2.2 Advantages and disadvantages of a manual and computerised accounting system.

Manual Accounting System

No Advantages Disadvantages

1 Comparatively cheap

workforce and resources,

reliability, independence

from machines

Difficult to be maintained

safe

2 Skilled workers availability Subject to greater human

error

3 The ledgers are easy to

review, and accountants can

make simple changes if

necessary

Business can see itself in

fines and penalties if records

are lost

4 Individual accounts are easily

reconciled because

information is in systematic

order through each ledger

Easier to be falsified,

modified, altered or vanish

5 Accountants also have the benefit of physically

handling each ledger and creating notes in customer

accounts regarding any issues that need clarification or

corrections

Reduced speed, increased

effort of accountants,

relatively slower internal

control reporting, routine

work

6

7

8

9

10

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Computerised Accounting System

No Advantages Disadvantages

1 Faster and efficient in

processing information

Power failure, computer

viruses and hackers are the

inherent problems

2 Automatic generation of

accounting documents like

invoices, cheques and

statement of account

Once data been input into the

system, automatically the

output are obtained, hence

the data being input needs to

be validated for accuracy and

completeness

3 More timely information can

be produce

Not properly set up to meet

the requirement of the

business due to badly

programmed or inappropriate

software or hardware or

personnel problems can

cause more havoc

4 Very safe when using

password, firewall, and back-

ups

Danger of computer fraud

will occur if proper level of

control and security whether

internal and external are not

properly been instituted

5 High speed and mobility of

reporting and reliability, no

Extremely high cost on

developing, introducing and

routine work, increased

accuracy

using the system

6 Accountants also can store

several years of financial

information with relative

ease, giving them the

opportunity to review

previous year's information

without sorting through

stacks of paper ledgers

Special trainings for

personnel, increased

personnel costs, dependence

on machines

7 Internal control system of

increased productivity

8 Easy back up and restoration

of records

9 Accountants process more

information quicker;

formulas verify calculated

totals and errors are less

common.

10 Accounting systems also are

customizable by industry,

allowing accountants the

opportunity to use preset

templates for their general

ledger.

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