Accounting Information System Risks & Threats

Written By: Saira Younis.

Recently, many improvements have occurred in accounting information systems (AIS), announcing the transition from paper-based journals and ledgers to a fully automated and paperless system. However, the transition from paper to computer has not been challenging. With the advent of technology has come a new security risk.

Many firms use accounting software to automate basic accounting operations, implement controls, and generate financial reports; regardless of whether a significant company or a single proprietorship, several accounting software programs on the market can generally meet most of a business’s demands. While accounting software may save time and help preserve data, it also has certain drawbacks.

Data or service loss

When a company depends on accounting software, any interruption caused by a power or computer failure might result in a work stoppage. Workplace interruptions may obstruct new data entry and impede access to previously stored data. A computer outage might also result in the loss of financial data if the information is not appropriately backed up.

Specialized requirements

Most sorts of businesses will benefit from an accounting program. On the other hand, specialist firms may need to modify the package or adjust their procedures to employ accounting software correctly.

Incorrect information

The information in an accounting system is only as good as the data entered into it. Financial results may be erroneous unless all input data is checked since most accounting systems involve some human data entry. Assume there is a bias to look at an accounting system’s final reports or output. It may be challenging to locate inaccurate information in such instances.


Configuration of the System

Every organization has unique characteristics that might make customizing a generic accounting software program to meet its demands challenging. While many applications allow customization, it might result in downtime and errors if done incorrectly. Also, if a company expands, it may be necessary to switch accounting software systems; this may create significant disruption since data must, move, and new employee training for employees is require.


If appropriate controls and security measures are not in place, information stored electronically may change. Specific procedures are required to guarantee that only authorized individuals use the accounting software and have access to reports. Accounting software increases the risk of fraud since financial data is sensitive and secret.




Manual accounting is often to set up and more versatile than automated accounting. This service is usually charged by your accountant or system supplier.


The expense of accounting software is one of its drawbacks. The package cost is more than a paper-based approach, although being little in comparison to your other costs.

There are other costs for maintenance, modification, training, computer hardware, and computer hardware and the original program purchase. While the time savings may justify the price, it may take years for some organizations to recoup their investment in accounting software.

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