Accounting Information Systems
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Accounting Information Systems Simulation Summary
The primary advantage of having the same person performing multiple activities in a particular process is that it saves money. Another advantage is that it is more efficient for one person to manage a particular process. However, these advantages do not outweigh the disadvantages. By having the same person perform all the activities in a process the company opens itself to embezzlement, mistakes, and theft. By only having one person involved in a process there are no checks and balances to ensure that the information and cash amounts are accurate. Assigning people to the different activities in a process will lead to a larger personnel expense, but at the same time it will ensure the security and accuracy of the process.
Cost-benefit analysis is a decision support method used to help answer questions that often start with “what if” or “should we.” It is a mathematical method to measure the benefits of a course of action. It is a powerful tool that can be used to thoroughly analyze the likely net effect to a business of buying new equipment, expanding into a new service area, or outsourcing a task now handled internally. Feeling confident that the benefits derived from an action taken will outweigh the costs of implementing that action makes the decision to proceed much easier. However, a cost-benefit analysis should never be used to replace the actual records as they are necessary for accounting purposes. A cost-benefit analysis is only an estimation and should not be considered fact.
The prioritization of Ramos Internationals assets will initially lead to an increase in expenses over the next year. While this added expense will initially affect the companys net income and thus its bottom line, it will help protect their assets over the long term. Despite the necessary costs associated with prioritization of Ramoss assets their protection is essential. So while the companys loss over the next year in terms of net income will increase, the loss of essential assets will decrease. The protection of Ramos Internationals assets, processes, and accuracy of information is essential in the future growth of the company.