vocabularies and conventions of data formatting to mark- up and describe the data of business reporting. It will be enabling to process and structure the documents and fragments of business reporting, thus enabling the speedy publication, analysis, extraction, search, exchange, assembly and creation of business information. This data can be related to regulatory filings and financial statements (Masli et al., 2010). The attachment of descriptive name to business data are described in accordance with the agreed upon structure and vocabulary. Applications can consider extracting and processing the documents individual in accordance with a number of tags. This will be simplifying the process of standardization in using and sharing the data of business while analysing it for the increment of usefulness and value. This will be further simplifying the production, consumption and exchange of business information at Disc4U. There is once creation of business information in the format of XBRL, and hence, a number of users will be sharing and reutilizing the information (Boritz & No, 2008). As a significant example, an item of revenue data in the respective format will be residing upon the database or in obtaining from the web page. An application of spreadsheet and word processing can consider obtaining and using the data in the absence of any format conversions. There will be incorporation of revenue item in the spreadsheet across rows and the application of word processing will be placing the information of revenue as a press release. This will be enabling to automate the entire process of business reporting, partially as there is provision of common format and categorization of descriptive terms that are reusable and usable by each and every participant within the process (Sutton, 2010). There can be sharing of data across the entire business of Disc4U.

Information System for Business Reporting and Accounting

As XBRL is not related to any accounting standard, programming language, software operating system and hardware platform, it is helpful for effectively and efficiently exchanging, moving, and managing the internal information of business utilized for compliance and operation decision- making. The applications used may be proprietary, shareware, open source or public domain, or may be under the coverage of other policies of licensing in the determination of software manufacturers.

Based on the overall discussion, it can be stated that XBRL must be opted for the improvement of business reporting and accounting at Disc4U by the way of standardization. This will be further ahead changing the overall process of auditing at the organization. Both, the auditors and the company management will be provided with the increasingly efficient accessibility of company data and the facilitation of speedily analysing the specific data (Anandarajan et al., 2012). This will be further increasing the efficiency of auditor as they will be allowed for spending more time on investigating and analysing the work while comparing it with data shovelling at low value. With time, this will contribute in increasing the frequency at which accounting reports are made. With the increased frequency of accounting and reporting activity, there will be work of assurance across the processes of business with the generation of information (Belfo et al., 2015). As a result, reporting in the environment of XBRL will enable the measurement of any category of finance related covenant or other benchmark with objective determination. In the overall sense, this decision will be enabling functionality across Disc4U further resulting in improved controls, and increasingly informed decisions from the investing public and the management authorities.

Sungate Foods is a business of wild rice and rice production in Victoria and the business mills almost 80 tons on hourly basis during peak seasons. With a population of 100 staff members, the company has been enclosing its largest facility of milling with a vast area and major storage. Sungate has been making its purchases from 350 farms, while packaging, distributing and selling the stock internationally and domestically. However, due to the patchwork of data silos and ISS, there is a requirement of making a number of entries manually for all financial transactions and orders. This results in the creation of errors and wastage of time by 10 times. There is a need for setting up a new framework of information system for ensuring an improvement in the operations of Sungate with specific focus on business reporting and accounting.

The company of Sungate needs to focus on certain broad initiatives in the performance of accounting and business reporting. First, the company should consider the enhancement of utility under the scope of business reporting (Bulgurcu et al., 2010). Second, there is a need for making improvement to detect and prevent fraud. Third, there is a need for providing assurance about the objectivity and independence of independent auditor. Fourth, the company should be discouraging unwarranted litigation that result in inhibiting innovation and undermining the ability of profession for meeting the evolutionary needs of financial reporting (Chen et al., 2010a). Finally, there is a need for strengthening the disciplinary system of the auditing performance at the company.

An information system can be defined as a combination of interrelated subsystems working together for the collection, processing, storage, transformation and distribution of information to plan, make decisions and hence, control. The contribution of information systems at the organization will be improving the overall efficiency involved in dealing with the information. Hence, an Accounting Information System at Sungate can be considered as an apt decision. It is the one responsible for the generation of reliable information related to finance in order to make decision. The success of this system will have key dependence upon the users anticipated for the information and the category of decision expected to be made (Chen et al., 2010b). The overall design will also have key dependence upon the overall size of the business, volume for data of transaction, key attributes of the operation, business form and organizational structure. The below figure provides the general model to be followed for the accounting information system.

The key objective focuses on ensuring that there is validity in the entry of data, being absolutely free from materialistic errors. This will be involved in the initial operational stage for the collection of data, involving the promotion of efficiency and relevance (Jones, 2010). The system should ensure that only relevant data is captured and collected only one time. The sources of data may either end up being external sources or internal sources. After the collection of data, its storage will be enabled in the management of database, while processing the overall information. Key tasks pertained to processing of variations are crucial, and these are inclusive of procedures for summarizing, forecasting of sales, techniques of statistics, and algorithms in accounting. Further ahead, there will be a need of forwarding the information developed to the internal end users and external end users (Kimmel et al., 2010). The internal end users are the authorities of management across each and every level of the business. External end users are customers, suppliers, regulatory agencies, investors, stockholders and creditors. There is then sending of feedback for acknowledging the key aspects to be retained and to be improved.

