Cloud Accounting: A Risk Mitigation Perspective

Abstract

Modern businesses are moving towards Cloud based applications due to the flexibility, cost effective and business sense. However, there has been a noted hesitation by firms to migrate towards Cloud Accounting. This research aims to explore the reasons behind this reluctance by identifying the major risks that are preventing firms from embracing Cloud Accounting and recommending measures to mitigate the risks. This study deploys a qualitative approach to explore and understand the specific problems and solutions by interviewing Cloud Accounting experts internationally. The findings of this research suggest that Cloud Accounting provides unique features like the global network access, scalability, automation, ERP integration and enhanced measures of security at a fraction of the cost in comparison to the traditional AIS. However, organizations hesitate to embrace the Cloud Accounting services because of the lack of awareness about the concept, threats to data security because of the distributed nature of Cloud infrastructure, short lived business lives of Cloud vendors, and the dependency relation customers fall into because of the lack of transparency. The research believes that these risks are caused by lack of governance, compliance and audit in enterprise risk management framework, which if brought in place will mitigate the identified risks. This study aims to motivate more users to embark onto the Cloud Accounting platformto enjoy the benefit of this business enhancing technology.

Keywords: Cloud Computing, Cloud Accounting, Enterprise Resource Planning (ERP), Accounting Information Systems (AIS), Enterprise Risk Management Framework