Considering the current scenario of the organization, a combination of computer based transaction system and database system must be followed. Under the system of computer based transaction, the data of accounting are separated from the data of operation. Under this consideration, there is an increased level of compartmentalization for the performance of work, while there is a need for preserving the integrity withheld by the information system in accounting (Luftman & Zadeh, 2011). There is availability of a number of packages for this purposes, including modules for dealing with the accounting systems of business. Further ahead, the database system will contribute in the reduction of information redundancies and inefficiency.

Relatable database systems like Enterprise Resource Planning system will be departing from the method of accounting equation in the organization of data (Masli et al., 2010). The system will be helpful for capturing both, non- financial and financial data, while storing the information across the warehouse of data. This will be helpful in recognizing the overall business instead of only the events of accounting. Significant support will be provided for reducing the inefficiencies of operations, while eliminating the redundancy of data. These have been allowing the content of business information for the consolidation and generation of considerably low cost.

In addition, there is a crucial requirement of following a standard process of accounting. The initial steps focuses on the analysis of transactions, while acknowledging to separate the non- recordable and the recordable transactions as per the nature of finance (Sutton, 2010). The analysis of transaction must be done to assess how it impacts the equation of accounting. Source documents like checks, orders, and invoices can be considered useful within the stage.

The next step focuses on recording the impact of these transactions. There will be recording of transactions by the use of journal entries involving simplicity and complexity. These electronic journal will be providing a chronological record for each and every transaction of the organization.

The third step focuses on summarizing the impacts of transactions, in which there is posting of entries in the ledger, crucial for the preparation of trial balance (Taylor & Dzuranin, 2010). This involves the necessity of classifying and grouping each and every similar item, demanding the accomplishment of bookkeeping procedure to post each and every journal entry under adequate accounts.

Conclusion

The company of Sungate needs to focus on certain broad initiatives in the performance of accounting and business reporting. Considering the current scenario of the organization, a combination of computer based transaction system and database system must be followed. Key tasks pertained to processing of variations are crucial, and these are inclusive of procedures for summarizing, forecasting of sales, techniques of statistics, and algorithms in accounting (Trigo et al., 2014). Key tasks pertained to processing of variations are crucial, and these are inclusive of procedures for summarizing, forecasting of sales, techniques of statistics, and algorithms in accounting. The scope of these activities cannot be achieved without the complete consideration of significant trend in technology like reusability, shareability and connectivity. The contribution of information systems at the organization will be improving the overall efficiency involved in dealing with the information. The need of managers must be fulfilled for drilling down with the stores of detail level information for answering questions in surfacing the review of summarized data (Weygandt et al., 2010). This will be further increasing the efficiency of auditor as they will be allowed for spending more time on investigating and analysing the work while comparing it with data shovelling at low value. Business reporting, as a crucial operation has undergone a significant transformation. The regulatory requirements and market demand for transparency and information of business within the process of reporting have significantly increased.

References

Anandarajan, M., Anandarajan, A., & Srinivasan, C. A. (Eds.). (2012). Business intelligence techniques: a perspective from accounting and finance. Springer Science & Business Media.

Belfo, F., Trigo, A., & Estébanez, R. P. (2015). Impact of ICT Innovative Momentum on Real-Time  Accounting. Business Systems Research Journal,6(2), 1-17.

Boritz, J. E., & No, W. G. (2008). The SEC’s XBRL voluntary filing program on EDGAR: A case for quality assurance. Current Issues in Auditing, 2(2), A36-A50.

Bulgurcu, B., Cavusoglu, H., & Benbasat, I. (2010). Information security policy compliance: anempirical study of rationality-based beliefs and information security awareness. MIS    quarterly, 34(3), 523-548.

Chen, D. Q., Mocker, M., Preston, D. S., & Teubner, A. (2010a). Information systems strategy: reconceptualization, measurement, and implications. MIS quarterly, 34(2), 233-259.

Chen, C. Y., Yang, Y. F., Chen, C. W., Chen, L. T., & Chen, T. H. (2010b). Linking the balanced corecard (BSC) to business management performance: A preliminary concept of fit theory   for navigation science and management. International Journal of Physical Sciences, 5(8), 1296-1305

Jones, M. J. (2010, June). Accounting for the environment: Towards a theoretical perspective for environmental accounting and reporting. InAccounting Forum (Vol. 34, No. 2, pp. 123-138).        Elsevier.

Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2010). Financial accounting: tools for business  decision making. John Wiley & Sons.

Luftman, J., & Zadeh, H. S. (2011). Key information technology and management issues 2010–11: an international study. Journal of Information Technology, 26(3), 193-204.

Masli, A., Peters, G. F., Richardson, V. J., & Sanchez, J. M. (2010). Examining the potentialbenefits of internal control monitoring technology. The Accounting Review, 85(3), 1001-          1034.

Sutton, S. G. (2010). The fundamental role of technology in accounting: Researching  reality. Advances in Accounting Behavioral Research, 13, 1-11.

Taylor, E. Z., & Dzuranin, A. C. (2010). Interactive financial reporting: an introduction to eXtensible business reporting language (XBRL). Issues in Accounting Education, 25(1), 71-83.

Trigo, A., Belfo, F., & Estébanez, R. P. (2014). Accounting information systems: The challenge of the real-time reporting. Procedia Technology, 16, 118-127.

Weygandt, J. J., Kimmel, P. D., KIESO, D., & Elias, R. Z. (2010). Accounting principles. Issues in  Accounting Education, 25(1), 179-180.